USD:
The USD found itself losing a bit of value on Friday as the Non Farm Employment Change numbers were brought forth. Wall Street did climb on Friday on light volume as many investors had already disappeared for the long holiday weekend. Though the Non Farm Employment Change numbers were slightly better than expected the market was given a bit of contradictory data at the same time, as the Unemployment Rate showed that it had risen to 9.7%. The U.S. will not issue any data today because of the Labor Day holiday and releases will be moderately insignificant late into this week from the States. In essence, what we saw break out on Friday was a continuation of the debate around the type of economic recovery that can be expected from the States.
The important correlation seemingly continues to be the results from Wall Street compared to the affect this has on the USD. The U.S. stock markets have shown themselves to be rather inconsistent the past two weeks, though they have managed to hold onto most of the gains they nourished during the summer. Statements from the G-20 meetings in London this weekend have emphasized that Timothy Geithner and the U.S. administration are trying to sound optimistic, while noting that they remain cautious and that the outlook for the U.S. economy remains challenging. Investors now find themselves about to enter two of the most notorious calendar months of trading historically. September and October have proven over the years to be a battlefield for traders when serious questions about the economy are in the shadows. With the Labor Day holiday taking place today, trading will be led by outside influences and volume within the currency markets can be expected to be light.
EUR:
The EUR found itself trading in a firm manner on Friday on rather light data coming from Europe. The G-20 meetings took place this weekend and European Central Bank President Trichet stressed like his counterparts that while he sees improvement in the economic outlook for the EU, that policies from the ECB will remain cautious in order not to act too swiftly and presume the future. Today the German Factory Orders figures will be released and are expected to produce a rise of 2.0%. Also the broad Sentix Investor Confidence reading is on schedule and is estimated to be minus -13.5, which would be an improvement from the previous month. Due to the holidays in North America the EUR should find itself to be trading with lighter volume than normal, having said that participating traders could find volatility if there are imbalances among orders.
GBP:
The Sterling continued to trade in a rather consolidated pattern against the USD on Friday as no major U.K. economic data was forthcoming. The G-20 meetings in London this weekend gave the podium to Gordon Brown who spoke about the needs to control excessive bonuses in the financial sector, but it must be pointed out that this appears to be more of an opportunity to give a disgruntled public what they want to hear. Today the BRC Retail Sales Monitor will be released and last month�s result posted a gain of 1.8%. Also the RICS House Price figures will be published and a result of minus -0.1% is the estimate. Tomorrow the Manufacturing Production numbers are on schedule, along with the always tentative - Halifax HPI data. The Bank of England will be holding their MPC rate meeting this week too. The GBP had shown some signs of being under pressure early last week but regained its footing going into the weekend. Sterling may find itself trading in an interesting manner today with most of its volume coming from the U.K. and Europe.
JPY:
The JPY continued to hold onto its gains on Friday even as global stock markets, particularly from Asia, began to show signs of being more firm. However nervousness still appears to be part of the equation with investors in the Asian sphere and a sign of this is that Gold continues to power itself higher. The Shanghai market has produced better results the past two trading sessions, but investors still may have their doubts about the Chinese market, which showed signs of an excessive bull run in the past months. The JPY has gotten stronger the past couple of weeks but it may trade in a rather lackluster manner today due to the holiday in North America.
Another Low Volume Day, Tomorrow Trading Returns To Normal. We Hope!
SPX/USD:
Strength in the equity market was seen on the back of a weaker American Currency, and a low volume day. A 15 point push upwards brings us near resistance of 1018. However, Friday, and today�s trading should be taken with a grain of salt as we end the Labor Day Holiday weekend today. Tomorrow Volume will return to the market place and we I expect to see a continuation of the down move. Support 996.28, 991.97, 978.51, 1003.5, 1006, 1013.1 Resistance 1018, 1028.4, 1039.5
XAU/USD:
Everybody seems to love gold the last few days. We were not able to make new highs on Friday. Due to the trading holiday in the United States today, we can expect to see some interesting moves. I won�t be the least bit surprised if we push the $1000 mark. The last three trading days were almost straight up. Friday was the first breather that this market took. I would be looking to go long anywhere between $987 and $992. But this trade can reverse itself just as quickly so be cautious! Support, 989.95, 984.6, 971.75, 961.72 Resistance 997.35, 1000, 1006.5, 1032.8
GBP/USD:
The head and Shoulders pattern is not out of the equation just yet. For the moment keep an eye on the 5 minute chart as the day seems to be relatively strong, but I am expecting a downturn over the course of the day. Resistance 1.6442, 1.6433, 1.6623 Support 1.616, 1.6409, 1.6392, 1.6372, 1.6364, 1.6284, 1.6152, 1.6112
USD/CAD:
The Canadian dollar finally caught up with the large move we saw in gold. The US dollar was not able to maintain strength with the low volume we experienced on Friday. The USD/CAD pushed lower and we blew past a couple of support levels. Look for further weakness today. Until we test the bottom of the range. I expect we can push down to 1.07 today, and perhaps tomorrow we might see some strength. Support 1.8063, 1.0761, 1.0717, 1.0631 Resistance 1.0933, 1.1021, 1.1125