ADP jobs surprise helps the Dollar fight Oil’s Rally

U.S. Dollar Trading (USD) had a positive day consolidating the gains made on Tuesday. A surprising Jump in the ADP employment report for July coming in +9K vs. expectations of -60K set the mood on Wall St. Also supporting the markets was the decision to extend the FED Primary Dealer Credit Facility until Jan 30. A fall in US crude inventories lead to a sharp rally in Oil and capped the USD gains. In the U.S. share markets, the NASDAQ was up 10 points (0.44%) and the Dow Jones was up 186 points (1.63%). Crude Oil closed up $4.58 ending the New York session at $122.19 per barrel. Looking ahead, weekly Jobless claims seen at 395K and Advanced Q2 GDP seen at 2.2% up from 1.0% in Q1.

The Euro (EUR) fell initially on the US data but rebounded to opening levels on a rally in Crude Oil . Eurozone Consumer Confidence came in weak as predicted at -20 dampening hopes of any more interest rate rises going into the future. Overall the EUR/USD traded with a low of 1.5522 and a high of 1.5617 before closing the day at 1.5580 in the New York session. Looking ahead, German Unemployment Change seen at -20K after -38K in June. Also released the July Inflation Report is forecasted to gain to 4.1% from 4.0% last month.  

The Japanese Yen (JPY) was sold as stocks gained and US data impressed but was little changed against most of the crosses as heavy falls in their respective majors capped any gains and the USD/JPY resistance at 108.30 held firm. July PMI Manufacturing gained slightly to 47 but is still well below the expansionary level above 50. Overall the USDJPY traded with a low of 107.70 and a high of 108.34 before closing the day around 108.10 in the New York session. Looking ahead, June Construction Orders.

The Sterling (GBP) kept to a trading range with US data preceeding the day’s lows before recovering inline with the rally in Crude Oil. July GFK Consumer Confidence fell to -39 it’s lowest ever recorded with concerns of stagflation mounting. Overall the GBP/USD traded with a low of 1.9745 and a high of 1.9844 before closing the day at 1.9810 in the New York session.

The Australian Dollar (AUD) fell in line with a plummeting Gold price and strengthening USD hitting month lows. Building Permits disappointed coming negative -0.7% vs. market expectations of +1.0%. Overall the AUD/USD traded with a low 0.9412 and a high of 0.9526 before closing the US session at 0.9435. Looking ahead, June Retails sales are seen at 0.2% down from 0.7% in May. Also released is the June Trade Balance seen as a surplus of 50 million up from a -965 Million deficit in May.

Gold (XAU) fell sharply to month lows breaking through supports at 910 and 900 before finally finding support and recovering on the back of the large gain in Oil.  Overall trading with a low of USD$894 and high of USD$918.80 ending the New York session at USD$908 an ounce.

TECHNICAL COMMENTARY
 

 
Euro – 1.5575

Initial support at 1.5493 (June 24 low) followed by 1.5476 (76.4% retracement of the 1.5303 to 1.6038 advance). Initial resistance is now located 1.5617 (July 30 high) at followed by 1.5758 (July 29 High).

Yen – 108.10

Initial support is located at 107.30 (July 29 low) followed by 106.58 (July 25 low). Initial resistance is now at 108.59 (Jun 16 high) followed by 109.71 (Jan 11 high).

Pound – 1.9790

Initial support at 1.9746 (July 30 low) followed by 1.9650 (July 7 low). Initial resistance is now at 1.9843 (July 24 high) followed by 1.999 (July 22 high).

Australian Dollar – 0.9435

Initial support at 0.9404 (Jun 18 low) followed by 0.9328 (Jun 12 reaction low). Initial resistance is now at 0.9528 (July 30 high) followed by 0.9590 (July 17 low).

Gold – 908

Initial support at 888.68 (76.4% retracement of the 858.00 to 988.00 advance) followed by 874.5 (Jun 25 low). Initial resistance is now at 919.6 (July 30 high) followed by 935.30 (July 25 high).