European Stocks and Currencies Rebound
CURRENCY TRADING SUMMARY – 27th January 2009 (00:30GMT)
·U.S. Dollar Trading (USD) weakened across the board as sentiment shifted in Europe and stocks rallied. The USD had received support from safe haven flows during the past 2 weeks so always had the potential to pare back those gains if the mood changed. Helping shift sentiment in the markets was better than expected results from Barclays Bank and US housing Data. December Existing Home Sales rose to 4.74m vs. 4.49m previously. Crude Oil closed down -$0.74 ending the New York session at $45.73 per barrel. In US share markets, the Dow Jones gained 38 points or 0.48% and the NASDAQ gained 12 points or 0.82%. Looking ahead, Consumer Confidence for January is expected at 39 vs. 38. Also Released, January Richmond Fed Index previously at -55.
·The Euro (EUR) surged after Europeans stocks rallied off lows from last week and the market continued to support commodities. EUR/JPY was a major mover up over 4 big figures. Resistance at 1.3000 gave way and the Euro popped to 1.3200. Overall the EUR/USD traded with a low of 1.2863 and a high of 1.3236 before closing the day at 1.3200. Looking ahead, German January IFO is expected 81.3 vs. 82.6 previously. Current Account is forecast at -8bn vs. -6.4bn previously.
·The Japanese Yen (JPY) most of the crosses made substantial gains as majors rallied and risk appetite improved. GBP/JPY jumped over 5 big figures. USD/JPY was mixed as USD weakness capped any rebound seen in that pair. Overall the USDJPY traded with a low of 88.45 and a high of 89.68 before closing the day around 89.20 in the New York session. Looking ahead, Bank of Japan minutes are released.
·The Sterling (GBP) staged a major recovery on the back of the Barclays earning which combined with a rally in stocks and commodities to push the pound from 1.35 to 1.40. Overall the GDP/USD traded with a low of 1.3550 and a high of 1.4068 before closing the day at 1.4000 in the New York session. Looking ahead, January CBI distributive traders forecast at -53 vs. -55 previously.
·The Australian Dollar (AUD) caught the uptrend breaking back above 0.6600 but the market was less keen than usual to test higher levels as the outlook for the Australian economy remained uncertain and the expectations of rate cute loom. Overall the AUD/USD traded with a low of 0.6495 and a high of 0.6644 before closing the US session at 0.6610. UPDATE December Business Confidence -20 vs. -30 previously and Q4 PPI 1.3% vs. 20% previously.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2765 |
1.2862 |
1.3225 |
1.3239 |
1.3386 |
|
USD/JPY |
87.13 |
87.99 |
88.90 |
89.69 |
90.16 |
|
GBP/USD |
1.3504 |
1.3549 |
1.4020 |
1.4027 |
1.4068 |
|
AUD/USD |
0.6418 |
0.6495 |
0.6610 |
0.6686 |
0.6844 |
|
XAU/USD |
852.90 |
889.50 |
904.00 |
916.00 |
930.00 |
·Euro – 1.3225
Initial support at 1.2862 (Jan 26 low) followed by 1.2765 (Jan 23 low). Initial resistance is now located at 1.3239 (76.4% retrace 1.3386 to 1.2765) at followed by 1.3386 (Jan 19 high)
·Yen – 88.90
Initial support is located at 87.99 (Jan 23 low) followed by 87.13 (Projected downside target). Initial resistance is now at 89.69 (Jan 26 high) followed by 90.16 (Jan 21 high).
·Pound – 1.4020
Initial support at 1.3549 (jan 26 low) followed by 1.3504 (Jan 23). Initial resistance is now at 1.4027 (Jan 21 high) followed by 1.4068 (38.2% retrace 1.4980 to 1.3504).
·Australian Dollar – 0.6610
Initial support at 0.6495 (Jan 26 low) followed by the 0.6418 (Jan 23 low). Initial resistance is now at 0.6686 (Jan 23 high) followed by 0.6844 (Jan 20 high).
·Gold – 904
Initial support at 889.50 (Jan 26 low) followed by 852.9 (Jan 23 low). Initial resistance is now at 916.1 (Jan 26 high) followed by 931 (Oct 10 high).
