U.S. Dollar Trading (USD) solid economic data from the US sent stocks higher until the last few hours of the session which saw heavy selling from a Fitch warning on US banks. Although the warning was generic and well known the market used it as an excuse to sell US banking stocks. October Industrial Output at 0.7% vs. -0.1% previously. In US stocks, DJIA -190 points closing at 11905, S&P -20 points closing at 1236 and NASDAQ -46 points closing at 2639. Looking ahead, Weekly Jobless Claims forecast at 395k vs. 390k previously.
The Euro (EUR) bond jitters moved to France with their 10 yr debt jumping to their highest spread vs German Bonds since the EU came together. The Euro finished under 1.3500 and is looking heavy as action so far to stop the debt crisis have only helped slow the contagion. Targets to the downside include 1.3300 then 1.3000.
The Japanese Yen (JPY) USD/JPY was steady pivoting the Y77 level as the action was kept to the Yen crosses which moved with stocks. EUR/JPY found support at Y103.50 but the market is bearish and could test Y100 which may spark intervention from BOJ to weaken the Yen. BOJ Rate Announcement held at 0.1% as forecast.
The Sterling (GBP) GBP/USD fell to month lows on weak unemployment and bearish stock markets. Q3 Employment fell -197k vs. +25k in Q2. GBP/USD broke 1.5800 and headed to towards the 1.5700 level. EUR/GBP was stable but could break 0.8500 if the Euro crisis continues. Looking ahead, October Retail Sales -0.2% vs. 0.6% m/m.
The Australian Dollar (AUD) the Aussie hit day lows near the end of the Asian session before bouncing in Europe to test 1.0150. The selloff late in the day on the Fitch warning to US banks sent the Aussie back towards parity at 1.0000. The outlook is negative as the Eurozone debt crisis edges towards disaster.
Oil & Gold (XAU) Range Traded between $1760 and $1780 finishing near the bottom on USD strength. Oil was the big mover breaking above $100 a barrel and surging higher to $102.
Pairs to watch
EUR/USD French debt being sold as well?
OIL/USD above $100 where to now?
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3450
Initial support at 1.3346 (Oct 10 low) followed by 1.3242 (Oct 6 low). Initial resistance is now located at 1.3641 (Nov 15 high) followed by 1.3814 (Nov 14 high)
Yen - 77.05
Initial support is located at 76.34 (76.4% retrace of 75.35-79.53) followed by 75.35 (Oct 31 low). Initial resistance is now at 77.29 (Nov 14 high) followed by 77.68 (Nov 11 high).
Pound - 1.5710
Initial support at 1.5681 (Oct 20 low) followed by 1.5632 (Oct 18 low). Initial resistance is now at 1.5828 (Nov 16 high) followed by 1.5932 (Nov 15 high).
Australian Dollar - 1.0060
Initial support at 1.0052 (Nov 10 high) followed by the 1.0000 (Round Number). Initial resistance is now at 1.0227 (Nov 15 high) followed by 1.0350 (Nov 14 high).
Gold - 1765
Initial support at 1736 (Nov 11 high) followed by 1728 (61.8% retrace of 1681.73-1802.93). Initial resistance is now at 1802 (Nov 8 high) followed by 1816 (Sep 21 high).
Oil - 102.00
Initial support at 97.00 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 103.00 (Intraday resistance) followed by 105.00 (Intraday Resistance).
Written by Anthony Darvall