Daily Outlook - Euro Heavy as Crisis Remains

By @ibtimes on

U.S. Dollar Trading (USD) did very little throughout the day but was generally strong as the biggest pair the EUR/USD continues to pressure the downside. Stock markets globally are remaining near year highs but there is little intraday movement to create risk on or off. In US stocks, DJIA -13 points closing at 11478, S&P +3 points closing at 1247 and NASDAQ +6 points closing at 2648.

The Euro (EUR) started the week under pressure as news flow continued to be negative with Moody's placing 30 Spanish Banks on review for downgrade. Also concerning is analysts focusing on the French AAA rating and the possibility that it may be lost in 2011. EUR/USD traded with a low of 1.3093 and a high of 1.3185 before closing at 1.3130. Looking ahead, January Consumer Sentiment forecast at 5.7 vs. 5.5.

The Japanese Yen (JPY) was subdued with markets focused on North Korean Tensions in the Asian session which subsided throughout Europe. USD/JPY remained near to the Y84 level and crosses where flat with the exception of EUR/JPY which pushed back below Y110. Overall the USDJPY traded with a low of 83.61 and a high of 84.14 before closing the day around 83.90 in the New York session.

The Sterling (GBP) stayed within a 100 pip range with the market able to stage a small rebound in the European session before falling back again during New York trading. EUR/GBP is attempting to take advantage of the Euro weakness and EUR/GBP did push to 0.8450 but progress is slow going. Overall the GBP/USD traded with a low of 1.5474 and a high of 1.5580 before closing the day at 1.5520 in the New York session.

The Australian Dollar (AUD) the Aussie outperformed all currencies with EUR/AUD and GBP/AUD pushing record lows and the high yielding commodity currency shrugging off the European worries. Overall the AUD/USD traded with a low of 0.9861 and a high of 0.9951 before closing the US session at 0.9920.

Oil & Gold (XAU) was supported on dips closing at opening levels. Overall trading with a low of USD$1375 and high of USD $1388 before ending the New York session at USD$1384 an ounce. Bounced of a dip in Asia to rally near resistance at $89.50. WTI Oil Closed +$0.79 at $89.40 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3061

1.3133

1.3180

1.3382

1.3499

USD/JPY

82.84

83.60

83.70

84.51

85.40

GBP/USD

1.5346

1.5455

1.5545

1.5775

1.5911

AUD/USD

0.9776

0.9833

0.9965

1.0031

1.0091

XAU/USD

1351.00

1361

1387

1397

1408

OIL/USD

87.00

88.00

89.40

89.50

90.00

Euro - 1.3180

Initial support at 1.3133 (Dec 17 low) followed by 1.3061 (Dec 2 low). Initial resistance is now located at 1.3382 (Dec 15 high) followed by 1.3499 (Dec 14 high)

Yen - 83.70

Initial support is located at 83.60 (Dec 15 high) followed by 82.84 (Dec 14 low). Initial resistance is now at 84.51 (Dec 15 high) followed by 85.40 (Sept 24 high).

Pound - 1.5545

Initial support at 1.5455 (Dec 17 Low) followed by 1.5346 (Sep 10 low). Initial resistance is now at 1.5775 (Dec 15 high) followed by 1.5911 (Dec 14 high).

Australian Dollar - 0.9965

Initial support at 0.9833 (Dec 13 low) followed by the 0.9776 (Dec 9 low). Initial resistance is now at 1.0031 (76.4% retrace of 1.0183-0.9537) followed by 1.0091 (Nov 11 high).

Gold - 1387

Initial support at 1361 (Dec 16 low) followed by 1351 (Nov 26 low). Initial resistance is now at 1386 (Dec 16 high) followed by 1408 (Dec 14 high).

Oil - 89.40

Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 89.50 (Intraday Resistance) followed by 90.00 (Intraday Resistance).

Written by Anthony Darvall

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