U.S. Dollar Trading (USD) risk aversion reentered the markets on Friday as news from Egypt showed the situation deteriorating on Friday sending stock markets tumbling in the US session. News over the weekend showed the crisis continuing and could weigh on markets Monday. Q4 GDP at 3.2% vs. 3.5% forecast. In US stocks, DJIA -166 points closing at 11823, S&P -23 points closing at 1276 and NASDAQ -68 points closing at 2686. Looking ahead, Q4 GDP forecast at 3.5% vs. 2.6% previously Q/Q.
The Euro (EUR) fell sharply on the Egyptian chaos which fueled heavy USD and CHF buying. Also weighing on the Euro Friday, more reports that German Officials are still reluctant to increase the EFSF. EUR/USD traded with a low of 1.3584 and a high of 1.3746 before closing at 1.3605. Looking ahead, German January Inflation Flash forecast at 2.3% vs. 2.2% previously.
The Japanese Yen (JPY) was strong across the board as the market reversed the losses on Thursday due to the S&P downgrade to pushing the major back to Y82. Crosses led the market lower with the risk sensitive AUD/JPY heavily affected. Overall the USDJPY traded with a low of 81.99 and a high of 82.93 before closing the day around 82.10 in the New York session. UPDATE January PMI Manufacturing jumps to 51.4 vs. 48.3 previously.
The Sterling (GBP) a brief rally in Europe was sold aggressively to fresh day lows as Wall St slumped on Egypt Concerns. EUR/GBP was still a source of support however with the market grinding lower. GBP/JPY fell to Y130 support and is pressuring the Key level. Overall the GBP/USD traded with a low of 1.5826 and a high of 1.5966 before closing the day at 1.5865 in the New York session.
The Australian Dollar (AUD) a 4% gain in Oil and Surging Gold market did not help the risk sensitive AUD which came under strong selling pressure due. Most AUD crosses are reacting to the risk off trading environment, continuing to unwind gains in the last month. Overall the AUD/USD traded with a low of 0.9885 and a high of 0.9985 before closing the US session at 0.9920.
Oil & Gold (XAU) safe haven demand from all corners of the market lifted gold $30 for it biggest gain in 6 months. Overall trading with a low of USD$1308 and high of USD $1347 before ending the New York session at USD$1336 an ounce. Middle East concerns where best expressed with Oil jumping over 4% back to $90 a barrel. WTI Oil Closed +$3.70 at $89.34 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3580
Initial support at 1.3573 (Jan 25 low) followed by 1.3541 (Jan 24 low). Initial resistance is now located at 1.3758 (Jan 27 high) followed by 1.3825 (Nov 10 high)
Yen - 82.20
Initial support is located at 81.89 (Jan 5 low) followed by 81.61 (Jan 4 low). Initial resistance is now at 83.22 (Jan 27 high) followed by 84.11 (Dec 20 high).
Pound - 1.5830
Initial support at 1.5702 (50 % retrace of 1.5345-1.6059) followed by 1.5618 (61.8% retrace of 1.5345-1.6059). Initial resistance is now at 1.6017 (Jan 25 high) followed by 1.6059 (Jan 18 High).
Australian Dollar - 0.9870
Initial support at 0.9864 (Jan 24 low) followed by the 0.9753 (Dec 8 low). Initial resistance is now at 1.0009 (Jan 20 High) followed by 1.0077 (Jan 19 high).
Gold - 1343
Initial support at 1300 (Round Number) followed by 1290 (Intraday). Initial resistance is now at 1353 (Jan 24 high) followed by 1371 (Jan 20 high).
Oil - 90.50
Initial support at 90.00 (Intraday Support) followed by 89.50 (Intraday Support). Initial resistance is now at 91.50 (Intraday Resistance) followed by 92.50 (Intraday Resistance).
Written by Anthony Darvall