â€¢ U.S. Dollar Trading (USD) was generally firmer against major currencies as the Abu Dhabi Investment Authority announced they will buy a stake in Citigroup for US$7.5billion. This prompted a rebound in equity markets and a resumption of the carry trade at the expense of the Japanese Yen and Swiss Franc in particular. In U.S. share markets the NASDAQ was up by 39 points (+1.5%) whilst the Dow Jones recovered by 215 points (+1.7%). Crude oil gave up more gains as a fall in demand is expected from a US economic slowdown. Crude oil fell by US$2.56 a barrel to US$95.14. Looking ahead, Durable good orders, existing home sales and the Beige book are all due for release today. Fedâ€™s Fisher is also due to speak on the economy.
â€¢ The Euro (EUR) was slightly weaker against the greenback despite a better than expected IFO reading. IFO index came in at 104.2 compared to a 103.3 estimate for the month of November. Overall the EURUSD traded with a low of 1.4810 and a high of 1.4908 before closing the day at 1.4845.
â€¢ The Japanese Yen (JPY) was hampered by news of the Abu Dhabi investment as the markets re-established carry trades selling the low yielding Yen and buying high yielding currencies. Overall the USDJPY traded with a low of 107.28 and a high of 108.88 before closing the day at 108.68. Looking ahead, retail sales data is due out today. UPDATE: Retail sales y/y 0.8% beating estimates of 0.5% for the month of October.
â€¢ The Sterling (GBP) was steady against the greenback as investors looked to policymakers and housing data later this week for clues on interest rate policy moves ahead of next weekâ€™s MPC meeting. Overall the GBPUSD traded with a low of 2.0643 and a high of 2.0757 before closing the session at 2.0698.
â€¢ The Australian Dollar (AUD) initially rallied on the news of investment in Citigroup before giving up gains in the overnight session. The AUDUSD traded with a low of 0.8681 and a high of 0.8813 before closing the day at 0.8757. Looking ahead, CAPEX is due out tomorrow.
â€¢ Gold (XAU) was weaker in light of a pullback in oil prices and a stronger US dollar. Gold fell by US$15.10 to US$811.40 an ounce.
â€¢ Euro â€“ 1.4830
Initial support at 1.4776 (Nov 21 low) followed by 1.4636 (Nov 20 low). Initial resistance is now located at 1.4968 (Nov 23 trend high) followed by 1.5 (Psychological resistance).
â€¢ Yen â€“ 108.9
Initial support is located at 107.23 (Nov 26 low) followed by 106.98 (76.4% retracement of the 101.67 to 124.17 advance). Initial resistance is now at 109.17 (Nov 22 high) followed by 109.98 (Nov 21 high)
â€¢ Pound â€“ 2.0670
Initial support at 2.0519 (Nov 23 low) followed by 2.0457 (Nov 20 low). Initial resistance is now at 2.0764 (Nov 23 high) followed by 2.0846 (Nov 14 high)
â€¢ Australian Dollar â€“ 0.8765
Initial support a 0.8654 (Nov 21 low) followed by 0.8606 (Sep 21 low). Initial resistance is now at 0.887 (Nov 26 high) followed by 0.8954 (Nov 21 high)
â€¢ Gold â€“ 813
Initial support at 803.00 (Nov 23 low) followed by 795.00 (Nov 23 low). Initial resistance is now at 829.4 (Nov 27 high) followed by 837.0 (November 26 high)