US GDP beats estimates, Recovery Continues
CURRENCY TRADING SUMMARY – 3rd November 2008 (00:30GMT)
·U.S. Dollar Trading (USD) weakness in Asian stocks sent the USD to day highs as traders pared riskier trades going into the weekend. US stocks shrugged off the negative lead ending the week on a high note. US September Consumer PCE index rose 0.2% vs. 0.1% expected. Chicago PMI further deteriorated in October to 37.8 vs. 48.5 forecast. In the U.S. share markets, the NASDAQ was up 22 points (1.32%) and the Dow Jones was up 144 points (1.57%). Crude Oil closed up $1.85 ending the New York session at $67.80 per barrel. Looking ahead, September Construction Spending forecast at -0.8% vs. 0.0% previously. October PMI Manufacturing 41.8 vs. 43.5.
·The Euro (EUR) broke below 1.28 going into Europe as Asian stocks experienced a sharp sell off towards the end of their session. Support was found sub 1.27 and the pair traded in a tight range for the rest of the day. Also weighing on the pair was dismal German Retail sales (-2.3%) and increasing rate cut speculation. Overall the EUR/USD traded with a low of 1.2665 and a high of 1.2921 before closing the day at 1.2720 in the New York session. Looking ahead, October PMI manufacturing is expected at 41.3 vs. 45 previously.
·The Japanese Yen (JPY) was one of the biggest movers yesterday initially hovering just below the 99 level the market was surprised by the Bank of Japan cutting rates to 0.3% vs. 0.5% previously. The Market was expecting a 0.25% cut and was rattled by the 4-4 split decision. The Nikkei plunged 500 points into the close and left the markets extremely cautious going into Europe and the Yen well supported as risk aversion spiked. When Europe didn’t capitulate and US recovered the Yen pared gains going into the weekend. Overall the USDJPY traded with a low of 96.35 and a high of 99.13 before closing the day around 98.40 in the New York session.
·The Sterling (GBP) gravitated towards the 1.600 level as risk aversion resurfaced but the level held and subsequent US stock rally led to a mild recovery going into the weekend. Markets are continued to focus on the Bank of England rate announcement this week where they expect aggressive easing. Overall the GDP/USD traded with a low of 1.6006 and a high of 1.6415 before closing the day at 1.6075 in the New York session.
·The Australian Dollar (AUD) continued to be pushed around by market sentiment initially well supported until the Nikkei Plunge took the legs from underneath the recovery and sent the pair to day lows. AUD/JPY selling was the catalyst for the move lower. US stocks helped the pair off lows. Overall the AUD/USD traded with a low of 0.6545 and a high of 0.6768 before closing the US session at 0.6675. Looking ahead, September Retail Sales are expected -0.5% vs.0.6% previously.
·Gold (XAU) fell as the USD strengthened and safe havens flows eased. Overall trading with a low of USD$720.40 and high of USD$740.50 before ending the New York session at USD$724 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2558 |
1.2626 |
1.2765 |
1.2924 |
1.3299 |
|
USD/JPY |
94.28 |
96.08 |
98.45 |
99.13 |
99.71 |
|
GBP/USD |
1.5804 |
1.5970 |
1.6100 |
1.6486 |
1.6672 |
|
AUD/USD |
0.6338 |
0.6550 |
0.6720 |
0.6825 |
0.6893 |
|
XAU/USD |
707.50 |
718.88 |
728.00 |
742.25 |
777.50 |
·Euro – 1.2765
Initial support at 1.2626 (Oct 29 low) followed by 1.2558 (76.4% retrace 1.2329 to 1.3298). Initial resistance is now located at 1.2924 (Oct 31 high) at followed by 1.3299 (38.2% retrace 1.4867 to 1.2329 and Oct 30 high).
·Yen – 98.45
Initial support is located at 96.08 (Oct 29 low) followed by 94.28 (61.8^% retrace 90.92 to 99.71). Initial resistance is now at 99.13 (Oct 30 high) followed by 99.71 (Oct 29 high).
·Pound – 1.6100
Initial support at 1.5970 (50% retrace 1.5267 to 1.6672) followed by 1.5804 (61.8% retrace 1.5267 to 1.6672). Initial resistance is now at 1.6486 (Oct 31 high) followed by 1.6672 (Oct 30 High).
·Australian Dollar – 0.6720
Initial support at 0.6555 (Oct 31 low) followed by the 0.6338 (Oct 29 low). Initial resistance is now at 0.6825 (Oct 31 high) followed by 0.6893 (Oct 30 high).
·Gold – 728
Initial support at 718 (61.8% retrace 777.90-682.41) followed by 707 (Oct 27 low). Initial resistance is now at 742.25 (Oct 31 high) followed by 777.5 (Oct 30 Level).
