U.S. Dollar Trading (USD) the market consolidated Tuesday's risk rally holding near highs in stocks and the Dollar remaining weak. Some focus switched back to Egypt later in the day as protestors clashed and could spark risk aversion if the situation worsens. In US stocks, DJIA +1 points closing at 12042, S&P -2 points closing at 1304 and NASDAQ -1 points closing at 2749. Looking ahead, Weekly Jobless Claims are forecast at 420k vs. 454k previously.
The Euro (EUR) a dip below 1.3800 found support and the major closed back above the figure. EUR/GBP selling weighed as the Pound outperformed and most traders are now turning their attention to the ECB meeting and President Trichet's Press Conference. EUR/USD traded with a low of 1.3766 and a high of 1.3863 before closing at 1.3810. Looking ahead, ECB Rate Announcement forecast at 1.0%.
The Japanese Yen (JPY) was able to bounce back slightly from Y81.40 to highs in the US session on stronger US ADP Private Jobs report. The market is still bearish on the Major but most crosses are well supported and this is creating a very stable USD/JPY. Overall the USDJPY traded with a low of 81.35 and a high of 81.88 before closing the day around 81.55 in the New York session.
The Sterling (GBP) was the strongest currency in the market as traders reacted to a very solid January Construction PMI at 53.7 vs. 49.8 previously. GBP/JPY moved above Y132 and EUR/GBP fell back towards 0.8500. Overall the GBP/USD traded with a low of 1.6126 and a high of 1.6234 before closing the day at 1.6195 in the New York session.
The Australian Dollar (AUD) had a bout of profit taking but still ended the day on the front foot with traders still taking a shine to the commodity currency. Cyclone Yasi hit the northern part of Queensland but fortunately missed the major cities and damage was limited. Overall the AUD/USD traded with a low of 1.0054 and a high of 1.0136 before closing the US session at 1.0105. UPDATE December Trade Balance at 1.9bn vs. 1.6bn forecast.
Oil & Gold (XAU) struggled to make any gains and fell back towards the bottom end of its recent range finding support under $1330 . Overall trading with a low of USD$1326 and high of USD $1343 before ending the New York session at USD$1333 an ounce. Was well supported as the Egypt violence flared up causing supply concerns. WTI Oil Closed +$0.25 at $90.90 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3810
Initial support at 1.3690 (Feb 1 low) followed by 1.3571 (Jan 31 low). Initial resistance is now located at 1.3948 (76.4% retrace of 1.4282-1.2867) followed by 1.4000 (Big Figure Resistance)
Yen - 81.60
Initial support is located at 80.93 (Jan 3 low) followed by 80.54 (Nov 9 low). Initial resistance is now at 82.15 (Feb 1 high) followed by 83.22 (Jan 27 high).
Pound - 1.6190
Initial support at 1.6059 (Jan 18 high) followed by 1.6010 (Feb 1 low). Initial resistance is now at 1.6253 (76.4% retrace of 1.6878-1.4231) followed by 1.6299 (Nov 4 High).
Australian Dollar - 1.0115
Initial support at 0.9964 (Feb 1 low) followed by the 0.9867 (Jan 31 low). Initial resistance is now at 1.0149 (76.4% retrace of 1.0256-0.9804) followed by 1.0171 (Jan 4 high).
Gold - 1334
Initial support at 1323 (Jan 31 low) followed by 1308 (Sep 28 low). Initial resistance is now at 1353 (Jan 24 high) followed by 1371 (Jan 20 high).
Oil - 91.20
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