09/01/06
Comment:
The Dollar was weaker versus the major currencies in the first week of trading for 2006. The Euro closed last week at 1.2150 having started the week at 1.1900. US$/JPY closed last week at 114.60 having started the week at 117.80. The GBP closed last week at 1.7700 having started the week at 1.7240. The A$ closed last week at 0.7530 having started the week at 0.7330.
last week’s recap
The Dollar weakened early in the week versus the major currencies on the back of weaker than expected economic data and the FOMC minutes, which once again signaled that the rate hiking cycle is coming to an end. Eurozone data came out on the firm side of expectations right through the week however this had little impact on the Euro as the move higher was sparked by the weak dollar. The Japanese yen strengthened late in the week on the back of disappointing payroll data out of the States. The Aussie rallied strongly right through the week, assisted by a weak dollar and a rally in base metal prices.
The week ahead
The data due out early in the New Year continues to suggest a positive slant with
In the States despite all the problems that were thrown at it, the
In the Eurozone one of the really surprising data releases of the past month was the German ZEW survey. Near-term, this improvement may have some momentum and the market expects another (more modest) gain in January (Tuesday). The pace of growth of industrial production in
In
Key Weekly Pivot levels
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
EUR/USD |
1.1931 |
1.2005 |
1.2050 |
1.2181 |
1.2208 |
USD/JPY |
113.53 |
113.73 |
114.60 |
115.52 |
116.30 |
GBP/USD |
1.7513 |
1.7619 |
1.7650 |
1.7810 |
1.7904 |
AUD/USD |
0.7398 |
0.7444 |
0.7490 |
0.7580 |
0.7605 |
- Euro – 1.2140
The Euro has started to retrace and is targeting initial support at 1.2005 (Jan 4 low).This is followed by secondary support at 1.1931 (former resistance from Dec 28). Initial resistance now located at 1.2181 (Jan 6 high) followed by 1.2208 (Oct 6 high).
- Yen – 114.00
The breach of the formerly supportive 115.52 level from Dec 19 establishes a pattern of lower lows and lower highs and reinforces the down-trend from Dec 5”s 121.41 trend top. The support now converts into initial resistance at 115.52 (former support from Dec 19) followed by 116.30 (Jan 6 high). Initial support is located at 113.73 (former resistance from Jul 20) followed by 113.53 (61.8% retracement of the 108.76 to 121.41 advance).
- Pound – 1.7705
Initial support is located at 1.7619 (former resistance from Jan 4) followed by 1.7513 (Jan 6 low). Initial resistance is located at 1.7810 (Dec 14 high) followed by 1.7904 (Oct 27 high).
- Aussie – 0.7525
Initial resistance is located at 0.7580 (Dec 14 high) followed by 0.7605 (Dec 14 high) followed by 0.7605 (Oct 27 high). Initial support is located at 0.7444 (Jan 5 low) followed by 0.7398 (Jan 4 low).