Daily Outlook - Year End Positions Flows Dominating Market

By @ibtimes on

U.S. Dollar Trading (USD) had a volatile and mixed trading session in thin liquidity with year end flows dominating and often confusing traders. Normal relationships broke down with GBP falling whilst the Euro rallied and the Aussie came under broad profit taking pressure. Weekly Jobless Claims fell below 400k to 388k in promising signs that the US job market was picking up. In US stocks, DJIA -15 points closing at 11569, S&P -2 points closing at 1257 and NASDAQ -4 points closing at 2662.

The Euro (EUR) The Euro managed solid gains breaking to multi week highs above 1.3300. EUR/GBP also moved higher as the two majors diverged paths. EUR/USD traded with a low of 1.3218 and a high of 1.3317 before closing at 1.3300. Looking ahead, German Bank Holiday.

The Japanese Yen (JPY) was calm in a 40 pip range stabilizing the recent fall with most of the movement reserved for crosses. EUR/JPY reclaimed Y108 with the major moving higher. Overall the USDJPY traded with a low of 81.27 and a high of 81.88 before closing the day around 81.50 in the New York session.       

The Sterling (GBP) fell sharply from above 1.5500 to 1.5360 as widespread GBP selling was noted on many crosses. Overall the GBP/USD traded with a low of 1.5365 and a high of 1.5539 before closing the day at 1.5430 in the New York session. Looking ahead, Nationwide HP forecast -0.3% m/m.

The Australian Dollar (AUD) tested 1.0200 before falling on a combination of year-end profit taking and weak Chinese PMI data 54.4 vs. 55.3 previously. Support was found at 1.0140 and the pair finished on a firm footing. Overall the AUD/USD traded with a low of 1.0117 and a high of 1.0200 before closing the US session at 1.0170.

Oil & Gold (XAU) Mild profit taking pulled the precious metal back towards $1400. Overall trading with a low of USD$1402 and high of USD $1415 before ending the New York session at USD$1407 an ounce. Oil pulled back substantially on heavy year end profit taking back to below $90 a barrel. WTI Oil Closed -$1.60 at $89.50 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3055

1.3073

1.3290

1.3359

1.3382

USD/JPY

80.54

81.23

81.50

83.17

84.12

GBP/USD

1.5297

1.5345

1.5435

1.5568

1.5647

AUD/USD

0.9863

1.0040

1.0155

1.0200

1.0300

XAU/USD

1372.00

1382

1407

1414

1431

OIL/USD

88.00

89.00

89.50

90.00

91.50

Euro - 1.3290

Initial support at 1.3073 (Dec 27 low) followed by 1.3055 (Dec 23 low). Initial resistance is now located at 1.3359 (Dec 17 high) followed by 1.3382 (Dec 15 high)

Yen - 81.50

Initial support is located at 81.23 (76.4% retrace of 80.22-84.51) followed by 80.54 (Nov 9 low). Initial resistance is now at 83.17 (Dec 24 high) followed by 84.12 (Dec 20 high).

Pound - 1.5435

Initial support at 1.5345 (Sep 8 Low) followed by 1.5297 (Sep 7 low). Initial resistance is now at 1.5568 (Dec 21 high) followed by 1.5647 (Dec 17 high).

Australian Dollar - 1.0155

Initial support at 1.0040 (Dec 28 low) followed by the 0.9863 (Dec 20 low). Initial resistance is now at 1.0200 (Round Number) followed by 1.0300 (Round Number Support).

Gold - 1407

Initial support at 1382 (Dec 28 low) followed by 1372 (Dec 23 low). Initial resistance is now at 1414 (Dec 30 high) followed by 1431 (Dec 7 High).

Oil - 89.50

Initial support at 89.00 (Intraday Support) followed by 88.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.50 (Intraday Resistance).

Written by Anthony Darvall

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