Last week's currency trading review

The Dollar was mixed in a very volatile trading week with fresh month highs seen on Tuesday after the EUR/USD broke below 1.3000 before reversing sharply on talk the ECB would aggressively intervene to support struggling countries sovereign debt. Strong data in the US helped equities with ADP Unemployment Change +93k vs. +70k forecast and suggests that Friday's NonFarm Payrolls could also be strong, currently forecast at 140k vs. 151k previously. UPDATE NONFARM PAYROLLS +39k vs. +140k. The Euro was crushed on debt contagion fears early in the week as Portuguese and Spanish Bond Yields surged and speculators pushed the single currency below 1.3000. The market reversed sharply however on Wednesday as global stock markets rallied and a story that the US supported a IMF/EU bailout fund expansion circulated. The EUR/USD fell +1.29% closing  at 1.3412, after opening the week at 1.3239.

The Japanese Yen went into a range with USD strength and weakness sending USD/JPY in an orbit around Y84. Yen Crosses were much more volatile as the tracked there respective majors and stock markets. AUD/JPY rebounded nicely on Wednesday with the US Dow Jones Index rallying 250 Points. The USD/JPY fell -1.84% closing at 82.53, after opening at 84.05. The GBP tracked the EUR/USD but underperformed on the topside as the market found itself caught short on the EUR/GBP after two weeks of heavy selling. UK House Prices continue to be under pressure with Nationwide HPI falling -0.3% m/m in November. The GBP/USD gained +1.19% closing at 1.5775 after opening at 1.5588. The AUD came under pressure with disappointing economic  data, Q3 GDP missed at 0.2% vs. 0.5% Q/Q forecast and October Retail Sales fell -1.1% vs. +0.3% forecast. The major change in investor sentiment on Wednesday and Thursday allowed a sharp rebound back to the 0.9750 level. The AUD/USD gained +2.89% closing at 0.9930 after opening at 0.9643.

The Forex Trading Week Preview

In the States; On Thursday, Weekly Jobless Claims previously at 436k. On Friday, Trade Balance previously at -44bn m/m and UoM Consumer Sentiment Previously at 71.6. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday German Factory Orders previously -4.0% m/m. On Wednesday, German Industrial Production previously at -0.8% m/m. In the UK, On Tuesday, Manufacturing Production previously at 0.1% m/m. On Thursday, MPC Rate Statement forecast to remain at 0.5% with the Asset purchase program remaining at 200m. On Friday, PPI previously  at 2.1% m/m. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Thursday, Final GDP previously at 0.9%.  In Australia; On Tuesday, RBA Rate announcement is forecast unchanged at 4.75%. On Thursday, Employment Change previously at 29.7k and the Unemployment Rate previously at 5.4%. We will provide our previews and reviews of these data releases in the daily summary.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2830

1.2969

1.3390

1.3419

1.3634

USD/JPY

81.83

82.53

82.80

84.41

85.40

GBP/USD

1.5297

1.5485

1.5760

1.5788

1.5838

AUD/USD

0.9477

0.9537

0.9915

0.9939

1.000

XAU/USD

1351.00

1362

1410

1415

1424

OIL/USD

87.0

88.00

89.35

90.00

91.00





Euro - 1.3390

Initial support at 1.2969 (Nov 30 low) followed by 1.2830 (Sep 14 low). Initial resistance is now located at 1.3419 (Dec 3 high) followed by 1.3634 (Nov 23 high)



Yen - 82.80

Initial support is located at 82.53 (Dec 3 low) followed by 81.83 (0.618 of 80.23-84.40). Initial resistance is now at 84.41 (Nov 29 high) followed by 85.40 (Sept 24 high).

Pound - 1.5760

Initial support at 1.54 (Nov 29 Low) followed by 1.5297 (Sep 7 low). Initial resistance is now at 1.5648 (Nov 29 high) followed by 1.5773 (Nov 26 high).

Australian Dollar - 0.9915

Initial support at 0.9537 (Dec 1 low) followed by the 0.9477 (50% retrace of 0.8771-1.0183). Initial resistance is now at 0.9939 (Dec 3 high) followed by 1.0000 (Psychological Resistance).

Gold - 1410

Initial support at 1362 (Nov 30 low) followed by 1351 (Nov 26 low). Initial resistance is now at 1415 (Dec 3 high) followed by 1424 (Nov 9 high).

Oil - 89.35

Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.00 (Intraday Resistance).





Written by Anthony Darvall