U.S. Dollar Trading (USD) risk off trading in Asia on North Korea fears sent the Euro and Aussie to day lows heading into Europe. Also supporting the Dollar is increasing yields on longer term US government bonds being attributed to the recent tax cut extensions. In US stocks, DJIA +13 points closing at 11372, S&P +4 points closing at 1227 and NASDAQ +10 points closing at 2609. Looking ahead, Weekly Jobless Claims are forecast 425k vs. 436k previously.
The Euro (EUR) tested support under 1.3200 before recovering and stabilizing in the lower 1.3200 region. EUR/JPY was able to edge higher as the Yen silently remains under pressure due to increasing US yields and ongoing Korean concerns. October German Industrial Production gains 2.9% vs. -1.0% previously. EUR/USD traded with a low of 1.3179 and a high of 1.3282 before closing at 1.3270. Looking ahead, November German CPI forecast at 0.1% m/m.
The Japanese Yen (JPY) resumed its rally breaking above Y84 on steady buying throughout the day. Crosses are enjoying gains as well with most trading in a buoyant tone. Overall the USDJPY traded with a low of 83.46 and a high of 84.32 before closing the day around 84.10 in the New York session. UPDATE Q3 GDP at 1.1% vs. 1.0% forecast y/y.
The Sterling (GBP) bounced aggressively off 1.5700 to lead the recovery in the US session. GBP/JPY buying and EUR/GBP selling is adding to the Cable support. December CBI Orders improved to -3 vs. -15 previously. Overall the GBP/USD traded with a low of 1.5666 and a high of 1.5839 before closing the day at 1.5810 in the New York session. Looking ahead, BOE Rate Announcement forecast at 0.5% and no change in Asset Purchase program.
The Australian Dollar (AUD) The Aussie tracked the Euro and stocks lower in Asia and struggled to recover later as gold fell in the US session. AUD/JPY performed the best holding above Y82. Overall the AUD/USD traded with a low of 0.9751 and a high of 0.9858 before closing the US session at 0.9780. Update RBNZ holds at 3.0%. Australian Unemployment +54k vs. +20k forecast.
Oil & Gold (XAU) moved another leg lower overnight on a resurgent Dollar. Overall trading with a low of USD$1370 and high of USD $1404 before ending the New York session at USD$1384 an ounce. Oil was slightly weaker overnight but finished well off lows. WTI Oil Closed -$0.33 at $88.36 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3290
Initial support at 1.3060 (Dec 2 low) followed by 1.2969 (Nov 30 low). Initial resistance is now located at 1.3280 (Dec 8 high) followed by 1.3401 (Dec 7 high)
Yen - 83.80
Initial support is located at 83.46 (Dec 8 high) followed by 82.32 (50% retrace of 80.22-84.41). Initial resistance is now at 84.41 (Nov 29 high) followed by 85.40 (Sept 24 high).
Pound - 1.5820
Initial support at 1.5669 (Dec 8 Low) followed by 1.5581 (Dec 3 low). Initial resistance is now at 1.5836 (Dec 8 high) followed by 1.5965 (Nov 23 high).
Australian Dollar - 0.9855
Initial support at 0.9739 (Dec 3 low) followed by the 0.9625 (Dec 2 low). Initial resistance is now at 0.9939 (Dec 3 high) followed by 1.0000 (Psychological Resistance).
Gold - 1385
Initial support at 1371 (Dec 3 low) followed by 1362 (Nov 30 low). Initial resistance is now at 1431 (Dec 7 high) followed by 1438 (1329.70 plus 1315.45-1424.60).
Oil - 88.40
Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.00 (Intraday Resistance).
Written by Anthony Darvall