US Unemployment Rate Improves
Last week’s currency trading review
The Dollar gained again this week but not because of risk aversion as with the Dubai debt crisis but as traders increased bets the Fed will increase rates sooner than expected. USD/JPY was the major gainer as the alternate carry currency was sold aggressively against all others. US Non Farm Payrolls were -11k vs. -130k forecast. The Unemployment Rate fell from 10.2% to 10.0% in November. ISM Manufacturing PMI fell to 53.6 vs. 55.7 previously. The Euro struggled to break above year highs at 1.5140 even as ECB president Trichet was quite hawkish in the press conference following the ECB rate meeting where they kept rates at 1.0%. The pair broke 1.5000 and fell quickly to the low 1.48 region after the US data on Friday. The EUR/USD fell -0.91% closing at 1.4856, after opening the week at 1.4986.
The Japanese Yen was under pressure all week as the BOJ held a special meeting and Government official’s condemned the recent rise in the Yen. Also helping the Yen to weaken was the multi day rally in the Nikkei that closed above 10000. Losses against the USD accelerated on Friday after the Non Farm data as US interest rate expectations changing sharply. The USD/JPY gained 4.37% closing at 90.42 after opening the week at 86.47. The GBP was relatively quiet spending the week in a 1.64-1.67 range but ended higher against the Euro and JPY. Nationwide House Prices showed a continued rebound in UK housing up 0.5% in November. GBP/USD fell -0.24% closing at 1.6448 after opening at 1.6488. The AUD ended slightly higher in volatile trade as the RBA raised rates by 0.25% to 3.75% and Gold crashed on Friday. AUD/JPY was the best performing currency last week up +5.35% as the two countries interest rate outlook diverged. The AUD/USD gained 0.92% closing at 0.9145 after opening at 0.9061.
The forex trading week preview
In the States On Monday, Fed Chief Bernanke Speaks. On Thursday, October Trade Balance is forecast at -37.1bn vs. -36.5bn previously. Weekly Jobless Claims forecast at 470k vs. 457k previously. On Friday, November Retail Sales are forecast at 0.6% vs. 1.4% previously. Also released, UoM forecast at 68.8 vs. 67.4 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday, ECB President Trichet Speaks. On Tuesday, October Industrial forecast at 1.0% vs. 2.7% previously. On Wednesday, November German CPI is forecast at 0.3% y/y. On Thursday, Swiss Rate announcement forecast to remain at 0.25%. On Friday, Trichet Speaks once again. In the UK On Tuesday, October Industrial Production is forecast at -7.7% vs. -10.30% previously y/y. Also released, October Manufacturing forecast at -7.2% vs. -9.3% previously. On Wednesday, October Trade Balance forecast at -6.8bn vs. -7.1bn previously. On Thursday, BOE rate announcement forecast to remain at 0.5% with the Asset Purchase facility remaining at 200bn Pounds. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Wednesday, Q3 GDP forecast 0.7% vs. 1.2% previously. On Friday, October Machine Orders forecast at -21% vs. -22% y/y. In Australia On Tuesday, RBA Governor Stevens speaks. On Thursday, RBNZ forecast to keep New Zealand rates at 2.5%. Also released, Australian November Employment change forecast at 5k vs. 24k previously. November Unemployment rate forecast at 5.9% vs. 5.8% previously. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4802 |
1.4822 |
1.4875 |
1.5144 |
1.5163 |
|
USD/JPY |
86.59 |
87.32 |
90.10 |
90.77 |
91.32 |
|
GBP/USD |
1.6273 |
1.6381 |
1.6475 |
1.6722 |
1.6746 |
|
AUD/USD |
0.8947 |
0.9097 |
0.9145 |
0.9323 |
0.9406 |
|
XAU/USD |
1138.00 |
1148 |
1158.00 |
1226.00 |
1250.00 |
|
OIL/USD |
74.50 |
75.00 |
75.80 |
77.00 |
78.00 |
Euro – 1.4875
Initial support at 1.4822 (Dec 4 low) followed by 1.4802 (Nov 20 low). Initial resistance is now located at 1.5144 (Nov 25 high) followed by 1.5163 (0.764 of 1.6038-1.2330)
Yen – 90.10
Initial support is located at 87.32 (Dec 3 low) followed by 86.59 (Dec 2 low). Initial resistance is now at 90.77 (Dec 4 high) followed by 91.32 (Nov 4 High).
Pound – 1.6475
Initial support at 1.6381 (Nov 30 low) followed by 1.6273 (Nov 27 low). Initial resistance is now at 1.6722 (Dec 3 high ) followed by 1.6746 (Nov 25 high).
Australian Dollar – 0.9145
Initial support at 0.9097 (Nov 30 low) followed by the 0.8947 (Nov 30 low). Initial resistance is now at 0.9323 (Nov 25 high) followed by 0.9406 (Nov 16 high).
Gold – 1158
Initial support at 1148 (Dec 4 former high) followed by 1138 (Nov 27 low). Initial resistance is now at 1226 (Dec 3 high) followed by 1250 (Key level).
Oil – 75.80
Initial support at 75.00 (Intraday support) followed by 74.50 (Intraday support). Initial resistance is now at 78 (intraday resistance) followed by 80 (Year highs).
