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Daily Forex Outlook

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Oil Falls Over 4% as Sellers Return

Wed, Jun 24 2009, 03:05 GMT
by Easy Forex Team

Easy Forex

Oil Falls Over 4% as Sellers Return

U.S. Dollar Trading (USD) in a major change of sentiment the market the downside resistance of multiple currencies over a 24 period. USD was the one of the main gainers losing only to the Yen at the end of the day. Risk aversion started to pick up during the Europeans session and very week commodities in the US dragged down stocks. Crude Oil closes down $2.62 to close the day at $66.93. In US share markets, the Nasdaq was down 61 points or 3.35% and the Dow Jones was down 200 points or -2.35%. Looking ahead, Existing Home Sales are forecast at 4.81Mln vs. 4.68Mln.

The Euro (EUR) had a very volatile session as EUR/GBP put the pair on the backfoot and then USD strength dragged the pair lower towards support at 1.3840. EUR/JPY was under pressure as the Yen gained. Overall the EUR/USD traded with a low of 1.3827 and a high of 1.3938 before closing at 1.3840. Looking ahead, Current account forecast at -4.7 vs. -6.5B previously.

The Japanese Yen (JPY) was the strongest currency in market as traders pared back riskier trades. USD/JPY remained well supported on USD strength although it also eased towards 95 Yen. The market will be waiting for the FOMC tomorrow for any changes in US interest rate forecasts. Overall the USDJPY traded with a low of 95.29 and a high of 96.30 before closing the day around 96.10 in the New York session. Looking ahead, Trade Balance forecast at 0.15T vs. -0.05T.

The Sterling (GBP) came under pressure after early strength on the back on Year highs against the Euro (0.8400). Risk aversion and heavy GBP selling hurt sentiment and Cable crumbled to 1.62 supports. Overall the GBP/USD traded with a low of 1.6207 and a high of 1.6510 before closing the day at 1.6400 in the New York session. UPDATE BBA Mortgage Approvals at 31.2K vs. 29.5K forecast.

The Australian Dollar (AUD) was the worst hit by risk aversion and the change in investor sentiment. Heavy AUD/JPY selling was constant nearly all day with Oil off 4% and gold down $10 an ounce and stocks over 2% off. The support at 0.7800 is under threat as is the current 0.7800 to 8250 range that has held for the past month. Overall the AUD/USD traded with a low of 0.7807 and a high of 0.8029 before closing the US session at 0.7840.

Gold (XAU) tracked Oil lower although found support in safe haven flows. Overall trading with a low of USD$911 and high of USD$935 before ending the New York session at USD$923 an ounce.

TECHNICAL COMMENTARY

Euro – 1.3930

Initial support at 1.3728 (May 21 low) followed by 1.3584 (May 20 low). Initial resistance is now located at 1.4033 (Jun 15 high) followed by 1.4178 (Jun 11 high)

Yen – 95.50

Initial support is located at 95.33 (Jun 5 low) followed by 96.52 (Jun 2 low). Initial resistance is now at 97.89 (May 7 high) followed by 98.89 (Jun 5 high).

Pound – 1.6310

Initial support at 1.6041 (Nov 6) followed by 1.5986 (Jun 9). Initial resistance is now at 1.6662 (Jun 3 high) followed by 1.6739 (61.8% retrace).

Australian Dollar – 0.7915

Initial support at 0.7828 (Jun 8 low) followed by the 0.7745 (May 28 low). Initial resistance is now at 0.8108 (Jun 15 high) followed by 0.8263 (Jun 3 high).

Gold – 922

Initial support at 925 (May 20 low) followed by 916 (May 18 low). Initial resistance is now at 965 (Jun 5 high) followed by 983 (June 3 high).

Published on  Wed, Jun 24 2009, 03:06 GMT