Markets searching for direction
CURRENCY TRADING SUMMARY – 19th January 2009 (00:30GMT)
·U.S. Dollar Trading (USD) had a volatile trading session initially weakening throughout the day as markets gained confidence and equities markets rallied in Europe and Asia. Weak US data and concerns about Citibank and Bank of American sent US stocks lower at the start of the session which helped the Dollar to strengthen but a late rally allowed this safe haven demand to subside. December CPI fell -0.7% broadly as expected while the core was flat. Of concern was Industrial Production which fell 2% in December while Capacity Utilization dropped to 73.6%. In U.S. share markets, the NASDAQ was up 17 points (1.16%) and the Dow Jones was up 68 points (0.84%). Crude Oil closed up $1.11 ending the New York session at $36.51 per barrel. Looking ahead, Public Holiday in the US.
·The Euro (EUR) found strength on the downbeat US data gaining across the board. EUR/JPY surged higher on decreased risk aversion. Helping support the Euro was reported comments from Trichet that he had no plans for a zero interest rate policy. Overall the EUR/USD traded with a low of 1.3110 and a high of 1.3345 before closing the day at 1.3180.
·The Japanese Yen (JPY) was sold as stock markets rallied across the world. Many market participants expect an Obama rally this week and this prompted short covering into the weekend. Overall the USDJPY traded with a low of 89.76 and a high of 90.91 before closing the day around 90.58 in the New York session. Looking ahead, November Industrial Output expected to be confirmed at -8.1%.
·The Sterling (GBP) rallied into the weekend but reaction to a new Banking bailout plan was mixed and EUR/GBP rallied into the close. The cable rally ran into resistance at the key 1.5000 level and selling was intensified as equities fell in early US trade. Overall the GDP/USD traded with a low of 1.4653 and a high of 1.4980 before closing the day at 1.4702 in the New York session.
·The Australian Dollar (AUD) was volatile testing both the topside and downside as the market searched for new direction. AUD/JPY buying and a large rally in Gold helped to support the pair into the weekend although it ended well off its highs. Overall the AUD/USD traded with a low of 0.6648 and a high of 0.6796 before closing the US session at 0.6684.
·Gold (XAU) rallied hard on poor US data and strong demand for an alternative investment. Overall trading with a low of USD$816 and high of USD$840 before ending the New York session at USD$839 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3000 |
1.3111 |
1.3320 |
1.3374 |
1.3489 |
|
USD/JPY |
88.48 |
89.74 |
91.00 |
91.67 |
92.29 |
|
GBP/USD |
1.4470 |
1.4622 |
1.4830 |
1.4981 |
1.5029 |
|
AUD/USD |
0.6538 |
0.6628 |
0.6750 |
0.6820 |
0.7042 |
|
XAU/USD |
802.00 |
816.20 |
843.00 |
857.00 |
870.00 |
·Euro – 1.3320
Initial support at 1.3111 (Jan 16 low) followed by 1.3000 (Dec 11 low). Initial resistance is now located at 1.3374 (Jan 15 high) at followed by 1.3489 (Jan 12 high)
·Yen – 91.00
Initial support is located at 89.74 (Jan 16 low) followed by 88.48 (Jan 15 low). Initial resistance is now at 91.67 (Jan 9 high) followed by 92.29 (61.8% retrace 94.64 to 88.48).
·Pound – 1.4830
Initial support at 1.4622 (Jan 16 low) followed by 1.4470 (Jan 13 low). Initial resistance is now at 1.4981 (Jan 16 high) followed by 1.5029 (61.8% retrace 1.5374 to 1.4470).
·Australian Dollar – 0.6750
Initial support at 0.6628 (Jan 16 low) followed by the 0.6538 (Jan 15 low). Initial resistance is now at 0.6820 (Jan 15 high) followed by 0.7042 (Jan 12 high).
·Gold – 843
Initial support at 816 (Jan 16 low) followed by 802 (Jan 15 low). Initial resistance is now at 857 (Jan 12 high) followed by 870 (Jan 6 high).
