Last week's currency trading review

The Dollar was mixed throughout the week under pressure due to strong investor sentiment and strength from the ongoing Eurozone Sovereign Debt crisis. US data continues to with November Retail Sales gaining 0.8% vs. 0.6% forecast. The FOMC meeting held rates at 0.25%, widely expected and changed very little in the monetary statement. The Euro was sold on rallies with Spain put on negative review and political infighting continuing to cloud the outlook. November German ZEW Survey improved to 4.3 vs. 1.8 previously. The EU Economic Summit on Thursday and Friday will be looking to increase the bailout fund and sure up commitments. The EUR/USD fell -0.29% closing at 1.3187, after opening the week at 1.3225.

The Japanese Yen was under pressure due to the upbeat stock markets around the world although movement was contained as USD/JPY fail to break Y84.50 on multiple occasions. The USD/JPY fell -0.05% closing at 83.90, after opening at 83.95. The GBP was sold aggressively early in the week but bounced off 1.5500 to finish well off lows. Data was mixed with Rightmove HPI -3.0% m/m and the ILO Unemployment Rate jumping to 7.9% vs. 7.7% previously both weighing, whilst CPI increased to 3.3% vs. 3.1% forecast and PPI increased to 0.9% m/m.  The GBP/USD fell -1.73% closing at 1.5530 after opening at 1.5799. The AUD continued to trade inside the 0.9800-1.000 range with stock markets supported but concerns about China tightening and Eurozone Debt weighing. AUD/JPY traded at month highs above Y83 and could extend gains as sentiment improves and technicals support. The AUD/USD gained +0.28% closing at 0.9880 after opening at 0.9852.

The Forex Trading Week Preview

In the States; On Wednesday, Q3 GDP Final released previously at 2.5%. Existing Home Sales also released, previously at 4.43m. On Thursday, Weekly Jobless Claims previously at 420k. November New Home Sales previously 283k.  We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Monday, German PPI previously at 0.4% m/m. In the UK, On Monday, November Mortgage Approvals previously at 47k. On Wednesday, MPC minutes released forecast at 1-0-8. Q3 Final GDP also released previously at 0.8%. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Monday, BOJ Meeting forecast to remain at 0.1%. On Tuesday, Trade Balance previously at 0.58T. In Australia; On Tuesday, RBA Minutes from the December Rate Meeting. 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

1.3061

1.3133

1.3150

1.3382

1.3499

USD/JPY

82.84

83.60

83.95

84.51

85.40

GBP/USD

1.5346

1.5455

1.5510

1.5775

1.5911

AUD/USD

0.9776

0.9833

0.9885

1.0031

1.0091

XAU/USD

1351.00

1361

1384

1386

1408

OIL/USD

87.00

88.00

88.90

89.50

90.00





Euro - 1.3150

Initial support at 1.3133 (Dec 17 low) followed by 1.3061 (Dec 2 low). Initial resistance is now located at 1.3382 (Dec 15 high) followed by 1.3499 (Dec 14 high)



Yen - 83.95

Initial support is located at 83.60 (Dec 15 high) followed by 82.84 (Dec 14 low). Initial resistance is now at 84.51 (Dec 15 high) followed by 85.40 (Sept 24 high).

Pound - 1.5510

Initial support at 1.5455 (Dec 17 Low) followed by 1.5346 (Sep 10 low). Initial resistance is now at 1.5775 (Dec 15 high) followed by 1.5911 (Dec 14 high).

Australian Dollar - 0.9885

Initial support at 0.9833 (Dec 13 low) followed by the 0.9776 (Dec 9 low). Initial resistance is now at 1.0031 (76.4% retrace of 1.0183-0.9537) followed by 1.0091 (Nov 11 high).

Gold - 1384

Initial support at 1361 (Dec 16 low) followed by 1351 (Nov 26 low). Initial resistance is now at 1386 (Dec 16 high) followed by 1408 (Dec 14 high).

Oil - 88.90

Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 89.50 (Intraday Resistance) followed by 90.00 (Intraday Resistance).





Written by Anthony Darvall