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Daily Outlook - 4th May 2012

Written by Zoe Fiddes

CURRENCY TRADING SUMMARY 04/05/2012

Sterling / U.S Dollar (GBP / USD):

GBP/USD is trading in a relatively tight range from 1.6160 to 1.6210 as the market awaits the NFP result this afternoon. For this morning technical indicators have a preference to sell from the pivot point 1.6215 and the initial support lies at 1.6155. The NFP is expected to show that 165,000 jobs have been added to the US work force. Last month the figure disappointed and this spurred a trend of USD weakness, history could repeat itself if the result is less than the forecast. Whilst a strong figure may help the US dollar strengthen. GBP/USD is usually very volatile around this announcement.

Euro / U.S Dollar (EUR / USD):

EUR/USD was under further pressure this morning as Euro zone composite and services PMI came out worse than expected and with negative outlooks at 46.7 and 46.9 respectively. The pair dropped from 1.3150 down to 1.3125. The market now anticipates the all important NFP figure at 13:30 BST this afternoon. The pivot point is 1.3175 and there is a preference to follow the trend and sell from here. The initial support lies at 1.3120/1.3100. In the bigger picture, the day candle chart reveals a strong support at 1.3000 (Feb 16th, March 15th and April 16th 2012).

U.S. Dollar / Japanese Yen (USD / JPY):

USD/JPY was lifted to the initial resistance at 80.50 yesterday before trades piled in at the high to sell and the price came back to the 80.00/15 support. Overnight the pair traded flat whilst Japan is on holiday and the market awaits the NFP result. Technical indicators are showing a preference to buy from 79.95 however the pair is likely to react to the fundamental data out of the US later today.

Australian Dollar / U.S. Dollar (AUD / USD):

AUD/USD has come lower for another day and is currently challenging the 1.0235/30 support. Yesterdays challenge on this level saw the price back to 1.0280 however with the news that Australia’s central bank has cut its growth estimate by half a percentage point to 3 percent for 2012, citing weak labor and housing markets. Looking at the bigger picture on a day-candle chart it is evident that the 1.0225/35 zone is significant with previous tests on April 10th and April 24th, both failed to break lower.

Gold (XAU):

XAU/USD took some hits on the back of comments from the ECB regarding the European debt issue, hitting a US session low of 1631.  It opened in Asia at 1635 and was typically range bound 1634/37 before breaking support late in the session to finally close at 1628, all eyes will be firmly fixed on the jobs report due from the US today.

Oil:

OIL/USD dropped heavily during the ECB press conference and has continued to drop.  It started the overnight trading session at 105.00 and suffered major m losses on the back of reports stating OPEC could be planning to increase output.  Technical analysis is pointing to a lower day for oil with a pivot of 102.45 and support at 101.20 and 101.00.

Technical Commentary:

  Sup 2 Sup 1 Last Res 1 Res 2
GBP/USD  1.6130  1.6155  1.6168  1.6215  1.6240
EUR/USD  1.3100  1.3120  1.3130  1.3175  1.3205
USD/JPY  79.60  79.95  80.20  80.50  80.70
AUD/USD  1.0210  1.0235  1.0238  1.0290  1.0315
XAU/USD  1620.0  1623.0  1629.0  1637.0  1643.5
OIL/USD  100.38  101.00  101.09  102.45  103.40

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