• U.S. Dollar Trading (USD) strengthened against the majors in the overnight session despite poor data locally. There are lingering concerns that liquidity issues will spread to European banks whilst Goldman Sachs Group Inc. announced that the US dollar’s decline may be ending. GDP for the Q3 came in slightly better than expected at 4.9% compared to a 4.8% estimate whilst jobless claims disappointed rising to 352k from a 332k estimate. New home sales came in less than expected but higher than previous result at 728k. In U.S. share markets, the NASDAQ was up 5pts (+0.2%) while the Dow Jones moved up by 22 points (+0.17%). Crude oil rallied after an explosion at a pipeline in Canada causing it to rise by US38c a barrel to US$91.00. Looking ahead, Federal Reserve Chairman Bernanke is due to speak today as well as Poole and Kroszner. Core PCE and Chicago PMI are due for release.

• The Euro (EUR) retreated against the greenback in light of concerns that European banks may be unwilling to lend funds as normal and that this is spreading. Overall the EURUSD traded with a low of 1.4723 and a high of 1.4843 before closing the day at 1.4753. Looking ahead, CPI, GDP, and confidence indicators are due out today.

• The Japanese Yen (JPY) recouped some losses despite lingering nervousness about the state of credit markets. All eyes will be on a host of data from the land of the rising sun due out today which could dictate policy moves ahead. Overall the USDJPY traded with a low of 109.47 and a high of 110.31 before closing the day at 109.88. Looking ahead, jobless rate, CPI, and nationwide house prices are due out today. UPDATE: Household spending came in as expected at +0.6%, Nationwide Core CPI came in at +0.1% beating expectations of unchanged, Nationwide CPI came in at +0.3% compared to -0.2% previously and unemployment remained steady at 4%.

• The Sterling (GBP) fell in the overnight session as Governor King made dovish comments to a parliamentary committee hearing, fueling speculation of a rate cut from the UK sooner rather than later. Mortgage approvals fell to their lowest level in 3 years to 88k from a previous result of 100k and a 97k expectation. Overall the GBPUSD traded with a low of 2.0595 and a high of 2.0823 before closing the session at 2.0615.

• The Australian Dollar (AUD) pulled back also against the US Dollar thanks in part to a sell-off around 0.8% in AUDJPY. CAPEX figures for Q3 came disappointingly lower than expected. CAPEX fell -6.5% from +6.5% previously and compared to a +1.7% estimate. The AUDUSD traded with a low of 0.8777 and a high of 0.8904 before closing the day at 0.8825.

• Gold (XAU) was weaker inline with other metals. Gold fell by US$8.70 to US$795.10 an ounce.


• Euro – 1.4760

Initial support at 1.4712 (Nov 28 low) followed by 1.4692 (61.8% retracement of the 1.4521 to 1.4968 advance). Initial resistance is now located at 1.4859 (Nov 28 high) followed by 1.4908 (Nov 27 high).

• Yen – 109.70

Initial support is located at 108.27 (Nov 28 low) followed by 107.23 (Nov 26 low). Initial resistance is now at 110.58 (Nov 20 high) followed by 111.76 (Nov 14 high)

• Pound – 2.0625

Initial support at 2.0584 (Nov 28 low) followed by 2.0519 (Nov 23 low). Initial resistance is now at 2.0833 (Nov 28 high) followed by 2.0846 (Nov 14 high)

• Australian Dollar – 0.8830

Initial support a 0.872 (Nov 28 low) followed by 0.8654 (Nov 21 low). Initial resistance is now at 0.8921 (Nov 28 high) followed by 0.8939 (38.2% retracement of the 0.9400 to 0.8654 decline)

• Gold – 793

Initial support at 791.8 (Nov 28 low) followed by 773.0 (Nov 20 low). Initial resistance is now at 815.7 (Nov 28 high) followed by 829.4 (November 27 high)