Rate announcements head the week

Last week’s currency trading review
The Dollar traded in a choppy week as safe haven approach in a volatile market, whilst a mid week about face saw the dollar return to its pressured environment. Plenty of focus throughout the week was placed on Ben Bernanke Speech at Jackson Hole where he indicated the Federal Reserve was prepared to utilize all necessary tools to stabilize markets in light of recent credit turmoil’s. Yet he cautioned that speculators were held accountable for their financial decisions, and that the Fed was not obligated to provide relief, ensured a surge in the USD to end the week, as risk aversion ensured USD demand. The Euro began its week on the slide as ECB president Trichet, was non-committal to any rate hikes in September, admitting that recent hawkish comments viewed by markets on the 2nd of August were in fact prior to all the market turmoil, which the Central Bank will consider in there next rate meeting. The Euro closed last week at 1.3628 having opened at 1.3556. The Japanese consolidated throughout the week following a tumble on Wednesday, benefiting from safe haven flows where ongoing market uncertainty ensured the carry trade remained. The Yen closed last week at 115.86 having opened at 114.30. The GBP strengthened in the early part of the week but slid on reports the BoE had lent 1.6 billion pounds at the penalty rate of 6.75%. Risk aversion in late part of the week also attributed to further downward moves. The GBP closed last week at 2.0173 having opened at 2.0130. The AUD recovered early in the week on rebounding equity, before risk aversion ensured the high yielding currency fell to end the week. The Aud closed last week at 0.8244 having opened at 0.8186.

The forex trading week preview
In the States; key data released in the form ISM both manufacturing and services ahead of Friday’s Non-farm payrolls and unemployment rate. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; key data will be released throughout the week in the form of PMI manufacturing, PPI, Retail Sales, GDP ahead of Thursday PMI services and the much ECB interest rate announcement. In the UK; PMI manufacturing and services are out before Thursday’s interest rate announcement. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; no key economic data is scheduled for the week. We will provide our previews and reviews of these data releases in the daily summary.

In Australia; GDP (Tuesday) and RBA rate announcement on Wednesday. Unemployment rate out on Thursday. We will provide our previews and reviews of these data releases in the daily summary.

KEY WEEKLY PIVOTAL LEVELS

Euro 1.3635
Initial support at 1.3623 (Aug 31 low) followed by 1.3562 (38.2% retracement of the 1.3360 to 1.3687 advance). Initial resistance is now located at 1.3737 (76.4% retracement of the 1.3853 to 1.3360 decline) followed by 1.3842 (Aug 6 reaction high).

Yen 115.90
Initial support is located at 115.21 (Aug 30 low) followed by 113.85 (Aug 29 low). Initial resistance is now at 116.75 (Aug 27 high) followed by 117.15 (Aug 23 high and key near-term resistance).

Pound – 2.0175
Initial support at 2.0110 (Aug 31 low) followed by 2.0044 (Aug 30 low). Initial resistance is now at 2.0235 (Aug 31 high) followed by 2.0272 (61.8% retracement of the 2.0656 to 1.9652 decline)

Australian Dollar – 0.8185
Initial support a 0.8106 (Aug 31 low) followed by 0.8051 (Aug 29 low). Initial resistance is now at 0.8253 (Aug 31 high) followed by 0.8288 (Aug 28 high)

Gold – 673.50
Initial support at 661.70 (Aug 29 low) followed by 657.70 (Aug 24 low). Initial resistance is now at 674.75 (Aug 31 high) followed by 676.80 (Aug 8 high)