Market Party over as bad news continues
12/01/09
last week’s currency trading review
The Dollar had a mixed trading weak gaining against the Euro but falling against the Pound and Yen as the markets recent rally topped out and the downside came back into view. Wednesday’s ADP employment report for December at -700K accelerated the selling pressure which remained into the weekend. The big data release was the Non Farm payrolls which at -525K were not as bad as some feared and allowed the USD to gain as stocks fell. The December Unemployment rate jumped to 7.2% its highest level in 15 years. The Euro lost ground against most currencies as the market factored in more rate cuts to come and worsening economic data blackened the outlook. German Industrial Production remained weak at -3.1% in November. EUR/GBP and EUR/JPY suffered major reversals. The EUR/USD lost -3.39% closing at 1.3463, after opening the week at 1.3919. The Japanese Yen gained heavily as sentiment reversed and the Christmas rally was sold. USD/JPY slumped back to 90 and dragged most of the crosses lower. The USD/JPY fell -1.62% closing at 90.35 after opening at 91.81. The GBP had an extremely volatile week gaining after the Bank of England cut rates by 0.50% to reclaim the 1.500 level and surged to highs above 1.53 before settling back as GBP/JPY selling capped the rally. The GBP/USD gained 4.06% closing at 1.5159 after opening at 1.4544. The AUD was one of the worst hit currencies as sentiment changed and risk aversion came back into the market. Commodities made a dramatic turnaround lead by Oil which fell over 10% in the week. AUD/JPY fell over 10% as well. The AUD/USD closed down -3.83% at 0.7030 after opening at 0.6771.
The forex trading week preview
In the States On Tuesday we have the November Trade Balance forecast at -52Bn vs. -57Bn previously. On Wednesday we have Advanced Retail sales for December forecast at -1.2% VS. -1.8%. Also released Wednesday the Fed Beige Book. On Thursday Weekly Jobless Claims are expected at 520K vs. 467K. December PPI is expected down -2.0% vs. -2.2% previously. Also released the Philly Fed seen at -35.0 in January. On Friday the December CPI is forecast at -0.1% Y/Y vs. 1.1% previously. Also on Friday the January University of Michigan Confidence is forecast at 59 vs. 60.1 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Wednesday German GDP is released with a Y/Y rate forecast 1.4% vs. 2.5% previously. Also on Wednesday the Eurozone Industrial Production is forecast at -1.9% vs. -1.2%. On Thursday German December CPI is at 1.1% and Eurozone is forecast at 1.6%. On especially large importance the ECB Meeting on Thursday where the market expects a 0.5% cut to 2.0%. Special attention will be paid to the post decision press conference. On Friday the Eurozone November Trade Balance is released previously at -1.3Bn In the UK light data week with Wednesday the highlight, November Trade Balance Forecast at -7.5Bn vs. -7.75Bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan light data week with the Nov Machine Orders on Thursday forecast at -8.0% vs. -4.4%. We will provide our previews and reviews of these data releases in the daily summary.
In Australia Australian Unemployment is the highlight on Thursday with expectations of -20K and a rise to 4.5% unemployment rate from 4.4%. We will provide our previews and reviews of these data releases in the daily summary.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3241 |
1.3312 |
1.3470 |
1.3752 |
1.3799 |
|
USD/JPY |
89.08 |
90.01 |
90.05 |
91.67 |
92.92 |
|
GBP/USD |
1.4984 |
1.5117 |
1.5125 |
1.5374 |
1.5616 |
|
AUD/USD |
0.6919 |
0.6957 |
0.6990 |
0.7142 |
0.7269 |
|
XAU/USD |
830.00 |
836.70 |
855.00 |
870.00 |
884.00 |
·Euro – 1.3470
Initial support at 1.3312 (Jan 6 low) followed by 1.3241 (0.618 of 1.2337-1.4719). Initial resistance is now located at 1.3752 (Jan 9 high) at followed by 1.3799 (Jan 8 high)
·Yen – 90.05
Initial support is located at 90.01 (61.8% retrace 87.14 to 94.64) followed by 89.08 (Dec 22 low). Initial resistance is now at 91.67 (Jan 9 high) followed by 92.92 (Jan 8 high).
·Pound – 1.5125
Initial support at 1.5117 (Jan 9 low) followed by 1.4984 (Jan 8 low). Initial resistance is now at 1.5374 (Jan 8 high) followed by 1.5616 (Dec 18 high).
·Australian Dollar – 0.6990
Initial support at 0.6957 (Jan 8 low) followed by the 0.6919 (Jan 2 low). Initial resistance is now at 0.7142 (Jan 8 high) followed by 0.7269 (Jan7 high).
·Gold – 855
Initial support at 836 (Jan 8 low) followed by 830 (Dec 19 low). Initial resistance is now at 870 (Jan 6 high) followed by 884 (Jan 5 high).
