ISM manufacturing rises above 50 level. FOMC minutes slightly dovish. Commodities sold off while US dollar strengthens.
CURRENCY TRADING SUMMARY –4 JANUARY 07 (23:30GMT)
- U.S. Dollar Trading (USD) recovered lost ground against the majors in the overnight foreign exchange trading session as strong ISM manufacturing data negated negative releases overnight. ADP payrolls report came in at -40k from an estimated 128k. ISM manufacturing came in at 51.4, reversing a sub-50 level reading of 49.5 in the previous month and beating expectations of 49.9 by analysts. Gains in the USD were capped after the release of the FOMC minutes from the Dec 12 meeting of the Federal Reserve which stated that the downside risk to growth had increased and that the housing slowdown does not seem to have spilled over significantly into consumer spending. In other markets, the Dow Jones index rose 11pts and the NASDAQ climbed 7pts as markets absorbed the economic data releases from overnight. Crude oil fell US$2.67 to US$58.30 a barrel as mild
US - The Euro (EUR) traded within a low of 1.3148 and a high of 1.3289, before closing at 1.3163 in the
New York Germany - The Japanese Yen (JPY) traded within a low of 118.69 and a high of 119.67 versus the dollar, before closing at 119.36 in the
New York - The Sterling (GBP) traded within a low of 1.9484 and a high of 1.9749, before closing at 1.9504 in the
New York - The Australian Dollar (AUD) traded within a low of 0.7907 and a high of 0.7980, before closing at 0.7939 in the
New York - Gold (XAU) fell by US$8.20 to US$629.80 an ounce in response to a stronger US dollar and weaker oil price.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3110 | 1.3146 | 1.3165 | 1.3298 | 1.3368 |
| USD/JPY | 118.28 | 118.49 | 119.35 | 119.70 | 119.90 |
| GBP/USD | 1.9340 | 1.9434 | 1.9510 | 1.9753 | 1.9849 |
| AUD/USD | 0.7808 | 0.7886 | 0.7910 | 0.7990 | 0.8005 |
| XAU/USD | 624.71 | 625.38 | 628.00 | 645.50 | 650.20 |
- Euro 1.3165
Initial support at 1.3146 (61.8% retracement of the 1.3052 to 1.3298 advance) followed by 1.311 (76.4% retracement of the 1.3052 to 1.3298 advance). Initial resistance is now located at 1.3298 (Jan 2 high) followed by 1.3368 (Dec 4, 2006 trend high).
- Yen 119.35
Initial support is located at 118.49 (Jan 2 corrective low) followed by 118.28 (Dec 27, 2006 corrective low). Initial resistance is now at 119.7 (Jan 3 high) followed by 119.9 (Oct 13, 2006 reaction high).
- Pound – 1.9510
Initial support at 1.9434 (Dec 18, 2006 reaction low) followed by 1.934 (38.2% retracement of the 1.8516 to 1.9849 advance). Initial resistance is now at 1.9753 (Jan 3 high) followed by 1.9849 (Dec 1, 2006 trend high).
- Australian Dollar – 0.7910
Initial support at 0.7886 (Jan 2 low) followed by 0.7808 (Dec 27, 2006 corrective low). Initial resistance is now at 0.799 (Mar 8, 2005 reaction high) followed by 0.8005 (Feb 18, 2005 reaction high).
- Gold – 628
Initial support at 625.38 (Jan 3 low) followed by 624.71 (61.8% retracement of the 612.17 to 645.00 advance). Initial resistance is now at 645.5 (Key trend-line resistance) followed by 650.2 (Dec 1, 2006 reaction high).
