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Daily Outlook - 25th June 2012

Written by Zoe Fiddes

CURRENCY TRADING SUMMARY 25/06/2012

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

Sterling- dollar came under strong selling pressure for the second half of last week following the Feds announcement that there will be no QE3 in the near-term. It remains pointing south and there is a preference to following this trend and sell from the 1.5625/00 pivot point and highs this morning ran out of steam at 1.5590. The pair currently tests the initial support area at 1.5555/40 and break could open the path to 1.5515/00. The calendar is clear of economic announcements this morning but at 15:00 BST we have US new home sales which is expected to come out at a sturdy 345K. With little fundamental data the pair is more likely to follow technical moves.

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

Euro-dollar, after trading in the tight range 1.2520 – 1.2580 on Friday has fallen to trade in the high 1.24’s as selling pressure in the euro-yen pair pulls euro lower across the board. However, bids (to buy) are noted into 1.2480 with stops placed through 1.2475/70. The technical analysis intraday preference is to sell from the 1.2540 pivot and 1.2475 is also marked at the initial support. There is no EU news on the financial calendar however news flashes on Eurozone developments are still causing market moves. Streaming updates can be found in the easy-forex Market News (MNI) section.

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

Dollar-yen has slumped after its impressive rally observed last week; the pair made its way to 80.55 highs from 78.80. This is the highest the pair has traded since May 16th 2012. The 80.50 area proved to be a strong resistance and has seen the price off back down to 79.80. The pair gapped in the Sydney Monday open and continued to fall in the London open. Japanese yen strength has taken hold across the board, with sterling-yen falling from 125.40 to 124.20 and euro-yen from 101.15 to 99.70. Dollar has been weighed by a sharp yen supply and a break of the 200 hour MA in aussie-yen triggered stops to 79.82 and sit heavy ahead of the NY session. In USD/JPY the downtrend is expected to continue and there is a preference to sell from 80.20 with 79.65 as the initial support followed by 79.40. If trading dollar-yen it is a good idea to keep an eye on movements in the JPY crosses.

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

Aussie-dollar, like GBP/USD, came under heavy selling pressure following the Feds statement last week, the pair tumbled from 1.0200 down to 1.0010. Now the market are deciding if the price should be traded below parity again, for now sellers are not taking the lower price and the pair is floating from 1.0002 to 1.0020. If the pair pushes back higher today there is a preference to sell from 1.0075 (June 22nd high) whilst a break below 0.9990 may open up 0.9950.

Gold (XAU):

XAU/USD was typically range bound overnight opening at 1571 and after an initial dip to a session low of 1567, it managed to stage a small rally to a session high of 1576 but was unable to sustain the moves higher and finally closed the session at 1571.  News is fairly thin on the ground today so technicals will play a major part in any trading, later in the week we have the EU Economic Summit which will be closely watched for clues on which way the Eurozone crisis may be heading.  Technical analysis is pointing to a lower day for gold with a pivot of 1583 and supports at 1554 and 1543.

Oil:

OIL/USD experienced a lack of liquidity on the Asian open, starting the trading session at 80.10 and made moves lower later on in the session to achieve a session low of 79.11 and end the session at 79.28.  Oil has followed gold, to a certain extent, as the commodity sell of continued from last week.  Looking ahead, technical analysis has a preference to buy oil at a pivot of 78.75 with resistance at 80.35 and 81.00.

Technical Commentary:

  Sup 2 Sup 1 Last Res 1 Res 2
GBP/USD  1.5470  1.5515  1.5557  1.5625  1.5655
EUR/USD  1.2440  1.2475  1.2483  1.2540  1.2585
USD/JPY  79.40  79.85  79.86  80.20  80.60
AUD/USD  0.9950  0.9990  1.0008  1.0075  1.0100
XAU/USD  1543.0  1554.0  1568.8  1583.0  1590.0
OIL/USD  77.60  78.75  79.07  80.35  81.00

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