Market Brief
It's been a choppy day's trading for the USD; equity markets across Europe and the US have traded very heavily but there has been little decisive movement for the DXY (76.25 last). Gold has struggled to make gains above its crucial $1030 support, but this has been more indicative of sagging crude oil prices ($77.90 last) than a strengthening USD.

Scandinavian data dominated the morning price action; Swedish Consumer Confidence was slightly better than expected, but Retail Sales for Sep missed estimates (0.2% MoM vs. 0.5% consensus), and there were downward revisions to the month prior (-2.3% from -2.1%). USDSEK rallied off the lows at 6.9470 to touch a high of 7.0025, and EURSEK revisited resistance around 10.3600.

This was soon followed by Norwegian AKU Unemployment Rate that unexpectedly grew to 3.2% (3.1% forecast, 3.0% last month), causing a rapid spike higher for both USDNOK and EURNOK. USDNOK rallied to test resistance around 6.7200, but gradually sold off ahead of the crucial Norges Bank rate announcement. As expected, Norway's key rate was raised 25bps to 1.50%, but the accompanying statement signalled a steeper rate path to come. They noted that inflation was coming in higher than previously envisioned and unemployment was considerably lower than expected; suggesting it was therefore appropriate for the key rate to be raised somewhat more rapidly than previously projected. They now see rates to be at 3.5% in 2011 and 4.25% in 2012 compared with June forecasts of 2.75% and 3.75% respectively. Despite an initial spike lower, USDNOK bounced emphatically off the 5.6500-5.6550 support zone and has failed to puncture through on two further attempts (currently 5.6815).

In the afternoon session, US Durable Goods Orders were bang on expectations at 1.0% MoM, however New Homes Sales were distinctly disappointing: -3.6% MoM vs. +2.6% expected. The USD gleaned some support from the poor data, but EURUSD initially found decent bids around 1.4750-60 and USD gains since (1.4735 currently) have been hard won considering the slump in equity markets. Tonight's main event to watch will be the RBNZ meeting where we are in line with consensus expecting an unchanged rate at 2.5%. However given the recent uptick in inflation and improved economic data in the past month, we are expecting the RBNZ to drop their dovish bias in the accompanying statement.

The key events to watch tomorrow will include Norwegian Retail Sales, Eurozone Consumer Confidence, and the critical US Q3 GDP first reading.

Currency Tech
EURUSD
R 2: 1.5967
R 1: 1.4850
CURRENT: 1.4740
S 1: 1.4684
S 2: 1.4650

GBPUSD
R 2: 1. 6484
R 1: 1.6390
CURRENT: 1.6365
S 1: 1.6240
S 2: 1.6200

USDJPY
R 2: 93.10
R 1: 92.50
CURRENT: 91.00
S 1: 90.75
S 2: 90.10

AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.8995
S 1: 0.8985
S 2: 0.8900

USDCAD
R 2: 1.0830
R 1: 1.0785
CURRENT: 1.0780
S 1: 1.0620
S 2: 1.0500

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