Obama Bank Plans Create Havoc
CURRENCY TRADING SUMMARY –22nd January (00:30GMT)
U.S. Dollar Trading (USD) Gained against risk currencies as stocks crashed but was very volatile against the EUR/USD and USD/JPY as the market digested Obama’s Bank regulation plan. The plans seek to limit the size and risk of Banks so as to make sure none are ‘too big to fail’. Weekly Jobless claims were 482k vs. 440k forecast. DJIA -213 points closing at 10603, S& P -12 points closing at 1138 and NASDAQ -29 points closing at 2291.
The Euro (EUR) broke through to fresh 5 month lows as risk aversion spiked higher and EUR/JPY selling pushed the major lower. Obama’s Bank Plan was taken as USD negative by the market and the EUR/USD reclaimed the 1.4100 level. Helping the rebound was EUR/GBP buying which pared recent heavy losses. Overall the EUR/USD traded with a low of 1.4026 and a high of 1.4145 before closing at 1.4090. Looking ahead, November Industrial Orders forecast at 0.5% vs. -2.2% previously.
The Japanese Yen (JPY) gained strength across the board as risk aversion and USD weakness provided the perfect storm. USD/JPY traded at 1 month lows near the key Y90 level. AUD/JPY fell over 2 yen and EUR/JPY nears 9 month lows at Y127. Overall the USDJPY traded with a low of 89.85 and a high of 91.89 before closing the day around 90.30 in the New York session.
The Sterling (GBP) broke down on aggressive selling in Europe before bouncing around the 1.6200 level. GBP/JPY came under heavy selling pressure as stocks dropped and could hurt threaten the recent cable rally. January CBI Order Expectations forecast at -39 vs. -39 previously. Overall the GBP/USD traded with a low of 1.6123 and a high of 1.6314 before closing the day at 1.6200 in the New York session. Looking ahead, December Retail Sales are forecast at 1.1% vs. -0.3% previously.
The Australian Dollar (AUD) gained strength briefly in Asia as Chinese GDP came in strong as expected but this proved short lived as speculation of tightening Chinese Monetary Policy limited gains. Stock losses in the US added to the downside pressure and the key 0.9000 level has come back into view. Overall the AUD/USD traded with a low of 0.8991 and a high of 0.9148 before closing the US session at 0.9020. Q4 Export Prices fell -1.7% vs. -3% forecast.
Oil & Gold (XAU) slumped through $1100 support and came under heavy selling pressure as large stops were hit. Overall trading with a low of USD$1088 and high of USD$1118 before ending the New York session at USD$1118 an ounce. Crude Oil continued to be pressured lower in the risk off environment. Crude Oil was down -$0.77 ending the New York session at $77.00.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3964 |
1.4008 |
1.4100 |
1.4218 |
1.4414 |
|
USD/JPY |
89.29 |
90.00 |
90.05 |
91.87 |
92.05 |
|
GBP/USD |
1.6038 |
1.6126 |
1.6180 |
1.6312 |
1.6372 |
|
AUD/USD |
0.8902 |
0.8939 |
0.9000 |
0.9240 |
0.9280 |
|
XAU/USD |
1086.00 |
1088 |
1095.00 |
1141 |
1146.00 |
|
OIL/USD |
74.00 |
75.00 |
77.00 |
78.00 |
80.00 |
Euro – 1.4100
Initial support at 1.4008 (Jul 29 low) followed by 1.3964 (Jul 15 low). Initial resistance is now located at 1.4218 (Dec 22 high) followed by 1.4414 (Jan 19 high)
Yen – 90.05
Initial support is located at 90.00 (Big figure support) followed by 89.30 (50% retracement of 84.86 – 93.75). Initial resistance is now at 91.87 (Jan 21 high) followed by 92.05 (Jan 14 high).
Pound – 1.6180
Initial support at 1.6126 (Jan 21 low) followed by 1.6137 (Jan 13 low). Initial resistance is now at 1.6312 (Jan 21 high) followed by 1.6372 (Jan 20 high).
Australian Dollar – 0.9000
Initial support at 0.8939 (Jan 21 low) followed by the 0.8902 (Dec 30 low). Initial resistance is now at 0.9243 (Jan 20 high) followed by 0.9280 (Jan 18 high).
Gold – 1095
Initial support at 1088 (Jan 21 low) followed by 1086 (Dec 30 low). Initial resistance is now at 1141 (Jan 20 high) followed by 1146 (Jan 14 high).
Oil – 77.00
Initial support at 75.00 (Intraday support) followed by 74.00 (Intraday Support). Initial resistance is now at 78.00 (Intraday Resistance) followed by 80.00 (Intraday Resistance).
