â€¢ U.S. Dollar Trading (USD) was battered against a number of majors as U.S. interest rates are foreseen to drop by 50 basis points to sit lower then the call rate in the EU. The USD weakness continued from last weeks theme following dovish comments by Fed officials, led by Chairman Bernanke that substantial easing may materialize if deemed needed. In U.S. share markets the NASDAQ was up by 91.87 points (+0.98%) whilst the Dow Jones was also up by 171.85 points (+1.36%) at the end of the bell. Crude oil was higher on Monday by US$1.27 a barrel to US$93.96 on the back of other commodities. Looking ahead, Retail Sales and PPI figures prove the most important data releases leading into the next FOMC meeting.
â€¢ The Euro (EUR) came within a cent of its all time high versus the dollar as traders added to bets that the Fed will lower its call rate at the end of the month. In data news Industrial Production data was released higher than the expectations, adding to further Euro strength. Overall the EURUSD traded with a low of 1.4780 and a high of 1.4915 before closing the day at 1.4873 in the New York session. The German ZEW survey is widely expected to fall for the month of January, to -40 (Prior: -37.2)
â€¢ The Japanese Yen (JPY) saw Japanese markets closed for Coming of Age Holiday yet was able to move, tracking Asian equity prices closing lower on further write downs in the US financial sector reducing appeal for the carry trade. Overall the USDJPY traded with a low of 107.38 and a high of 108.95 before closing the day at 108.29 in the New York session.
â€¢ The Sterling (GBP) was one of the rare majors that failed to find any demand against the USD as an industry survey showed U.K. companies issued the most profit warnings in six years in the fourth quarter, fueling speculation the Bank of England will keep cutting interest rates. As a result the Sterling pound also posted a fresh record low versus the Euro. The GBPJPY traded at a 1 Â½ year low as almost a fifth of Britain's companies said they missed their profit estimates because of the collapse of the U.S. sub-prime mortgage market, Ernst & Young LLP said. Overall the GBPUSD traded with a low of 1.9558 and a high of 1.9646 before closing the day at 1.9567 in the New York session. UK House prices and CPI figures will be key to the Sterling Pound today.
â€¢ The Australian Dollar (AUD) was stronger on views that that the US will lower their interest rate, widening the gap between the two currencies. Overall the AUDUSD traded with a low of 0.8893 and a high of 0.9003 before closing the day at 0.8995 in the New York session.
â€¢ Gold (XAU) surged above $900 a troy ounce for the first time ever as investors on Monday sought refuge from a weakening US dollar and alarm bells about further losses on Wall Street. XAU traded with a low of 893.00 and a high of 914.00.
â€¢ Euro â€“ 1.4870
Initial support at 1.4762 (Jan 14 low) followed by 1.4640 (Jan 9 low). Initial resistance is now located at 1.4915 (Jan 14 high) followed by 1.4968 (Nov 23 high).
â€¢ Yen â€“ 108.30
Initial support is located at 107.38 (Jan 14 low) followed by 107.23 (Nov 26 trend low). Initial resistance is now at 108.98 (Jan 14 high) followed by 110.12 (Jan 9 high)
â€¢ Pound â€“ 1.9540
Initial support at 1.9484 (Jan 11 low) followed by 1.9432 (Mar 20 low). Initial resistance is now at 1.9648 (Jan 14 high) followed by 1.9669 (Jan 10 high)
â€¢ Australian Dollar â€“ 0.8980
Initial support a 0.8878 (Jan 14 low) followed by 0.8812 (Jan 10 low). Initial resistance is now at 0.9017 (Nov 15 high) followed by 0.9076 (61.8% retracement of the 0.9400 to 0.8553 decline)
â€¢ Gold â€“ 905.80
Initial support at 887.90 (Jan 11 low) followed by 866.5 (Jan 10 low). Initial resistance is now at 914.40 (Jan 14 high) followed by 925 (Round number resistance)