Dubai Debt Crisis Shakes Markets
CURRENCY TRADING SUMMARY – 27th November (00:30GMT)
U.S. Dollar Trading (USD) with the US away the market was expecting a quiet day but as Nikkei losses extended into the afternoon and the focus switched to a new crisis emerging in the middle east debt market, risk was taken off the table. European Stocks were down over 3%. Looking ahead, Thanks Giving Holidays continue in the US.
The Euro (EUR) gave up most of the gains from the topside breakout the day before as risk aversion went through the roof. The unspecified nature of the current crisis is leading to a lot of volatility with many investors searching for clarification of banks exposure to Dubai Debt. Overall the EUR/USD traded with a low of 1.4935 and a high of 1.5141 before closing at 1.5015. Looking ahead, November Economic Sentiment forecast at 88 vs. 86.2 previously.
The Japanese Yen (JPY) broke below year lows at 87.10 to trade at fresh 14 year lows near 86.30. AUD/JPY broke lower to trade below the key 80.00 level. BOJ Minutes were upbeat but extra help for corporations were left intact for a little bit longer. Overall the USDJPY traded with a low of 86.30 and a high of 87.50 before closing the day around 86.50 in the New York session. UPDATE October Unemployment Rate at 5.1% vs. 5.4% forecast.
The Sterling (GBP) was sold aggressively throughout the day from 1.6700 down to 1.6500 as the UK banks exposure to Dubai debt hurt FSTE stocks down 3.2%. November CBI Distributive trades were at 13 as forecast. GBP/JPY fell over 300 sen. Overall the GBP/USD traded with a low of 1.6475 and a high of 1.6729 before closing the day at 1.6530 in the New York session.
The Australian Dollar (AUD) sentiment reversed completely from the start of Asia as stock losses mounted and Oil and Metals pulled lower throughout Europe. AUD/JPY led the way lower through 80 Yen but AUD/NZD continued to be supported above 1.2700. Q3 Capex at -3.9% vs. +1% forecast. Overall the AUD/USD traded with a low of 0.9090 and a high of 0.9300 before closing the US session at 0.9140.
Oil & Gold (XAU) was mixed but supported on dips as strong USD was bought on dips. Overall trading with a low of USD$1180 and high of USD$1195 before ending the New York session at USD$1192 an ounce. Was sold as sentiment soured dramatically. Crude Oil was down -$2.00 ending the New York session at $75.95.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4833 |
1.4889 |
1.4940 |
1.5144 |
1.5285 |
|
USD/JPY |
84.80 |
85.00 |
86.00 |
87.10 |
88.63 |
|
GBP/USD |
1.6200 |
1.6400 |
1.6405 |
1.6746 |
1.6878 |
|
AUD/USD |
0.9000 |
0.9026 |
0.9040 |
0.9337 |
0.9406 |
|
XAU/USD |
1132.00 |
1153 |
1188.00 |
1200.00 |
1250.00 |
|
OIL/USD |
74.50 |
75.00 |
75.90 |
78.00 |
80.00 |
Euro – 1.4940
Initial support at 1.4889 (Nov 24 low) followed by 1.4833 (Nov 23 low). Initial resistance is now located at 1.5144 (Nov 25 high) followed by 1.5285 (May 08 08 low)
Yen – 86.00
Initial support is located at 85.00 (key level) followed by 84.80 (Nov 27 low). Initial resistance is now at 87.10 (Previous 09 low) followed by 88.63 (Nov 25 high).
Pound – 1.6405
Initial support at 1.6402 (Nov 4 low) followed by 1.6200 (Previous support). Initial resistance is now at 1.6746 (Nov 25 high) followed by 1.6878 (Nov 16 high).
Australian Dollar – 0.9040
Initial support at 0.9026 (Nov 5 low) followed by the 0.9000 (Psychological level). Initial resistance is now at 0.9337 (Nov 18 high) followed by 0.9406 (Nov 16 high).
Gold – 1188
Initial support at 1153 (Nov 23 low) followed by 1132 (Nov 20 high). Initial resistance is now at 1200 (Key level) followed by 1250 (Key level).
Oil – 75.90
Initial support at 75.00 (Intraday support) followed by 74.50 (Intraday support). Initial resistance is now at 78 (intraday resistance) followed by 80 (Key level).
