U.S. Dollar Trading (USD) some very strong US data sent the Dollar broadly higher yesterday with stock markets also posting gains. December ADP Private Employment soared past expectations at 297k vs. 100k forecast. December Services PMI also soared to 57.1 vs. 55 previously. In US stocks, DJIA +31 points closing at 11722, S&P +6 points closing at 1276 and NASDAQ +20 points closing at 2702. Looking Ahead, Weekly Jobless Claims are forecast at 400k vs. 388k previously.
The Euro (EUR) was under pressure due to conditional support for Spanish bonds from China and comments from the Swiss National bank that they would no longer accept Irish debt as collateral. German Services PMI was strong at 59.2 vs. 58.3 previously. EUR/USD traded with a low of 1.3129 and a high of 1.3327 before closing at 1.3150. Looking ahead, November German Industrial Orders is forecast at 0.9% vs. 1.6% previously m/m.
The Japanese Yen (JPY) was the biggest beneficiary of the good US data soaring past Y83 and looking quite strong ahead of Friday's NFP data which could beat expectations given how strong the ADP report was. Crosses were also buoyant with CAD/JPY leading the pack higher. Overall the USDJPY traded with a low of 81.87 and a high of 83.40 before closing the day around 83.25 in the New York session.
The Sterling (GBP) with Construction PMI slipping to 49.1 vs. 51.8 previously and with a strong USD the major was under heavy pressure in the US session falling under 1.5500. EUR/GBP continue to move lower however and GBP/JPY extended its recovery off 12 month lows. Overall the GBP/USD traded with a low of 1.5449 and a high of 1.5631 before closing the day at 1.5499 in the New York session. Looking ahead, December PMI Services forecast at 53.
The Australian Dollar (AUD) fell below parity on heavy selling on further unwinding of long Aussie positions against the USD and CAD. Sentiment remains strong but recent price action is making buyer cautious with sharp falls in the past a reminder of the how volatile the commodity currency can be. Overall the AUD/USD traded with a low of 0.9958 and a high of 1.0078 before closing the US session at 0.9995.
Oil & Gold (XAU) tested downside support again before stabilizing just under opening levels. Overall trading with a low of USD$1363 and high of USD $1385 before ending the New York session at USD$1378 an ounce. Reclaimed $90 on strong US data as sentiment remains bullish. WTI Oil Closed +$1.20 at $90.50 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3150
Initial support at 1.3084 (Dec 29 low) followed by 1.3055 (Dec 23 low). Initial resistance is now located at 1.3325 (Jan 5 high) followed by 1.3433 (Jan 4 high)
Yen - 83.20
Initial support is located at 81.93 (Jan 5 low) followed by 81.61 (Jan 4 low). Initial resistance is now at 83.65 (76.4% retrace of 84..49-80.94) followed by 84.11 (Dec 20 high).
Pound - 1.5520
Initial support at 1.5425 (Dec 25 Low) followed by 1.5367 (Dec 30 low). Initial resistance is now at 1.5665 (Dec 31 high) followed by 1.5775 (Dec 15 high).
Australian Dollar - 1.0005
Initial support at 0.9951 (Dec 22 low) followed by the 0.9918 (Dec 21 low). Initial resistance is now at 1.0076 (Jan 5 high) followed by 1.0171 (Jan 4 high).
Gold - 1375
Initial support at 1364 (Jan 5 low) followed by 1361 (Dec 16 low). Initial resistance is now at 1417 (Jan 4 high) followed by 1431 (Dec 7 High).
Oil - 90.50
Initial support at 90.00 (Intraday Support) followed by 89.00 (Intraday Support). Initial resistance is now at 91.00 (Intraday Resistance) followed by 92.50 (Intraday Resistance).
Written by Anthony Darvall