Forex - Oil prices plunge $5. Financial market turmoil has weighed on Dollar.
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Forex News and Events:
The Dollar surged against the Yen on Thursday and erased earlier losses versus the Euro as Oil prices plunged and investors worried that high energy costs and financial market turmoil were slowing global growth. US stocks also rallied as Oil fell for a third straight day. That helped the Dollar post its biggest daily gain against the yen in more than three months. As well, better-than-expected Q2 results from JPMorgan Chase & Co helped eased concern about the stability of the US financial sector that has weighed on the Dollar. The Euro, which set a record above 1.6000 on Tuesday, at one point fell below 1.5800 for the first time this week as investors began focusing on the headwinds facing the euro zone economy.
Oil has gained 35% this year alone, at one point hitting a record high 147.27. It fell more than $5 on Thursday to 129.29, its lowest level in six weeks. UsdJpy last traded at 106.24, up 1.08%, its best daily performance since early June. It touched a session high of 107.09 earlier in the session. EurUsd rose only 0.18% at 1.5853 after falling to a session low of 1.5783. UsdChf rose 0.23% to 1.0200. GbpUsd went 0.11% lower at 1.9974.
Analysts said the Dollar's gains remained tentative, particularly given the state of uncertainty surrounding US financial markets and the slumping housing market. The US currency wobbled on Thursday when Kuwait's finance minister said it had no plans to buy more Fannie or Freddie debt and was looking to invest in Japan, China and India instead.
European Central Bank governing council member Nout Wellink also provided a Euro boost when he said slower Euro-zone growth would not necessarily reduce high inflation. Record high euro zone consumer price inflation prompted the ECB to hike rates to 4.25% this month.
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Today's Key Issues (time in GMT):
08:05 GBP BoE’s Gieve speaks on the financial system, London
08:30 GBP June PSNB £7.4B vs £11B
08:30 GBP June PSNCR £12.6B vs £10.99B
09:00 EUR May Eurostat trade €-1B vs €2.3B
12:30 CAD June Lead indicators 0.1% vs 0.2%
12:30 CAD May Wholesale trade 0.5% vs 1.4%
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The Risk Today:
EurUsd Market hit 1.6039 high on Tuesday. This marks initial resistance over 1.6000 Pivot point resistance. A break there would open the way to key resistance 1.6200. On the downtrend, return below 1.5800 will undermine the recent uptrend. Any weakness may bring back 1.5400 – 1.5800 consolidation range. Below, strong support holds 1.5304 13th June low.
GbpUsd Cable is again in 1.9400 – 2.0000 trading range. It hit 2.0158 high on Tuesday. Key level holds again 2.0100. On the downside, only a return below 1.9649 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Initial support holds 1.9649 July 7th low. Strong support holds 1.9363 20th February and 14th May low.
UsdJpy Last 3-month up-trend has been ended as market broke down 105 level. Further profit taking would push the market into 100 – 104 consolidation trading range and toward 100 level. Yesterday, return over 105 would put mid-June 108.59 resistance and 110.10 strong resistance (Trendline) into focus ahead of 111.92 early January high.
UsdChf Market hit 1.0013 low on Tuesday. Further weakness below 1.0000 may open the way toward 0.9637 17th March low. Renewed strength over 1.0200 would reopen the 1.0200 – 1.0600 consolidation range. Initial resistance holds 1.0353 9th July high.
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Resistance and Support:
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EURUSD |
GBPUSD |
USDJPY |
USDCHF |
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1.6200 T |
2.1162 S |
111.92 K |
1.1191 K |
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1.6039 M |
2.0158 M |
110.10 T |
1.0625 T |
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1.6000 K |
2.0100 K |
105.66 M |
1.0353 S |
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1.5875 |
1.9985 |
106.05 |
1.0185 |
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1.5800 S |
2.0000 S |
103.92 M |
1.0013 M |
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1.5304 S |
1.9649 S |
102.73 S |
1.0000 P |
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1.5000 K |
1.9337 T |
100.00 P |
0.9637 K |
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S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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