U.S. Dollar Trading (USD) the markets opened strong in Asia but the inevitable profit taking took place in the European session were we saw day highs for the USD. There was little news or economic data however and the Yields on Spanish and Italian bonds continued to fall so the dip in Europe was short lived and US stocks rallied extending the rally for another day. Fed Chief Bernanke spoke but failed to mention monetary policy. Looking ahead, Fed Chairman Bernanke Speaks again. June Consumer Credit is forecast at 11bn vs. 17bn previously.
The Euro (EUR) the EUR/USD hit day highs in early Asia and was not able retest these again on the day as profit takers dragged the pair back to 1.2350. The US session did see another rally and we finished well supported just under 1.2400. EUR/GBP is edging closer to 0.8000 and could test the big figure in coming sessions if the sentiment continues to improve. The Sterling (GBP) THE GBP/USD was under pressure for most of the day down from 1.5650 to 1.5550. Constant EUR/GBP buying weighed and could hamper further rallies for the major. UK Halifax House Prices fell -0.6% vs. -0.5% forecast m/m. Looking ahead, June Industrial Output forecast at -3.4 vs. 1% previously.
The Japanese Yen (JPY) the USD/JPY once against failed to hold onto hard fought gains from strong US Jobs and fell back to Y78.20 where it is more comfortable. The US monetary policy debate is the main cause of movement in the USD/JPY with most still see further FED action. Australian Dollar (AUD) the AUD/USD was strong continuing to press to fresh rally highs above 1.0580 and is looking to test 1.0600 and then 1.0650 if the stock market holds. The RBA meet today but this is not expected to be a major event with economists expecting the RBA to hold at 3.5%. The statement will be closely scrutinized though for clues as the timing and direction of the next move. Looking ahead, RBA Australian Interest Rate forecast to hold at 3.5%.
Oil & Gold (XAU) Gold pushed higher through its next resistance at $1611 before closing at the technical level. $1630 is the next major level and the top of many recent rallies in the last 3 months. OIL/USD is ramping up for a further leg higher well supported on a dip overnight to push onto fresh highs in the US session above $92 a barrel.
Pairs to watch
EUR/USD stalling or consolidating?
AUD/USD RBA to allow further Rally or throw cold water?