27 Jul 10 : Stocks Continue Rally, AUD Shines

•The Euro (EUR) traders were nervous ahead of the European open but investors there embraced the bank stress tests and pushed the Euro higher back above 1.3000 before settling just below the figure. Risk appetite and EUR/JPY flows will provide the next direction although many banks are reversing parity calls and instead focusing on the topside over the next 6 months. EUR/USD traded with a low of 1.2888 and a high of 1.3007 before closing at 1.2990.


•The Sterling (GBP) resistance was found above 1.5500 with the market stalling above the key figure. Further gains are likely but the Pound has failed to make straight-line gains in recent weeks so expect volatility. EUR/GBP has resumed its medium term downtrend with 0.8300 the first target. Overall the GBP/USD traded with a low of 1.5416 and a high of 1.5523 before closing the day at 1.5490 in the New York session.


•The Australian Dollar (AUD) broke above the key 0.9000 level riding the recent rally in US stocks. The market is once again turning bullish on the AUD and further targets include 0.9080 and 0.9150. AUD/JPY is stalling at the Y78 level but Y80 is the bull's target. Overall the AUD/USD traded with a low of 0.8940 and a high of 0.9038 before closing the US session at 0.9010.


•Subsiding Eurozone fears have led to a further pullback in Gold with the market settling into an 1175-1200 range waiting for a further catalyst. Overall trading with a low of USD$1200 and high of USD $1185 before ending the New York session at USD$1190 an ounce.
Currency to watch out for: EURUSD & GBPUSD

•The EURUSD pivot point is at 1.2955 with a preference to enter into Long positions at 1.2975
•The GBPUSD pivot point is at 1.5450 with a preference to enter Long positions 1.5450
Today's calendar and market movers:

•EUR Money Supply y/y expected to drop -0.1%
•US CB Consumer Confidence expected at 51.3
•US Richmond Manufacturing Index expected at 14•US S&P / CS Composite - 20 HPI y/y estimated at 3.9%•GBP CBI Realized Sales (index) expected to increase by 2 Equity Markets:

•US equities closed positive yesterday with the DJIA and the SP500 closing 0.97%% and 1.12% respectively. The European bourses were also positive with the FTSE closing 0.72% the DAX and the CAC closing up at 0.45% and 0.81%. The NIKKEI and the HSI at the time of writing is -0.07% and 0.12% respectively.