US GDP Disappointed but Dollar Strong ahead of Non farm

U.S. Dollar Trading (USD) was initially sold off after economic data disappointed but then strengthened during the US session to finish little changed ahead of today’s July Job announcement. US 2Q GDP came in at 1.9% while markets had been expecting a number in the region of 2.2-2.4%. Also soft, weekly Jobless claims at 448K vs. expectations of 395K the highest report in 4 years. A pull back in Oil and Gold help support the bounce off day lows. In the U.S. share markets, the NASDAQ was down 4 points (-0.18%) and the Dow Jones was down -205 points (-1.78%). Crude Oil closed down $2.69 ending the New York session at $124.08 per barrel. Looking ahead, Non Farm Payrolls seen at -75K after -62K in June. Also released the July Manufacturing ISM seen at 49.3.

The Euro (EUR) traded at day highs after the US GDP disappointed but was unable to maintain strength as reports out of the Eurozone suggest growth will also slow in Q2. European CPI ticked higher coming in at 4.1% in July from 4.0% in June. German Unemployment change can in at expectations at -20K.   Overall the EUR/USD traded with a low of 1.5570 and a high of 1.5700 before closing the day at 1.5593 in the New York session. Looking ahead, German retail sales are seen at -0.5%.  

The Japanese Yen (JPY) pivoted the 108 level against the USD. Buoyed by general greenback strength but weighed down as equities slumped. AUD/JPY and NZD/JPY have been under pressure as commodities continue to head lower. Overall the USDJPY traded with a low of 107.57 and a high of 108.38 before closing the day around 107.89 in the New York session.

The Sterling (GBP) tracked the Euro higher initially but reversed as Oil tracked lower and the USD strengthened. Poor Housing data from the Nationwide HPI m/m at -1.7% weighed. Overall the GBP/USD traded with a low of 1.9783 and a high of 1.9828 before closing the day at 1.9825 in the New York session.  Looking ahead, July PMI Manufacturing seen at 45.5 down form 45.8 in June.

The Australian Dollar (AUD) experienced more selling pressure after the June retails sales dropped -1.0% vs. expectations of a 0.2% gain. Supporting was the June Trade Balance coming in at a 400M surplus vs. a -253 Million deficit in May. The markets are focusing on the AUD after weak data prompted speculation of rate cutes. Overall the AUD/USD traded with a low 0.9404 and a high of 0.9476 before closing the US session at 0.9420.

Gold (XAU) continued with recent volatility spiking as the US data surprised to the downside before broad based USD strength pared gains. Overall trading with a low of USD$907.90 and high of USD$925.20 ending the New York session at USD$914 an ounce.

TECHNICAL COMMENTARY
 
 

Currency	Sup 2	Sup 1	Spot	Res 1	Res 2
EUR/USD	1.5521	1.5569	1.5570	1.5710	1.5758
USD/JPY	106.58	107.30	107.80	108.59	109.71
GBP/USD	1.9746	1.9782	1.9820	1.9929	1.9990
AUD/USD	0.9276	0.9328	0.9380	0.9476	0.9528
XAU/USD	894.25	908.05	911.00	925.25	935.30

Euro – 1.5570

Initial support at 1.5569 (Jul 31 low) followed by 1.5521 (July 30 low). Initial resistance is now located 1.5710 (76.4% retracement of the 1.5303 to 1.6038 advance) at followed by 1.5758 (July 29 High).

Yen – 107.80

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 – 1.9820

Initial support at 1.9782 (July 31 low) followed by 1.9746 (July 30 low). Initial resistance is now at 1.9929 (July 31 high) followed by 1.999 (July 24 high).

Australian Dollar – 0.9380

Initial support at 0.9328 (Jun 12 low) followed by 0.9276 (May 2 low ). Initial resistance is now at 0.9476 (July 31 high) followed by 0.9528 (July 30 low).

Gold – 911

Initial support at 908 ( July 31 low) followed by 894.5 (July 30 low). Initial resistance is now at 925.2 (July 31 high) followed by 935.30 (July 25 high).