Big Dollar Gains as Oil Crumbles
CURRENCY TRADING SUMMARY – 19th December 2008 (00:30GMT)
·U.S. Dollar Trading (USD) staged a major comeback after being sold for 5 straight days, making solid gains against all majors. Stocks slumped on Auto concerns and Oil also slumped to $36 a barrel on slumping demand. Weekly Jobless claims were better than expected at 543K vs. 558K forecast. The Philly Fed also beat expectations at -32.9 vs. -40K forecast. The recent USD weakness was seen by many as a little overdone and noted that the US may actually be ahead of the curve when it comes to monetary policy. In U.S. share markets, the NASDAQ was down 26 points (-1.71%) and the Dow Jones was down -219 points (-2.49%). Crude Oil closed down $1.86 ending the New York session at $38.20 per barrel.
·The Euro (EUR) finally pulled back against the dollar as the market found itself overextended after rallying over 2000 pips in 10 days. Against other majors it held up well making new record highs against the struggling Pound. Weighing on the Euro was the worse than expected December German IFO at 82.6 vs. 85.8 previously. Overall the EUR/USD traded with a low of 1.4183 and a high of 1.4718 before closing the day at 1.4220. Looking ahead, German PPI is expected to fall -1% in November for an annual figure of 5.9%.
·The Japanese Yen (JPY) weakened against the USD as markets bought the USD/JPY back to the 90 level. Attention now turns to the BoJ announcement today as to whether they cut rates or announce additional stimulus packages. Overall the USDJPY traded with a low of 87.27 and a high of 90.02 before closing the day around 89.50 in the New York session. UPDATE BOJ CUT RATES TO 0.1%
·The Sterling (GBP) was sold aggressively as the market punished the weakening economic outlook of the UK. Retail Sales actually gained 0.3% in November but could not provide support as the EUR/GBP surged higher and cable fell below 1.5000. Overall the GDP/USD traded with a low of 1.5247 and a high of 1.5720 before closing the day at 1.5500 in the New York session. UPDATE Gfk December fell -33 vs. -39 forecast.
·The Australian Dollar (AUD) broke lower after the USD finally strengthened and Oil led commodities lower. With little data out the AUD is tracking the Euro and Equities for direction and both dropped yesterday. Overall the AUD/USD traded with a low of 0.6765 and a high of 0.7138 before closing the US session at 0.6820.
·Gold (XAU) was dragged lower as Oil continued to weaken and the USD found some buyers. Overall trading with a low of USD$848 and high of USD$878 before ending the New York session at USD$855 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4141 |
1.4186 |
1.4230 |
1.4719 |
1.4768 |
|
USD/JPY |
86.14 |
87.15 |
89.50 |
90.74 |
91.98 |
|
GBP/USD |
1.4816 |
1.4900 |
1.5070 |
1.5616 |
1.5883 |
|
AUD/USD |
0.6663 |
0.6764 |
0.6920 |
0.7139 |
0.7238 |
|
XAU/USD |
802.00 |
830.00 |
848.00 |
881.00 |
900.00 |
·Euro – 1.4230
Initial support at 1.4186 (Dec 18 low) followed by 1.4141 (38.2% of 1.363 – 1.446). Initial resistance is now located at 1.4719 (Dec 18 high) at followed by 1.4768 (Sep 25 high)
·Yen – 89.50
Initial support is located at 87.15 (Dec 17 low) followed by 86.14 (Range Projection). Initial resistance is now at 90.74 (Dec 16 high) followed by 91.98 (Dec 15 high).
·Pound – 1.5070
Initial support at 1.4900 (Dec 18 low) followed by 1.4816 (Dec 12 low). Initial resistance is now at 1.5616 (Dec 18 high) followed by 1.5883 (Nov 10 high).
·Australian Dollar – 0.6920
Initial support at 0.6764 (Dec 18 low) followed by the 0.6663 (Dec 16 low). Initial resistance is now at 0.7139 (Dec 18 high) followed by 0.7238 (Oct 14 high).
·Gold – 848
Initial support at 830 (Nov 25 low) followed by 802 (Dec 11 low). Initial resistance is now at 881 (Dec 17 high) followed by 900 (Key Psychological round number).
