Daily Outlook - China RR hike, AUD Weak, EURO Strong

By @ibtimes on

U.S. Dollar Trading (USD) mixed US data and a Reserve Ratio Hike from China kept traders on their toes Friday. Stocks were strong although the USD found support after fresh week lows, bouncing back into the US close. December Retail Sales at 0.6% vs. 0.8% forecast. January Consumer Confidence fell to 72.7 vs. 74.5 previously. In US stocks, DJIA +55 points closing at 11787, S&P +9 points closing at 1291 and NASDAQ +20 points closing at 2755. Looking ahead, Bank Holiday for Martin Luther King Day.

The Euro (EUR) week highs above 1.3450 were seen in Europe but pared back in the US session due to profit taking. Sentiment is improving towards the single currency on the growing belief the ECB will do what is needed to support the Euro. EUR/USD traded with a low of 1.3315 and a high of 1.3456 before closing at 1.3368.

The Japanese Yen (JPY) USD weakness pushed the major lower but support was found at Y82.40 and the pair rebounded to the familiar Y83 level. AUD/JPY fell on the China news but the EUR/JPY remained strong. Overall the USDJPY traded with a low of 82.41 and a high of 83.07 before closing the day around 82.95 in the New York session.

The Sterling (GBP) was extremely contained tracking the Euro and remaining strong above 1.5800. EUR/GBP is above 0.8400 after finding solid support at 0.8300 last week. Overall the GBP/USD traded with a low of 1.5816 and a high of 1.5888 before closing the day at 1.5862 in the New York session.

The Australian Dollar (AUD) was the most affected by the Chinese bank reserve hike on Friday with the pair slipping sharply over a cent below 0.9900 and crosses continued to be unwound. EUR/AUD was the biggest mover last week up nearly 4% higher. Overall the AUD/USD traded with a low of 0.9857 and a high of 0.9993 before closing the US session at 0.9888.

Oil & Gold (XAU) Gold took another leg lower falling briefly below $1360. Overall trading with a low of USD$1355 and high of USD $1378 before ending the New York session at USD$1362 an ounce. Oil pulled back testing $90 a barrel before recovering and finishing strong. WTI Oil Closed +$0.40 at $91.54 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2962

1.3089

1.3355

1.3457

1.3499

USD/JPY

81.61

81.89

82.95

83.15

84.11

GBP/USD

1.5513

1.5719

1.5870

1.5911

1.5965

AUD/USD

0.9753

0.9804

0.9890

1.0000

1.0076

XAU/USD

1348.00

1352

1362

1396

1417

OIL/USD

89.00

90.00

91.50

92.50

95.00

Euro - 1.3355

Initial support at 1.3089 (Jan 13 low) followed by 1.2962 (Jan 12 low). Initial resistance is now located at 1.3457 (Jan 14 high) followed by 1.3499 (Dec 14 high)

Yen - 82.95

Initial support is located at 81.89 (Jan 5 low) followed by 81.61 (Jan 4 low). Initial resistance is now at 83.15 (Jan 13 high) followed by 84.11 (Dec 20 high).

Pound - 1.5870

Initial support at 1.5719 (Jan 13 Low) followed by 1.5513 (Dec 30 low). Initial resistance is now at 1.5911 (Dec 14 high) followed by 1.5965 (Dec 23 high).

Australian Dollar - 0.9890

Initial support at 0.9804 (Jan 12 low) followed by the 0.9753 (Dec 8 low). Initial resistance is now at 1.0000 (Big Figure) followed by 1.0076 (Jan 5 high).

Gold - 1362

Initial support at 1352 (Jan 7 low) followed by 1348 (Nov 22 low). Initial resistance is now at 1396 (61.8% retrace of 1352.70-1424.05) followed by 1417 (Jan 4 High).

Oil - 91.50

Initial support at 90.00 (Intraday Support) followed by 89.00 (Intraday Support). Initial resistance is now at 92.50 (Intraday Resistance) followed by 95.00 (Intraday Resistance).

Written by Anthony Darvall

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