FED remains Dovish, USD Weak
CURRENCY TRADING SUMMARY – 5th November (00:30GMT)
U.S. Dollar Trading (USD) was on the back foot as stocks rallied around the world and the Federal Reserve left rates at 0.25% and stating that rates would remain low for an extended period of time. ADP October Employment Report was -203k vs. -188k previously. Also released, ISM Services forecast at 50.6 vs. 51.6 forecast. In US Stocks, DJIA +30 points closing at 9802, S& P +1 points closing at 1046 and NASDAQ -2 points closing at 2055. Looking ahead, Weekly Jobless Claims are forecast at 523k vs. 530k previously.
The Euro (EUR) rallied for most of the day on continued strength in commodities and a rebound in stocks. September PPI was as forecast at -0.4%. EUR/JPY enjoyed solid gains although a late sell off in stocks induced profit taking. Overall the EUR/USD traded with a low of 1.4701 and a high of 1.4911 before closing at 1.4880. Looking ahead, ECB rate announcement forecast to remain at 1.0%.
The Japanese Yen (JPY) was very weak as the crosses began to rally and technical’s turned against the Yen. USD/JPY struggled to hold above 91 Yen on a mixed response to the FOMC but remains supported on dips. EUR/JPY returned to the 135 figure. Overall the USDJPY traded with a low of 90.03 and a high of 91.34 before closing the day around 90.80 in the New York session.
The Sterling (GBP) rallied above 1.6500 on improved risk appetite and strong GBP/JPY buying. October PMI Services was 56.9 vs. 55.4 previously. 1.6600 capped the topside but the market is well supported ahead of today’s BoE meeting. Overall the GBP/USD traded with a low of 1.6600 and a high of 1.6399 before closing the day at 1.6550 in the New York session. Looking ahead, BoE Rate meeting. Also released, September Industrial Production forecast at 1% vs. -2.5% previously.
The Australian Dollar (AUD) was dented in Asia from poor September Retail Sales of -0.2% vs. +0.4% forecast. The dip below 0.9000 proved short lived and when the market continued to push higher the Aussie rebounded. AUD/JPY enjoyed the Yen weakness combined with the ongoing rally in gold. Overall the AUD/USD traded with a low of 0.8970 and a high of 0.9146 before closing the US session at 0.9105. Looking ahead, September Trade Balance forecast at -2100mln vs. -1524mln previously.
Oil & Gold (XAU) continued to push higher on yesterdays momentum nearing the $1100 level. Overall trading with a low of USD$1079 and high of USD$1098 before ending the New York session at USD$1092 an ounce. Broke above $80 a barrel as the rally accelerated. Crude Oil was up $0.80 ending the New York session at $80.40.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4581 |
1.4626 |
1.4875 |
1.4909 |
1.4927 |
|
USD/JPY |
89.20 |
89.87 |
90.80 |
91.62 |
92.32 |
|
GBP/USD |
1.6126 |
1.6241 |
1.6560 |
1.6604 |
1.6693 |
|
AUD/USD |
0.8866 |
0.8907 |
0.9100 |
0.9144 |
0.9218 |
|
XAU/USD |
1035.00 |
1055 |
1091.00 |
1100.00 |
1114.00 |
|
OIL/USD |
78.00 |
78.50 |
80.40 |
81.00 |
82.00 |
Euro – 1.4875
Initial support at 1.4626 (Nov 3 low) followed by 1.4581 (Oct 5 low). Initial resistance is now located at 1.4909 (Nov 4 high) followed by 1.4927 (Oct 27 high)
Yen – 90.80
Initial support is located at 89.87 (Nov 3 low) followed by 89.20 (Oct 14 low). Initial resistance is now at 91.62 (Oct 29 high) followed by 92.32 (Oct 27 high).
Pound – 1.6560
Initial support at 1.6241 (Oct 19 low) followed by 1.6141(Sept 30 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).
Australian Dollar – 0.9100
Initial support at 0.8907 (Nov 2 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9144 (Nov 4 high) followed by 0.9218 (Oct 27 high).
Gold – 1091
Initial support at 1055 (Nov 3 low) followed by 1035 (Oct 30 high). Initial resistance is now at 1100 (Key level ) followed by 1114 (1.382 of 930.34 to 1024.28 from 985).
Oil – 80.40
Initial support at 78.5 (Intraday Support) followed by 78.0 (Intraday support). Initial resistance is now at 81 (Nov 5 high) followed by 82 (October High).
