U.S. Dollar Trading (US) Stocks finished up but well off highs in another volatile day of trading. The USD was weaker with the risk on trade losing ground against commodities and most majors. Weekly jobless claims fell to 391k vs. 423k previously. In US stocks, DJIA +143 points closing at 11154, S&P +9 points closing at 1160 and NASDAQ -10 points closing at 2480. Looking ahead, September Chicago PMI forecast at 55.5 vs. 56.5 previously.

The Euro (EUR) the Euro hit day highs after the passing of the ESFS vote from Germany by a large majority but the market sold after this event with uncertainty still remaining. Support was found though on the dip below 1.3600 at a higher low than Wednesday. September German Unemployment Change at -26k vs. -8k forecast. Looking ahead, August Retail Sales forecast at -0.5% vs. 0.0% previously.

The Japanese Yen (JPY) the USD/JPY tested Y77 briefly in the European session before reversing with stock markets and crosses. The market seems unlikely to break its recent range with 90% of the price action between Y76.50-Y77 over the last month. A catalyst for the break could be BOJ intervention or QE3 on the USD side.

The Sterling (GBP) tested above 1.5700 before reversing later in the day back to more familiar levels at 1.5600. The outlook is mixed with the chance of BOE expanding QE in the UK hurting whilst EUR/GBP selling is supporting.

The Australian Dollar (AUD) was under pressure in Early Asia testing 0.9700 before reversing aggressively for a large rally back above 0.9800 and topping out above 0.9870 with the height of the Euro strength. The US session saw more selling however with the market remaining volatile.

Oil & Gold (XAU) Gold crept above $1600 to $1630 before consolidating inside that range for the rest of the day. Improving sentiment in Asia and Europe helped lift Crude Oil from the $80 level to test above $83 in the US session.

Pairs to watch

EUR/USD Is the worst over?

XAU/USD The uptrend to resume?


TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3356

1.3479

1.3565

1.3718

1.3797

USD/JPY

75.00

75.95

76.55

77.00

77.28

GBP/USD

1.5433

1.5526

1.5605

1.5706

1.5870

AUD/USD

0.9537

0.9702

0.9785

0.9986

1.0194

XAU/USD

1532.00

1587

1636

1676

1704

OIL/USD

78.00



80.00

82.50

83.00

85.00



Euro - 1.3565

Initial support at 1.3479 (Sept 27 low) followed by 1.3356 (76.4% retrace of 1.2867-1.4940). Initial resistance is now located at 1.3718 (61.8% retrace of 1.3937-13363) followed by 1.3797 (Sept 21 high)



Yen - 76.55

Initial support is located at 75.95 (Aug 19 low) followed by 75.00 (Psych Support). Initial resistance is now at 77.00 (Sep 19 high) followed by 77.28 (Aug 13 high).

Pound - 1.5605

Initial support at 1.5526 (Sept 27 low) followed by 1.5433 (Sep 26 low). Initial resistance is now at 1.5706 (Sept 27 high) followed by 1.5870 (38.2% retrace of 1.6618-1.5328).



Australian Dollar - 0.9785

Initial support at 0.9702 (Sep 29 low) followed by the 0.9537 (Dec 1 low). Initial resistance is now at 0.9986 (Sep 27 high) followed by 1.0194 (50% retrace of 1.0765-0.9622).

Gold - 1636

Initial support at 1587 (61.8% retrace of 1532.72-1676.97) followed by 1532 (Sep 26 low). Initial resistance is now at 1676 (Sep 27 high) followed by 1704 (Aug 25 low).



Oil - 82.50

Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at  83.00 (Intraday resistance) followed by 85.00 (Intraday Resistance).





Written by Anthony Darvall