CURRENCY TRADING SUMMARY - 28th October (00:30GMT)

U.S. Dollar Trading (USD) was strong in general as US stocks remained on the back foot. Risk sentiment was also dented by a large fall in US consumer Confidence with October dropping to 47.7 vs. 53.4 previously. August Case-Shiller House prices rose 1.2% vs. 0.7% forecast. In US Stocks, DJIA +14 points closing at 9882, S&P -3 points closing at 1063 and NASDAQ -25 points closing at 2116. Looking ahead, September Durable Goods Orders forecast at 1% vs. -2.6% previously. Crude Oil Inventories released forecast at 1.4mln vs. 1.3mln previously.

The Euro (EUR) took the full force of USD and Yen strength falling below 1.4800 and breaking the key 1.4840 support level. EUR/JPY also fell heavily below 136 yen. September Private Loans forecast at -0.3% was at expectations. Overall the EUR/USD traded with a low of 1.4770 and a high of 1.4928 before closing at 1.4810. Looking ahead, German Import prices forecast at -0.6% vs. 1.3% previously.

The Japanese Yen (JPY) gained across the board on increasing risk aversion and a drop in US yields after a strong treasury auction overnight. USD/JPY slipped from the 92 figure and EUR/JPY and AUD/JPY were under pressure. Overall the USDJPY traded with a low of 91.61 and a high of 92.33 before closing the day around 92.25 in the New York session. Update September Retail Sales -1.4%, forecast at -1.6% vs. -1.8% y/y previously.

The Sterling (GBP) continued to find strength as traders ignored the rest of the market and supported the pound. EUR/GBP continued lower after October CBI Distributive Trades are forecast at 5 vs. 3 previously, came in strong at 8. Overall the GBP/USD traded with a low of 1.6286 and a high of 1.6440 before closing the day at 1.6380 in the New York session.

The Australian Dollar (AUD) struggled above 0.9200 as the Euro fell and AUD/JPY also came under pressure. A rise in Oil failed to offset and the pair tested 0.9120 support again. Attention is still focused on RBA next Tuesday and CPI today. Overall the AUD/USD traded with a low of 0.9122 and a high of 0.9219 before closing the US session at 0.9160. UPDATE Q3 CPI 1.0% vs. 0.8% forecast.

Oil & Gold (XAU) was weak again testing support in the low 1030's. Overall trading with a low of USD$1032 and high of USD$1043 before ending the New York session at USD$1038 an ounce. Gained as the market rebounded from two days of heavy selling. Crude Oil was up $0.87 ending the New York session at $79.55.

TECHNICAL COMMENTARY


Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4762

1.4770

1.4820

1.5083

1.5163

USD/JPY

90.49

91.28

91.70

92.53

93.30

GBP/USD

1.6120

1.6241

1.6380

1.6533

1.6693

AUD/USD

0.8985

0.9113

0.9170

0.9347

0.9476

XAU/USD

1000.00

1024

1040.00

1067.00

1070.00

OIL/USD

77.50

78.00

79.60

80.00

81.10


Euro - 1.4820
Initial support at 1.4770 (Oct 27 low) followed by 1.4762 (Oct 13 low). Initial resistance is now located at 1.5083 (Oct 21 high) followed by 1.5163 (76.4% retrace 1.6038 - 1.2330)

Yen - 91.70
Initial support is located at 91.18 (Oct 23 low) followed by 90.49 (Oct 21 low). Initial resistance is now at 92.53 (Sept 21 high) followed by 93.3 (Sept 7 high).

Pound - 1.6380
Initial support at 1.6241 (Oct 19 low) followed by 1.6120 (Oct 8 low). Initial resistance is now at 1.6533 (61.8% retrace 1.7043 - 1.5708) followed by 1.6693 (Oct 23 high).

Australian Dollar - 0.9170
Initial support at 0.9113 (Oct 19 low) followed by the 0.8985 (Oct 12 low). Initial resistance is now at 0.9347 (Aug 4 08 high) followed by 0.9476 (Jul 31 08 high).

Gold - 1040
Initial support at 1024 (Sep 17 low) followed by 1000 (Big Figure). Initial resistance is now at 1067 (Oct 20 high) followed by 1070 (Oct 14 high).

Oil - 79.70
Initial support at 78.00 (Intraday Support) followed by 77.50 (Intraday support). Initial resistance is now at 80.00 ( Major Level) followed by 82.00 (October High).