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CURRENCY TRADING SUMMARY –02 NOVEMBER 2007 (00:30GMT)
·U.S. Dollar Trading (USD) rebounded against a number of currencies as investors took a risk aversion approach to the market. A sharp plunge in stock prices prompted investors to unwind risky trades on a rebounding Japanese yen, relieving the USD against a number of currencies. Many of the moves were prompted by another two earnings downgrade by Citigroup, pushing share prices lower by 6.6%. In other data news, releases were mixed on Thursday, with positive readings in Durable Goods, whilst ISM manufacturing failed to provide any further support coming in softer than expected at 50.9, it lowest level since March. In
·The Euro (EUR) eased from it previous days record highs of 1.4504 throughout the session as the dollar was reprieved in a risk aversion led market. Overall the EURUSD traded with a low of 1.4404 and a high of 1.4485 before closing the session at 1.4460.
·The Japanese Yen (JPY) was the best performing currency on Thursday following an unwinding of high yielding carry trades, as the Bank of America and Citigroup renewed concerns that credit market losses will spread further. The Japanese Yen was able to gain 0.7% against the Euro with a low of 166.10, whilst other high yielding commodity bloc currencies such as the AUD and NZD fell 2% and 1% respectively weighed upon by a rebounding Japanese Yen. Overall the USDJPY traded with a low of 114.47 and a high of 115.92 before closing the day at 114.89 in the
·The Sterling (GBP) rose to 26 year high against the dollar as traders increased expectations that the Bank of England would hold off cutting interest rates before 2008, as Central Bank officials indicating that inflationary pressures remained in the
·The Australian Dollar (AUD) was one of the worst performing currencies on Thursday, as investors fled high yielding carry trades. Although Retail Sales figures for the month of September came in significantly higher than expectation at 0.8%, a plunge in global stocks ensured the AUD was unable to sustain its week’s gains above 93 cents, falling almost 2% on the session. Overall the AUDUSD traded with a high of 0.9336 before falling to 0.9140 and ending the session at 0.9179 in
·Gold (XAU) fell from the highest price since 1980 as the dollar rebounded, reducing the appeal of the precious metal as an alternative investment. XAU traded with a low of 784.70 and a high of 799.30.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.4316 | 1.4371 | 1.4425 | 1.4516 | 1.4530 |
| USD/JPY | 113.78 | 114.39 | 114.45 | 115.93 | 116.64 |
| GBP/USD | 2.0481 | 2.0752 | 2.0780 | 2.0875 | 2.1000 |
| AUD/USD | 0.9010 | 0.9076 | 0.9150 | 0.9344 | 0.9446 |
| XAU/USD | 762.00 | 769.80 | 790.20 | 799.40 | 800.00 |
·Euro 1.4425
Initial support at 1.4371 (Oct 30 low) followed by 1.4316 (Oct 26 low). Initial resistance is now located at 1.4516 (Apr 1995 synthetic high) followed by 1.4530 (March 1995 synthetic high)
·Yen 114.45
Initial support is located at 114.39 (Oct 30 low) followed by 113.78 (Oct 25 low). Initial resistance is now at 115.93 (Nov 1 high) followed by 116.64 (Oct 17 high).
- Pound – 2.0780
Initial support at 2.0752 (Nov 1 low) followed by 2.0481 (Oct 26 low). Initial resistance is now at 2.0875 (Nov 1 high) followed by 2.1000 (Psychological round number)
- Australian Dollar – 0.9150
Initial support a 0.9076 (Oct 26 low) followed by 0.9010 (Oct 25 low). Initial resistance is now at 0.9344 (Oct 31 high) followed by 0.9446 (0.9143 plus 0.8747 – 0.9050).
- Gold – 790.20
Initial support at 769.80 (Oct 26 low) followed by 762.00 (Oct 25 low). Initial resistance is now at 799.40 (Nov 1 high) followed by 800.00 (Round number resistance)
