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Ireland Downgrade Rocks Euro

Wed, Jun 10 2009, 01:43 GMT
by Easy Forex Team

Easy Forex

Ireland Downgrade Rocks Euro

U.S. Dollar Trading (USD) continued where it left off on Friday and gained heavily against most currencies. Stocks were mixed, as were metals with Oil bouncy but copper struggling under heaving profit taking. Markets were quieter than usual with Australia away during the Asian session. Crude Oil finished down -$0.38 at $68.05.  In US share markets, the Nasdaq was down 1 points or 0.03% and the Dow Jones was up 12 points or 0.15%. Looking ahead, Treasury Sec Geithner Speaks.

The Euro (EUR) sank to fresh week lows after Ireland was downgraded and Latvia was put on negative watch due to a currency devaluation risk. The bounce off lows was limited as the EUR/GBP came under pressure. German Industrial Orders were flat in April. Overall the EUR/USD traded with a low of 1.4004 and a high of 1.3804 before closing at 1.3910. Looking ahead, German April Industrial Output is forecast at 0.1% vs. 0.0% previously.

The Japanese Yen (JPY) came under fairly heavy profit taking in the Asian morning before more USD buying emerge in Europe and help to keep EUR/JPY in a tight range. Crosses were mostly negative as their respective majors fell but most are still seeing the move lower as corrective. Overall the USDJPY traded with a low of 98.19 and a high of 98.88 before closing the day around 98.50 in the New York session.

The Sterling (GBP) continued to be sold as another day of political uncertainty began in the UK. Support at 1.5800 held firm and support from EUR/GBP selling helped cable get back above 1.6000. Supporting the rebound was improvement in banking stocks and talks of Barclays selling its Investment Unit to Blackrock. Overall the GBP/USD traded with a low of 1.5800 and a high of 1.6107 before closing the day at 1.6050 in the New York session. UPDATE BRC Retail Sales at -0.8% vs. 4.6% previously.

The Australian Dollar (AUD) fell through support on USD strength and mild risk aversion before finding a base and grinding higher for the rest of the day. Rebound in US stocks and Oil from intraday lows helped support. AUD/JPY found support at 77 Yen. Overall the AUD/USD traded with a low of 0.7826 and a high of 0.7989 before closing the US session at 0.7910.

Gold (XAU) slipped further on USD strength and the continued pro risk environment. Overall trading with a low of USD$942 and high of USD$960 before ending the New York session at USD$953 an ounce.

TECHNICAL COMMENTARY

Euro – 1.3910

Initial support at 1.3793 (May 28 low) followed by 1.3728 (May 21 low). Initial resistance is now located at 1.4364 (Dec 29 high) followed by 1.4621 (61.8% retrace 1.6038-1.2330)

Yen – 98.35

Initial support is located at 96.52 (Jun 5 low) followed by 95.33 (Jun 2 low). Initial resistance is now at 99.74 (May 7 high) followed by 100.73 (April 13 high).

Pound – 1.6050

Initial support at 1.5757 (May 22 low) followed by 1.5450 (May 20 low). Initial resistance is now at 1.6242 (Jun 5 high) followed by 1.6435 (Jun 4 high).

Australian Dollar – 0.7910

Initial support at 0.7745 (May 28 low) followed by the 0.7703 (May 26 low). Initial resistance is now at 0.8123 (Jun 5 high) followed by 0.8263 (Jun 3 high).

Gold – 953

Initial support at 941 (May 26 low) followed by 936 (May 21 low). Initial resistance is now at 990 (Jun 3 high) followed by 1006 (Feb 20 high).

Published on  Wed, Jun 10 2009, 01:55 GMT