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U.S. Dollar Trading (USD) Friday non farm payrolls provided some volatility after the Unemployment rate dropped to 8.6% vs. 9.0% previously inspiring USD strength. US Stocks fell from highs on Friday however as profit taking from the week’s stellar rally overwhelmed the good jobs data. In US stocks, DJIA -1 points closing at 12019, S&P -1 points closing at 1244 and NASDAQ +1 points closing at 2626. Looking ahead, November ISM Services forecast at 53.5 vs. 52.9 previously. October Factory Orders forecast at -0.3% vs. 0.3% previously.

The Euro (EUR) the market is looking towards meetings this week between France and Germany as they push forward towards a new EU fiscal union that might provide a longer term solution to the Debt Crisis. Reports over the weekend that the ECB was preparing a EUR1 trillion cash infusion scheme helped the pair open stronger on Monday as did the announcement of Italian austerity measures. Looking ahead, October Retail Sales forecast at 0.1% vs. -0.7% previously.

The Japanese Yen (JPY) USD/JPY reacted positively to the jobs data grinding higher above Y78 as the topside comes into rare focus. Yen crosses are more mixed with the pull back in stocks sending EUR/JPY and GBP/JPY lower from the recent highs seen.

The Sterling (GBP) GBP/USD struggled more than most falling back to below 1.5600 by the end of the close on concern the BOE may increase the asset purchase program at this week’s rate meeting and the USD strength post NFP on Friday. Looking ahead, November PMI services forecast at 50.5 vs. 51.3 previously.

The Australian Dollar (AUD) the Aussie fell back with US stocks on Friday post NFP but the market is still looking to buy the AUD/USD on dips as the recovery in global risk appetite continues. AUD/JPY is providing plenty of support as well with the market now testing Y80 resistance. The RBA meets tomorrow and is expected to cut rates.

Oil & Gold (XAU) Gold continued to range traded around the key $1750 level with the recent gains been consolidated. Oil moved higher again with the solid US data providing plenty of support as is the ongoing middle east tensions. A break of $102 could signal more substantial gains.

Pairs to watch

EUR/USD German/France meetings to bring support?

OIL/USD is the rally to continue towards $105?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3212

1.3259

1.3410

1.3607

1.3730

USD/JPY

77.01

77.49

78.05

78.29

78.42

GBP/USD

1.5459

1.5526

1.5605

1.5780

1.5883

AUD/USD

1.0000

1.0151

1.0245

1.0350

1.0447

XAU/USD

1728.00

1736

1750

1767

1816

OIL/USD

99.00

100.00

101.40

102.00

105.00

Euro – 1.3410

Initial support at 1.3259 (Nov 30 low) followed by 1.3212 (Nov 25 low). Initial resistance is now located at 1.3607 (38.2% retrace of 1.4247-1.3212) followed by 1.3730 (50% retrace of 1.4247-1.3212)

Yen – 78.05

Initial support is located at 77.49 (Dec 1 low) followed by 77.01 (Nov 24low). Initial resistance is now at 78.29 (Nov 29 high) followed by 78.42 (Nov 2 high).

Pound – 1.5605

Initial support at 1.5526 (Nov 30 low) followed by 1.5459 (Nov 28 low). Initial resistance is now at 1.5780 (Nov 30 high) followed by 1.5883 (61.8% retrace of 1.6167-1.5423).

Australian Dollar – 1.0245

Initial support at 1.0151 (Dec 1 high) followed by the 1.0000 (Round Number). Initial resistance is now at 1.0350 (Nov 14 high) followed by 1.0447 (Nov 3 high).

Gold – 1750

Initial support at 1736 (Nov 11 high) followed by 1728 (61.8% retrace of 1681.73-1802.93). Initial resistance is now at 1767 (Nov 17 high) followed by 1816 (Sep 21 high).

Oil – 101.40

Initial support at 99.00 (Intraday Support) followed by 100.00 (Intraday Support). Initial resistance is now at 102.00 (Intraday resistance) followed by 105.00 (Intraday Resistance).

Written by Anthony Darvall