U.S. Dollar Trading (USD) US stocks continued higher and the USD remained under pressure as investors searched for higher returns. With easing banking fears the market is now looking to economic data and Central Bank interest rate announcements for direction in FX. In US stocks, DJIA +108 points closing at 11980, S&P +7 points closing at 12 and NASDAQ + points closing at 2717. Looking ahead, January Consumer Confidence is forecast at 54.3 vs. 52.5 previously. November Case Shiller House Prices forecast at -0.9% vs. -1.3% m/m.
The Euro (EUR) The Euro hit fresh year highs before profit taking set in but the outlook is growing more bullish as the ECB is seen more likely to raise rates earlier than the US FED. January PMI survey's remain strong with Services at 55.2 vs. 54.2 previously and Manufacturing at 56.9 vs. 57.1 previously. EUR/USD traded with a low of 1.3539 and a high of 1.3687 before closing at 1.3640. Looking ahead, February German Consumer Sentiment is forecast at 5.4 vs. 5.4 previously.
The Japanese Yen (JPY) was stronger against the weak Dollar but mixed against the rest in 'risk on' trading. News a terrorist attack in Moscow helped the safe haven CHF and JPY but the effects were small and short-lived. Overall the USDJPY traded with a low of 82.28 and a high of 82.94 before closing the day around 82.50 in the New York session. Looking ahead, BOJ Rate Decision forecast to hold at 0.1%.
The Sterling (GBP) struggled to match the rallies in the rest of the market with the 1.6000 level providing selling protection. EUR/GBP is building strength above the 0.8500 level as central banks diversify into the single currency. Overall the GBP/USD traded with a low of 1.5918 and a high of 1.6016 before closing the day at 1.5985 in the New York session. Looking ahead, Q4 GDP forecast at 0.5% vs. 0.7% previously.
The Australian Dollar (AUD) was buoyant with the rise in copper and Equities supporting the risk sensitive currency. The Central bank outlook for Australia is mixed with some calling for more hikes this year whilst others look for a hold given the recent tragic flooding. Overall the AUD/USD traded with a low of 0.9863 and a high of 1.0024 before closing the US session at 0.9980.
Oil & Gold (XAU) fresh month lows where seen in late US trade on reduced safe haven demand. Overall trading with a low of USD$1332 and high of USD $1354 before ending the New York session at USD$1335 an ounce. Oil came under heavy selling pressure down under $88 a barrel. WTI Oil Closed -$1.90 at $87.70 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3645
Initial support at 1.3541 (Jan 24 low) followed by 1.3449 (Jan 21 low). Initial resistance is now located at 1.3741 (61.8% retrace of 1.4282-1.2867) followed by 1.3786 (Nov 22 high)
Yen - 82.60
Initial support is located at 81.89 (Jan 5 low) followed by 81.61 (Jan 4 low). Initial resistance is now at 83.15 (Jan 13 high) followed by 84.11 (Dec 20 high).
Pound - 1.5980
Initial support at 1.5878 (Jan 18 Low) followed by 1.5719 (Jan 13 low). Initial resistance is now at 1.6038 (Jan 19 high) followed by 1.6184 (Dec 12 High).
Australian Dollar - 0.9975
Initial support at 0.9804 (Jan 12 low) followed by the 0.9753 (Dec 8 low). Initial resistance is now at 1.0009 (Jan 20 High) followed by 1.0077 (Jan 19 high).
Gold - 1338
Initial support at 1329 (Nov 16 low) followed by 1325 (Nov 3 low). Initial resistance is now at 1353 (Jan 24 high) followed by 1371 (Jan 20 high).
Oil - 87.60
Initial support at 87.00 (Intraday Support) followed by 85.00 (Intraday Support). Initial resistance is now at 88.00 (Intraday Resistance) followed by 90.00 (Intraday Resistance).
Written by Anthony Darvall