U.S. Dollar Trading (USD) the market was trading in a 'risk on' mood during Asia given news that the US Bush tax cuts would be extended to all Americans and that the Irish budget would pass an important vote. Dollar selling reversed however as a major move higher in the 10 year Treasury yield sent the USD soaring. In US stocks, DJIA -3 points closing at 11359, S&P +1 points closing at 1223 and NASDAQ +3 points closing at 2598. Looking ahead, Weekly Oil Inventories are forecast at -1.3m vs. 1.1m previously.
The Euro (EUR) reacted to the Dollar strength and weakness hitting day highs in Europe before reversing sharply in the US session prompting some technical analysts call for another test of 1.3000 in coming days. German October Industrial Orders came in at 1.6% vs. -4% previously m/m. EUR/USD traded with a low of 1.3235 and a high of 1.3402 before closing at 1.3260. Looking ahead, October German Trade Balance is forecast at 15 vs. 15.6bn previously.
The Japanese Yen (JPY) has a very close relationship with US bond yields and Interest rate expectations moving sharply to the topside last night with yields rising. USD/JPY surged back above Y83 and most crosses remained buoyant. Overall the USDJPY traded with a low of 82.32 and a high of 83.68 before closing the day around 83.50 in the New York session.
The Sterling (GBP) found strong resistance above 1.5800 but the pull back was shallow with strong GBP/JPY flows supporting. The outlook for the Pound has been improving lately as market focuses on other currencies problems. Overall the GBP/USD traded with a low of 1.5702 and a high of 1.5825 before closing the day at 1.5760 in the New York session. Looking ahead, December CBI Orders forecast at -13 vs. -15.
The Australian Dollar (AUD) the market shrugged off a neutral RBA meeting where they held at 4.75% stating 'rates appropriate'. The strong tone was reversed in the US session however and the market pushed the commodity currency to week lows. Overall the AUD/USD traded with a low of 0.9821 and a high of 0.9968 before closing the US session at 0.9835.
Oil & Gold (XAU) Gold crashed off record highs to test $1400 before stabilizing. Overall trading with a low of USD$1396 and high of USD $1431 before ending the New York session at USD$1402 an ounce. Oil Tracked lower towards $88 after trading above $90 earlier. WTI Oil Closed -$0.98 at $88.40 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3265
Initial support at 1.3193 (Dec 3 low) followed by 1.3060 (Dec 2 low). Initial resistance is now located at 1.3442 (Dec 6 high) followed by 1.3500 (Psychological Round Number)
Yen - 83.60
Initial support is located at 82.32 (50% retrace of 80.22-84.41) followed by 81.66 (Nov 12 low). Initial resistance is now at 83.90 (Dec 3 high) followed by 85.40 (Sept 24 high).
Pound - 1.5755
Initial support at 1.5704 (Dec 7 Low) followed by 1.5656 (Dec 6 low). Initial resistance is now at 1.5838 (Nov 24 high) followed by 1.5965 (Nov 23 high).
Australian Dollar - 0.9845
Initial support at 0.9739 (Dec 3 low) followed by the 0.9625 (Dec 2 low). Initial resistance is now at 0.9939 (Dec 3 high) followed by 1.0000 (Psychological Resistance).
Gold - 1400
Initial support at 1384 (Dec 3 low) followed by 1362 (Nov 30 low). Initial resistance is now at 1431 (Dec 7 high) followed by 1438 (1329.70 plus 1315.45-1424.60).
Oil - 88.30
Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.00 (Intraday Resistance).
Written by Anthony Darvall