UK Economy slips in recession
CURRENCY TRADING SUMMARY – 26th January 2009 (00:30GMT)
·U.S. Dollar Trading (USD) with little data out Friday the US market took its lead from Europe which was under pressure as the UK reported slumping GDP for Q4. The Dow tested 8000 for the 4th day before ending the week above the key level. The USD was mixed with a large rally in commodities helping to cap strength. Crude Oil closed up $2.80 ending the New York session at $46.47 per barrel. In US share markets, the Dow Jones dropped -45 points or -0.56% and the NASDAQ gained 4.45 points or 0.81%. Looking ahead, December existing home sales are forecast to drop to 4.4m vs. 4.49 previously.
·The Euro (EUR) fell in sympathy with the Pound which was under pressure after the GDP data. The support at 1.2800 proved solid and as stocks came off lows so did the Euro which along with Oil surged into the close. Eurozone Data was slightly better than expected with Manufacturing PMI jumping 34.5 vs. 33.9 and Services PMI at 43.5 vs. 42.1 previously. Overall the EUR/USD traded with a low of 1.2765 and a high of 1.3028 before closing the day at 1.2978.
·The Japanese Yen (JPY) heavy GBP/JPY selling saw new record lows which dragged down the other crosses as stocks were under pressure in Europe. A strong recovery was seen in New York lead by the EUR/JPY which surged 3 big figures into the US close. Overall the USDJPY traded with a low of 88.08 and a high of 89.54 before closing the day around 88.90 in the New York session.
·The Sterling (GBP) came under severe pressure as Q4 GDP fell more than expected at -1.5% vs. -1.2%. The data confirmed the UK was in recession. 1.3500 was tested before support was found and a recovery into the weekend was staged. UK December Retail Sales gained 1.6% vs. -0.7% forecast but is a volatile number over Christmas. Overall the GDP/USD traded with a low of 1.3505 and a high of 1.3882 before closing the day at 1.3770 in the New York session.
·The Australian Dollar (AUD) came under pressure tracking the majors lower in Europe before the Commodity rally underpinned a bounce into the close. The AUD is on a soft footing with low risk appetite and a deteriorating economic outlook weighing. Overall the AUD/USD traded with a low of 0.6419 and a high of 0.6587 before closing the US session at 0.6547.
·Gold (XAU) broke the recent range to the topside, dragged higher as Oil rallied and US 30 year Treasuries dropped the most in 20 years over the week. Overall trading with a low of USD$852 and high of USD$903 before ending the New York session at USD$889 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2628 |
1.2715 |
1.2915 |
1.3104 |
1.3387 |
|
USD/JPY |
87.13 |
87.99 |
89.05 |
90.16 |
91.67 |
|
GBP/USD |
1.3031 |
1.3500 |
1.3650 |
1.3902 |
1.4024 |
|
AUD/USD |
0.6294 |
0.6419 |
0.6530 |
0.6569 |
0.6684 |
|
XAU/USD |
824.00 |
843.96 |
892.00 |
903.00 |
931.00 |
·Euro – 1.2915
Initial support at 1.2715 (Dec 8 low) followed by 1.2628 (Dec 5 low). Initial resistance is now located at 1.3104 (Jan 20 high) at followed by 1.3387 (Jan 19 high)
·Yen – 89.05
Initial support is located at 87.99 (Jan 23 low) followed by 87.13 (Projected downside target). Initial resistance is now at 90.16 (Jan 21 high) followed by 91.67 (Jan 9 high).
·Pound – 1.3650
Initial support at 1.3500 (Key level) followed by 1.3031 (Projection). Initial resistance is now at 1.3902 (Jan 23 high) followed by 1.4024 (Jan 21 high).
·Australian Dollar – 0.6530
Initial support at 0.6419 (Jan 23 low) followed by the 0.6294 (Dec 5 low). Initial resistance is now at 0.6569 (Jan 23 high) followed by 0.6684 (Jan 20 high).
·Gold – 892
Initial support at 843 (Jan 21 low) followed by 824 (Jan 20 low). Initial resistance is now at 903 (Dec 29 high) followed by 931 (Oct 10 high).
