U.S. Dollar Trading (USD) the Dollar continued to be under pressure yesterday with stocks pushing fresh highs and the US FED voting to keep rates low for an extended period. New Home Sales surged 17% in December and helped keep investor sentiment strong. In US stocks, DJIA +8 points closing at 11985, S&P +5 points closing at 1296 and NASDAQ +20 points closing at 2739. Looking ahead, Weekly Jobless Claims are forecast at 405k vs. 404k previously.
The Euro (EUR) toyed with the 1.3700 level throughout the day ending slightly above the figure after USD weakness post FOMC. EUR/GBP reversed on GBP strength but support for most crosses is being found with easing Eurozone Debt concerns. EUR/USD traded with a low of 1.3640 and a high of 1.3724 before closing at 1.3700. Looking ahead, World Economic Forum All Day.
The Japanese Yen (JPY) tested Y82 again as the Dollar remained under pressure before rallying in the US session on strong housing data. The FOMC statement undid the positive momentum and the pair finished on a weak note. Overall the USDJPY traded with a low of 81.96 and a high of 82.62 before closing the day around 82.20 in the New York session.
The Sterling (GBP) received support from the MPC minutes after the shocking GDP release on Tuesday. The MPC minutes showed 7-2 vote for a hold at the last meeting. The additional member voting for a rate hike was on the back of recent high inflation numbers and fueled trader expectations of early interest rate increases. Overall the GBP/USD traded with a low of 1.5767 and a high of 1.5942 before closing the day at 1.5910 in the New York session. Looking ahead, January CBI Distributive Trades are forecast at 35 vs. 56 previously.
The Australian Dollar (AUD) found resistance at parity overnight but was well supported on dips and could break the key level if investor sentiment remains high. The Aussie is continuing to underperform on crosses with AUD/NZD on the back foot and EUR/AUD pushing higher in recent sessions. Overall the AUD/USD traded with a low of 0.9928 and a high of 1.0000 before closing the US session at 0.9980.
Oil & Gold (XAU) rallied on the back of the dovish FOMC statement. Overall trading with a low of USD$1324 and high of USD $1347 before ending the New York session at USD$1343 an ounce. Oil found support at $86 and rallied sharply. WTI Oil Closed +$1.36 at $87.55 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3690
Initial support at 1.3573 (Jan 25 low) followed by 1.3541 (Jan 24 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 - 82.25
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 - 1.5905
Initial support at 1.5702 (50 % retrace of 1.5345-1.6059) followed by 1.5618 (61.8% retrace of 1.5345-1.6059). Initial resistance is now at 1.6017 (Jan 25 high) followed by 1.6059 (Jan 18 High).
Australian Dollar - 0.9980
Initial support at 0.9864 (Jan 24 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 - 1343
Initial support at 1319 (Oct 27 low) followed by 1300 (Rounds Number). Initial resistance is now at 1353 (Jan 24 high) followed by 1371 (Jan 20 high).
Oil - 87.50
Initial support at 85.00 (Intraday Support) followed by 82.50 (Intraday Support). Initial resistance is now at 88.00 (Intraday Resistance) followed by 89.00 (Intraday Resistance).
Written by Anthony Darvall