Markets Calm Down
U.S. Dollar Trading (USD) lost some ground as stock markets rallied off lows and risk aversion fell back. December Home Sales Slumped to 5.45mln vs. 5.9mln forecast. The market sentiment improved with talk that Bernanke would be reconfirmed as Federal Reserve Chairman for another term. DJIA +23 points closing at 10196, S&P +5 points closing at 1096 and NASDAQ +5 points closing at 2210. Looking ahead, November Case Shiller House prices forecast at 0.1% vs. 0.0%. January Consumer Confidence forecast at 53.5 vs. 52.9 previously.
The Euro (EUR) had a quiet day testing higher before falling back to opening levels. EUR/JPY provided support in Asia but this was countered from heavy EUR/GBP later in the US session. A successful Greece Bond issue helped alleviate some concerns. Overall the EUR/USD traded with a low of 1.4128 and a high of 1.4196 before closing at 1.4150. Looking ahead, January IFO Business Climate is forecast at 95.1 vs. 94.7 previously.
The Japanese Yen (JPY) weakened as Asian stocks rallied off lows on Bernanke reconfirmation news but the rally stalled in Europe and most crosses pared back. GBP/JPY was the star performer up 2 Yen on the day. USD/JPY found support at under the Key 90 Yen level. Overall the USDJPY traded with a low of 89.80 and a high of 90.36 before closing the day around 90.25 in the New York session. Looking ahead, BoJ Rate Announcement.
The Sterling (GBP) rallied aggressively in the US session as shorts covered ahead of GDP data released Tuesday which is expected to show the end of the recession. Also helping cable was selling of the EUR/GBP back to the 0.8700 supports. Overall the GBP/USD traded with a low of 1.6088 and a high of 1.6264 before closing the day at 1.6240 in the New York session. Looking Ahead, Q4 GDP forecast at 0.4% vs. -0.2% previously Q/Q.
The Australian Dollar (AUD) enjoyed support in the low 0.9000 region to test 0.9090 resistance in Europe before easing later on poor US housing data. Q4 PPI fell -0.4% vs. 0.2% forecast as the high AUD made imports cheaper. AUD/JPY provided support in Asia as bargain hunters used the lower levels as a chance to build up long positions on the most popular Carry trade. Overall the AUD/USD traded with a low of 0.8995 and a high of 0.9096 before closing the US session at 0.9045.
Oil & Gold (XAU) tested $1100 but struggled to hold above the key Psychological level. Overall trading with a low of USD$1092 and high of USD$1104 before ending the New York session at USD$1099 an ounce. Rallied back above $75 as market sentiment improved. Crude Oil was up +$0.72 ending the New York session at $75.26.
Euro - 1.4150
Initial support at 1.4066 (Jan 22 low) followed by 1.4029 (Jan 21 low). Initial resistance is now located at 1.4218 (Dec 22 high) followed by 1.4414 (Jan 19 high)
Yen - 90.30
Initial support is located at 89.79 (Jan 22 low) followed by 89.30 (50% retracement of 84.86 - 93.75). Initial resistance is now at 90.56 (Jan 22 high) followed by 91.87 (Jan 14 high).
Pound - 1.6250
Initial support at 1.6078 (Jan 22 low) followed by 1.6038 (Jan 11 low). Initial resistance is now at 1.6312 (Jan 21 high) followed by 1.6372 (Jan 20 high).
Australian Dollar - 0.9040
Initial support at 0.8939 (Jan 21 low) followed by the 0.8902 (Dec 30 low). Initial resistance is now at 0.9146 (Jan 21 high) followed by 0.9243 (Jan 20 high).
Gold - 1099
Initial support at 1082 (Jan 22 low) followed by 1074 (Dec 22 low). Initial resistance is now at 1117 (Jan 20 high) followed by 1141 (Jan 20 high).
Oil - 75.30
Initial support at 75.00 (Intraday support) followed by 74.00 (Intraday Support). Initial resistance is now at 77.00 (Intraday Resistance) followed by 78.00 (Intraday Resistance).