Daily Forex Outlook

Oil breaks $110 a barrel, Dollar Surges

Wed, Sep 3 2008, 03:59 GMT
by Easy Forex Team

Easy Forex


Oil breaks $110 a barrel, Dollar Surges

U.S. Dollar Trading (USD) made significant gains as Oil dropped below $110 a barrel, especially against the commodity Bloc currencies. US August ISM Manufacturing came in near expectations at 49.9 vs. 50 previously. Oil driven stock gains were unable to be maintained as banks came under pressure one again.  In the U.S. share markets, the NASDAQ was down 18 points (-0.77%) and the Dow Jones was down 26.50 points (-0.23%). Crude Oil closed down $-5.75 ending the New York session at $109.71 per barrel. Looking ahead, July Factory Orders are forecast to temper slightly to 1% from 1.7% in June.

The Euro (EUR) hit 7 month lows below 1.45 as Oil hit lows of $105 per barrel. July PPI fell slightly below forecasts at 1.1% vs. 1.3% expected but still significantly higher than long term averages. Overall the EUR/USD traded with a low of 1.4466 and a high of 1.4617 before closing the day at 1.4520 in the New York session.  Looking ahead, August PMI Services are expected at 48.2. Also released July Retail Sales forecast to be flat 0.0% m/m and -2.1% y/y. Eurozone Q2 GDP revised GDP expected to remain at -0.2% Q/Q vs. 0.7% Q1.

The Japanese Yen (JPY) after heavy gains on the crosses lead by AUD/JPY and GBY/JPY a broad based recovery on the back of buoyant stocks was lead by the USD/JPY. BOJ Governor Shirakawa spoke of downsides risks for growth but expected inflation to mediate. Overall the USDJPY traded with a low of 107.77 and a high of 109.19 before closing the day around 108.70 in the New York session.

The Sterling (GBP) came under continued downside pressure as an OECD report predicted a UK recession. New Multi ear lows were touched as commodities slump and EUR/GBP hit record highs around .8160. Overall the GDP/USD traded with a low of 1.7778 and a high of 1.8002 before closing the day at 1.7820 in the New York session. Looking ahead, August PMI services are expected to fall slightly to 47 from 47.4.

The Australian Dollar (AUD) enjoyed a brief bounce after a less dovish than expected statement accompanying the 25bps rate cut. The rate cut was the first in Australia for 7 years and came after numerous economic reports pointed to a sharp slowdown. Subsequent falls in commodities provided the catalyst for a significant sell off with the AUD falling over 2 cents before recovering. Overall the AUD/USD traded with a low of 0.8270 and a high of 0.8534 before closing the US session at 0.8380. Looking ahead, Q2 GDP is forecast at 0.4% down slightly from 0.6% in Q1.

Gold (XAU) fell heavily as Oil continued to slide breaking the Key $800 level before recovering as Oil retraced some losses. Overall trading with a low of USD$791.30 and high of USD$818.75 before ending the New York session at USD$818 an ounce.


TECHNICAL COMMENTARY

Euro – 1.4530             
Initial support at 1.4440 (Feb 7 low) followed by 1.4366 (Jan 22 low). Initial resistance is now located at 1.4617 (Sept 2 high) at followed by 1.4728 (Sept 1 high).

Yen – 108.60
Initial support is located at 107.63 (Aug 29 low) followed by 107.29 (Aug 1 low). Initial resistance is now at 109.18 (Sep 2 high) followed by 110.29 (Aug 25 high).

Pound – 1.7835
Initial support at 1.7754 (Apr 21 2006 low) followed by 1.7680 (Apr 18 2006). Initial resistance is now at 1.8015 (Sep 2 high) followed by 1.8211 (Sept 1 high).

Australian Dollar – 0.8370
Initial support at 0.8271 (Sept 2 low) followed by 0.8173 (Sep 10 2007 low). Initial resistance is now at 0.8535 (Sep 2 High) followed by 0.8586 (Sept 1 high).

Gold – 805
Initial support at 783.35 (Aug 19 low) followed by 773.5 (Aug 15 low). Initial resistance is now at 835.6 (Sep 1 high) followed by 844 (Aug 28 high).

Published on  Wed, Sep 3 2008, 03:59 GMT

Archive

Easy Forex  | P.O. Box 53742. Limassol 3317
http://www.easy-forex.com | info@easy-forex.com

Legal disclaimer and risk disclosure

Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products Risk Disclaimer: The risk disclaimer is meant to inform the user of the potential financial risks of engaging in foreign exchange trading. The transaction of such financial instruments known as forex, fx, currency, and dealt on a valued basis known as 'spot' or 'forward' 'Day Trading' and 'option', can contain a substantial degree of risk. Before deciding to undertake such transactions with Advanced currency markets Easy-Forex LTD (herewith expressed as Easy-Forex) and indeed any other firm offering similar services, a user should carefully evaluate whether his/her financial situation is appropriate. Trading foreign exchange may result in substantial loss of funds and/or complete loss of funds and therefore should only be undertaken with risk capital. The definition of risk capital is funds that are not necessary to the survival or well being of the user. Easy-Forex strongly recommends that a user considering trading foreign exchange products read through all the main topics contained in the Easy-Forex website so that he/she may obtain a clear and accurate understanding of the risks inherent to fx trading. Opinions and analysis on potential expected market movements contained within the Easy-Forex website are not to be considered necessarily precise or timely and due to the public nature of the internet, Easy-Forex cannot at any time guarantee the accuracy of such information. Trading on-line, no matter how convenient or efficient it may be, does not necessarily reduce the risks associated with foreign exchange trading, and Easy-Forex does not accept any responsibility towards any customer, member or third party, acting on such information contained on the web site as to the accuracy or delay of information such as quotations, news and charts derived from quotations.

Interested in forex trading? forex brokerage firms!


Forex Capital Markets, LLC (FXCM)
Contact the broker/FDM
Open a demo account
FOREX.com
Contact the broker/FDM
Open a demo account
ODL Securities Inc
Contact the broker/FDM
Open a demo account		NordMarkets.com
Contact the broker/FDM
Open a demo account		Alpari (US), LLC
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.