Fed Unveils $800B Consumer Loan Program
CURRENCY TRADING SUMMARY – 26th November 2008 (00:30GMT)
·U.S. Dollar Trading (USD) came under pressure after details emerged of a new FED program that will buy $800 billion in GSE mortgage backed debt and offer another $200 Billion in a new program designed to offer support to the consumer loan backed asset market. US shares reacted well and shrugged off the Q3 GDP numbers of -0.5%. Also released Consumer Confidence in November rose to 44.9 vs. 38 expected. In U.S. share markets, the NASDAQ was down 7 points (0.5%) and the Dow Jones was up 36 points (0.43%). Crude Oil closed down $3.73 ending the New York session at $50.77 per barrel. Looking ahead, October Durable Goods Orders are expected at -3% vs. +0.9% last month. Also released, October New Homes Sales expected to fall to 445K vs. 464K previously.
·The Euro (EUR) staged an aggressive rally on the back of USD selling after the new Fed plan was released. When the stock rally stalled EUR/JPY selling started to weigh on the single currency but still managed to close above 1.30. German GDP was confirmed at -0.5% in Q3 and Consumer Confidence beat expectations at 2.2 vs. 1.5 forecast. Overall the EUR/USD traded with a low of 1.2805 and a high of 1.3081 before closing the day at 1.3060.
·The Japanese Yen (JPY) had a mixed day gaining against the USD but losing ground against the EURO and GBP as there respective majors gained heavily. AUD/JPY also underperformed falling heavily from highs early in the day as commodities fell and equities stalled. Overall the USDJPY traded with a low of 94.96 and a high of 96.92 before closing the day around 95.20 in the New York session.
·The Sterling (GBP) extended the recovery envelope even after BoE’s King had very dovish things to day about the UK economy. King’s comment included the possibility of a severe recession looming in the UK. 1.5000 was tested before USD weakness lead to a massive rally up to 1.5500 highs. Overall the GDP/USD traded with a low of 1.4985 and a high of 1.5535 before closing the day at 1.5480 in the New York session.
·The Australian Dollar (AUD) rally came unstuck as selling above 65 emerged early in the Asian session. Less than expected gains from Asian equities pressure the AUD/JPY lower but as the EURO and GBP surged the AUD/USD got a second wind and 0.6600 was scaled for a brief moment before falling back to .6450 supports. Overall the AUD/USD traded with a low of 0.6333 and a high of 0.6617 before closing the US session at 0.6510.
·Gold (XAU) continued to be well supported although heavy falls in Oil kept gains into the $800’s limited. Overall trading with a low of USD$803 and high of USD$831 before ending the New York session at USD$821 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2568 |
1.2804 |
1.3020 |
1.3081 |
1.3116 |
|
USD/JPY |
93.62 |
94.94 |
95.00 |
97.43 |
97.55 |
|
GBP/USD |
1.1484 |
1.4984 |
1.5400 |
1.5500 |
1.5535 |
|
AUD/USD |
0.6232 |
0.6298 |
0.6465 |
0.6618 |
0.6696 |
|
XAU/USD |
743.00 |
786.00 |
813.00 |
856.59 |
871.00 |
·Euro – 1.3020
Initial support at 1.2804 (Nov 25 low) followed by 1.2568 (Nov 24 low). Initial resistance is now located at 1.3081 (Nov 25 low) at followed by 1.3116 (Nov 5 high)
·Yen – 95.00
Initial support is located at 94.94 (Nov 24 low) followed by 93.62 (Nov 20 low). Initial resistance is now at 97.43 (Nov 25 high) followed by 97.55 (Nov 17 high).
·Pound – 1.5400
Initial support at 1.4984 (Nov 25 low) followed by 1.4841 (Nov 24 low). Initial resistance is now at 1.5500 (Key level) followed by 1.5535 (Nov 25 high).
·Australian Dollar – 0.6465
Initial support at 0.6298 (76.4% retrace 0.7015 to 0.6076) followed by the 0.6232 (Nov 24 low). Initial resistance is now at 0.6618 (Nov 25 high) followed by 0.6696 (Nov 14 high).
·Gold – 813
Initial support at 786 (Nov 24 low) followed by 743 (Nov 21 low). Initial resistance is now at 856 (Oct 15 high) followed by 871 (Oct 13).
