ECB and BoE hold in attempt to balance inflation and growth

CURRENCY TRADING SUMMARY

U.S. Dollar Trading (USD) was volatile versus a number of currencies thorough out all session on Thursday. US wholesale inventories data unexpectedly fell for the first time in more than a year in March, while wholesale sales posted a stronger-than-expected rise of 1.6 percent. Stocks rose in U.S. share markets the NASDAQ was 12.75 points (0.52%) whilst the Dow Jones 52.43 points (0.41%). Crude oil traded at another record high on Thursday for the fourth straight day, hitting US$124.61. Oil finished the day up by US$0.16 a barrel to US$123.69. US Trade Balance is scheduled for release today with markets expecting the trade deficit to narrow to -61 billion.                                       

The Euro (EURO) rebounded as the ECB kept rates on hold at 4.00% and signaled that policy makers were still committed to fighting inflation, although noting that “risks to growth prevail”. Overall the EURUSD traded with a low of 1.5284 and a high of 1.5442 before closing the day at 1.5401 in the New York session. 

The Japanese Yen (JPY) was range bound for much of the session, tracking other majors and equity markets. Overall the USDJPY traded with a low of 103.41 and a high of 104.93 before ending the session at 103.84 in New York. 

The Sterling (GBP) saw the Bank of England also keep rates unchanged at 5.00% as widely expected, in an attempt to balance upside inflation and slowing growth in light of credit turmoil. Overall the GBPUSD traded with a low of 1.9504 and a high of 1.9621 before closing the day at 1.9551 in the New York session. 

The Australian Dollar (AUD) was boosted by strong jobs data in Thursday, despite the Unemployment rate rising from 4.1% to 4.2%. With Employment change jumping to 25,400 new jobs (Forecast: 10,000), The AUD rallied in the Asian session as the Labour force remains healthy. Overall the AUDUSD traded with a low of 0.9350 and a high of 0.9441 before closing the day at 0.9425 in the New York session.

Gold (XAU) rebounded well on Thursday, as record oil prices pushed the appeal for gold as an inflation hedge. Overall XAU traded with a low of 864.00 and a high of 885.25
 
TECHNICAL COMMENTARY

Euro – 1.5405
Initial support at 1.5284 (May 8 low) followed by 1.5230 (50% retracement of the 1.4440 to 1.6019). Initial resistance is now located at 1.5442 (May 8 high) followed by 1.5540 (May 7 high).
 
Yen – 103.75
Initial support is located at 103.41 (May 8 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 104.96 (May 8 high) followed by 105.71 (May 2 low).
 
Pound – 1.9560
Initial support at 1.9503 (May 8 low) followed by 1.9410 (Feb 21 low). Initial resistance is now at 1.9621 (May 8 high) followed by 1.9736 (May 7 high).
 
Australian Dollar – 0.9435
Initial support a 0.9350 (May 8 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).
 
Gold – 883.00
Initial support at 863.80 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 885.80 (May 8 high) followed by 896.50 (Apr 25 high).