Weaker USD pushes majors, XAU and Crude higher

CURRENCY TRADING SUMMARY – 11 SEPTEMBER 2007

U.S. Dollar Trading (USD) the dollar eased once again on Monday following further expectations that the Fed will cut rates next week. Reactions were felt through out the session following last Fridays poor payrolls data in which demand for the USD continued to diminish. In U.S. share markets the NASDAQ was down 6.59 points (-0.26%) whilst the Dow Jones was slightly up by 14.47 points (0.11%). Crude Oil was up by US$0.79 a barrel to US$77.49 on Monday.

The Euro (EUR) gained support on growing expectations that the ECB interest rates will rise before year end, pushing it toward a one month high against the USD. Overall the EURUSD traded with a range of a low 1.3767 and a high of 1.3816 before closing the day at 1.3806 in the New York session. Looking ahead, EZ industrial production for the month of July will be made public with forecasts at 0.3% and the 3.1% for the m/m and y/y respectively.

The Japanese Yen (JPY) held firm in a volatile market with prominent risk aversion taking its course. Overall the USDJPY traded with a low 112.60 and a high of 114.01 and closed the day at 113.56 in the New York session.

The Sterling (GBP) gained on growing expectations of a fed rate cut next week, despite tight liquidity conditions and poor PPI data in the UK. Overall the GBPUSD traded with a low of 2.0265 and a high of 2.0331 before closing the day at 2.0278 in the New York session. Looking ahead, Trade Balance for the month of July is expected to widen to -6.4 bln from -6.266 bln

The Australian Dollar (AUD) rebounded following an early Asian session sell off on delayed reactions from Fridays NFP and a strengthening Japanese Yen. Overall the AUDUSD traded with a low of 0.8174 and a high of 0.8269 before closing the day at 2.0278 in the New York session. Gold (XAU) continues on its bullish trend, reaching 4.5 month highs up by a further US$2.50 an ounce to US$712.20

TECHNICAL COMMENTARY

Euro 1.3785
Initial support at 1.3664 (Sep 10 low) followed by 1.3552 (Sep 4 low). Initial resistance is now located at 1.3816 (Sep 10 high) followed by 1.3842 (Aug 6 reaction high).

Yen 113.50
Initial support is located at 112.61 (Sep 10 low) followed by 111.61 (Aug 17 low). Initial resistance is now at 114.00 (Sep 10 high) followed by 115.66 (Sep 7 high).

Pound – 2.0265
Initial support at 2.0039 (Sep 5 low) followed by 2.0 (Psychological round number). Initial resistance is now at 2.0331 (Sep 10 high) followed by 2.0400 (Aug 8 reaction high)

Australian Dollar – 0.8245
Initial support a 0.8156 (Sep 3 low) followed by 0.8106 (Aug 31 low). Initial resistance is now at 0.8335 (Aug 27 high) followed by 0.8416 (61.8 % retracement of the 0.8873 to 0.7676).

Gold – 703.45
Initial support at 687.40 (Jul 24 low) followed by 681.14 (Sep 6 low). Initial resistance is now at 706.70 (Sep 7 high) followed by 720.10 (May 15 high)