U.S. Dollar Trading (USD) a mixed day saw the USD gain after profit taking was seen on most majors. The big talking points were the failed vote for the EFSF by Slovakia late in the US session and the release of Alcoa Q3 results which disappointed. In US stocks, DJIA -16 points closing at 11416, S&P +1 points closing at 1195 and NASDAQ +16 points closing at 2583. Looking ahead, FOMC Meeting Minutes

The Euro (EUR) the EUR/USD fell back from 1.3670 to 1.3570 in gentle trade as the recent rally came under profit taking pressure. The negative EFSF news did not have much of an effect with most analysts seeing the Slovakia vote passing soon. ECB President Trichet spoke and noted that the EU crisis was becoming more systemic. Looking ahead, August Industrial Production forecast at -0.7% vs. 1% previously.

The Japanese Yen (JPY) USD/JPY went into an extremely tight range with only some slight strength on crosses noted for the yen overnight. New Japanese FM has stated he wants to bring up Yen strength at the next G20 meeting. Yen Crosses ability to rally from year lows will be key to the USD/JPY outlook.

The Sterling (GBP) underperformed with sentiment towards the Pound still weak after last week's shock increase in QE. The Cable was under constant pressure falling back to 1.5600 and EUR/GBP buying pushed the important cross to 0.8750. Looking ahead, September Claimant Count forecast at 25k vs. 20k previously. The Unemployment rate is expected to tick higher to 8.0% vs. 7.9% previously.

The Australian Dollar (AUD) the AUD/USD had interesting trade overnight with the pair testing 1.0000 three times but failing at each attempt at the critical level. The market finished on a weak footing and could now test support after finding such a strong resistance topside. The passing of a China Currency bill in the US could provoke a trade war with China though would be very negative for the AUD/USD.

Oil & Gold (XAU) topped out above $1680 and found some heavy profit taking in the US session down to $1660. Crude Oil continued to rally even as other market found profit taking and broke above $86.50 before reversing sharply into the US close.

Pairs to watch

AUD/USD Pullback after Rally?

EUR/USD will the Slovakia vote lead to fresh fears?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3242

1.3346

1.3605

1.3690

1.3797

USD/JPY

75.95

76.11

76.70

77.28

77.86

GBP/USD

1.5423

1.5525

1.5550

1.5716

1.5781

AUD/USD

0.9622

0.9728

0.9915

1.0080

1.0239

XAU/USD

1596.00

1620

1664

1704

1726

OIL/USD

82.00



83.50

84.80

85.00

86.50



Euro - 1.3605

Initial support at 1.3346 (Oct 10 low) followed by 1.3242 (Oct 6 low). Initial resistance is now located at 1.3690 (Sept 28 high) followed by 1.3797 (Sept 21 high)



Yen - 76.70

Initial support is located at 76.11 (Sep 22 low) followed by 75.95 (Aug 19 low). Initial resistance is now at 77.28 (Sep 15 high) followed by 77.86 (Sep 9 high).

Pound - 1.5550

Initial support at 1.5525 (Oct 10 low) followed by 1.5423 (Oct 7 low). Initial resistance is now at 1.5716 (Sept 29 high) followed by 1.5781 (Jul 12 low).



Australian Dollar - 0.9915

Initial support at 0.9728 (Oct 7 low) followed by the 0.9622 (Oct 6 low). Initial resistance is now at 1.0080 (Sep 22 high) followed by 1.0239 (61.8% retrace of 1.0765-0.9388).

Gold - 1664

Initial support at 1620 (Oct 10 low) followed by 1596 (Oct 4 low). Initial resistance is now at 1704 (Aug 25 high) followed by 1726 (50% retrace of 1921.15-1532.72).



Oil - 84.80

Initial support at 83.50 (Intraday Support) followed by 82.00 (Intraday Support). Initial resistance is now at  85.00 (Intraday resistance) followed by 86.50 (Intraday Resistance).





Written by Anthony Darvall