Risk Aversion helps Dollar Bounce

U.S. Dollar Trading (USD) weaker than expected JP Morgan Results offset some upbeat Intel numbers to lead US stocks lower and help the Dollar gain into the weekend. Also adding to the renewed risk aversion was weaker than expected UoM Consumer sentiment at 72.8 vs. 73.9 forecast. DJIA -100 points closing at 10609, S&P -12 points closing at 1136 and NASDAQ -28 points closing at 2287. Looking ahead, Bank Holiday in the US.

The Euro (EUR) came under pressure breaking below 1.4450 support in Asia as rumors of Germany's Merkal losing political support spread throughout the market. A denial as the start of Europe did little to help with technical damage done and risk aversion beginning to tick higher. Overall the EUR/USD traded with a low of 1.4338 and a high of 1.4511 before closing at 1.4375.

The Japanese Yen (JPY) gained across the board as the market fled to the safe haven and heavy longs pared back. EUR/JPY was the worst hit as the single currency came under intense scrutiny and lost some of back up reserve currency status. Also helping the Yen to gain is speculation that the Chinese Yuan may strengthen at some point. Overall the USDJPY traded with a low of 90.61 and a high of 91.32 before closing the day around 90.80 in the New York session. Looking ahead, November Industrial Output previously at 2.6%.

The Sterling (GBP) held up better than most against the USD as the Pound found support on EUR/GBP constant selling. Still Cable fell from the 1.6300 level in the lower 1.62's before recovering into the US close. GBP/JPY fell to Y148 but the uptrend remains in place. Overall the GBP/USD traded with a low of 1.6212 and a high of 1.6353 before closing the day at 1.6260 in the New York session.

The Australian Dollar (AUD) was hurt by the change in investor appetite as the market was caught long after the good jobs data on Thursday. Falling commodities and a resurgent USD pushed the pair back to lower 0.92 support. AUD/JPY fell heavily as long liquidation accelerated from recent highs. Overall the AUD/USD traded with a low of 0.9214 and a high of 0.9319 before closing the US session at 0.9229.

Oil & Gold (XAU) came under pressure from broad USD strength. Overall trading with a low of USD$1127 and high of USD$1146 before ending the New York session at USD$1132 an ounce. Slipped in the the $78's as the recent slide continued. Crude Oil was down -$1.44 ending the New York session at $78.10.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4258

1.4303

1.4360

1.4579

1.4591

USD/JPY

90.16

90.36

90.90

92.05

92.42

GBP/USD

1.6137

1.6211

1.6285

1.6411

1.6477

AUD/USD

0.9124

0.9171

0.9220

0.9328

0.9406

XAU/USD

1115.00

1126

1131.00

1146

1161.00

OIL/USD

77.00

78.00

78.05

80.00

82.00

Euro - 1.4360

Initial support at 1.4303 (0.764 of 1.4218-1.4579) followed by 1.4258 (Jan 4 low). Initial resistance is now located at 1.4579 (0.382 of 84.83-93.77) followed by 1.4591 (Dec 16 high)

Yen - 90.90

Initial support is located at 90.36 (Jan 13 low) followed by 90.16 (Dec 21 low). Initial resistance is now at 92.05 (Jan 12 high) followed by 92.66 (Jan 11 high).

Pound - 1.6285

Initial support at 1.6211 (Jan 15 low) followed by 1.6137 (Jan 13 low). Initial resistance is now at 1.6411 (Dec 16 high) followed by 1.6477 (Dec 8 high).

Australian Dollar - 0.9220

Initial support at 0.9171 (Jan 12 low) followed by the 0.9124 (Jan 8 low). Initial resistance is now at 0.9328 (Jan 14 high) followed by 0.9406 (Nov 16 high).

Gold - 1131

Initial support at 1126 (Jan 15 low) followed by 1115 (Jan 5 low). Initial resistance is now at 1146 (Jan 14 high) followed by 1161 (Jan 11 high).

Oil - 78.05

Initial support at 78.00 (Intraday support) followed by 77.00 (Intraday Support). Initial resistance is now at 80.00 (Intraday Resistance) followed by 82.00 (Intraday Resistance).