U.S. Dollar Trading (USD) stocks and commodities surged putting the USD on the back foot and risk back on around the world. The FED Beige book showed positive signs with all districts showing improvement in the US. In US stocks, DJIA +83 points closing at 11755, S&P +11 points closing at 1286 and NASDAQ +20 points closing at 2737. Looking ahead, Weekly Jobless Claims are forecast at 405k vs. 409k previously. Also released, November Trade Balance forecast at -40.5bn vs. -38.7bn previously.
The Euro (EUR) The Euro recovered above 1.3000 and extended gains on easing Bond yields after good demand for Portuguese bonds overnight. Economic Data was also good with German GDP seen at 3.6%y/y in 2010 and November EU Industrial Production at 1.2% vs. 0.5% forecast. EUR/USD traded with a low of 1.2961 and a high of 1.3146 before closing at 1.3125. Looking ahead, ECB Rate Decision forecast to remain at 1.0% and speech from President Trichet.
The Japanese Yen (JPY) the major was supported from strong Crosses with AUD/JPY and EUR/JPY leading the market higher in buoyant trade. The Y83.50 to Y82.80 range has been holding for a week now with the market hesitant to pick direction. Overall the USDJPY traded with a low of 82.80 and a high of 83.48 before closing the day around 83.05 in the New York session.
The Sterling (GBP) weak November Trade Balance data at -8.7bn m/m a new record was shrugged off with the market tracking the Euro to fresh week highs above 1.5750. Overall the GBP/USD traded with a low of 1.5581 and a high of 1.5783 before closing the day at 1.5755 in the New York session. Looking ahead, MPC Rate Decision forecast to hold at 0.5%.
The Australian Dollar (AUD) was very strong as shorts where squeezed and flooding was not as bad as forecast in the countries third biggest city. The weak USD and strong risk on environment made the Aussie the best performer in 2010 and should remain strong if the same conditions remain this year. Overall the AUD/USD traded with a low of 0.9818 and a high of 0.9969 before closing the US session at 0.9950.
Oil & Gold (XAU) continue to trend upwards testing $1390 in quiet trade. Overall trading with a low of USD$1376 and high of USD $1389 before ending the New York session at USD$1385 an ounce. Crude was very strong pushing above $92 a barrel before settling just under the figure. WTI Oil Closed +$0.70 at $91.90 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3120
Initial support at 1.2905 (Jan 11 low) followed by 1.2796 (61.8% retrace of 1.1877-1.4282). Initial resistance is now located at 1.3170 (Jan 6 high) followed by 1.3325 (Jan 5 high)
Yen - 83.10
Initial support is located at 82.67 (Jan 10 low) followed by 81.89 (Jan 5 low). Initial resistance is now at 83.68 (Jan 7 high) followed by 84.11 (Dec 20 high).
Pound - 1.5750
Initial support at 1.5598 (Jan 12 Low) followed by 1.5513 (Dec 30 low). Initial resistance is now at 1.5775 (Dec 15 high) followed by 1.5822 (50% retrace of 1.6299-1.5345).
Australian Dollar - 0.9955
Initial support at 0.9804 (Jan 12 low) followed by the 0.9753 (Dec 8 low). Initial resistance is now at 0.9983 (Jan 10 high) followed by 1.0015 (Jan 6 high).
Gold - 1385
Initial support at 1365 (Jan 10 low low) followed by 1352 (Jan 7 low). Initial resistance is now at 1396 (61.8% retrace of 1352.70-1424.05) followed by 1417 (Jan 4 High).
Oil - 91.90
Initial support at 90.00 (Intraday Support) followed by 89.00 (Intraday Support). Initial resistance is now at 92.50 (Intraday Resistance) followed by 95.00 (Intraday Resistance).
Written by Anthony Darvall