USD weakens before FOMC tonight
CURRENCY TRADING SUMMARY – 28th January 2009 (00:30GMT)
·U.S. Dollar Trading (USD) was generally weak as the majors continued their recovery off multi-week lows. US data was weak with consumer confidence falling to a new low of 37.7 in January. The Richmond Fed rose slightly to -49 from -55 previously but is still at very poor levels. Oil fell over 6% on softening demand concerns. Crude Oil closed down -$3.63 ending the New York session at $42.10 per barrel. In US share markets, the Dow Jones gained 56 points or 0.72% and the NASDAQ gained 15 points or 0.72%. Looking ahead, FOMC Meeting widely expected to remain at 0% but the market will be waiting for the statement on any new initiative.
·The Euro (EUR) continued its recent rally although trading was volatile as German data beat expectations. German IFO in January jumped to 83 vs. 81.3 previously. The market tested 1.3300 on the back of this but pulled back as profit taking emerged. Overall the EUR/USD traded with a low of 1.3119 and a high of 1.3329 before closing the day at 1.3220. Looking ahead, February German GFK consumer confidence is expected at 2 vs. 2.1 previously.
·The Japanese Yen (JPY) was weaker against most currencies today as the Nikkei surged 5% on the back on a new corporate debt plan from the Japanese government. USD/JPY though struggled to get past the key 90 level. EUR/JPY and GBP/JPY were very buoyant. Overall the USDJPY traded with a low of 88.44 and a high of 90.06 before closing the day around 89.20 in the New York session.
·The Sterling (GBP) consolidated the 5 big figure gains from Monday before pushing on in Europe as the market ceased the relentless pressure on the pound. January CBI distributive trades beat forecasts of -49 coming at -53. Overall the GDP/USD traded with a low of 1.3932 and a high of 1.4239 before closing the day at 1.4170 in the New York session.
·The Australian Dollar (AUD) rallied in Europe dragged up with the Euro to test 0.6700 but couldn’t sustain elevated levels as metals led by Oil fell heavily in the US session. On the data front December Business Confidence was -20 vs. -30 previously and Q4 PPI 1.3% vs. 20% previously. Overall the AUD/USD traded with a low of 0.6575 and a high of 0.6717 before closing the US session at 0.6660.
·Gold (XAU) dipped below $900 as commodities weakened on recession fears in the US session. Overall trading with a low of USD$893.30 and high of USD$907.15 before ending the New York session at USD$903 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2862 |
1.3119 |
1.3195 |
1.3330 |
1.3386 |
|
USD/JPY |
87.13 |
87.99 |
89.20 |
90.16 |
90.97 |
|
GBP/USD |
1.3549 |
1.3929 |
1.4170 |
1.4242 |
1.4443 |
|
AUD/USD |
0.6418 |
0.6495 |
0.6635 |
0.6720 |
0.6844 |
|
XAU/USD |
852.90 |
889.50 |
899.00 |
916.00 |
930.00 |
·Euro – 1.3195
Initial support at 1.3119 (Jan 27 low) followed by 1.2862 (Jan 26 low). Initial resistance is now located at 1.3330 (Jan 27 high) at followed by 1.3386 (Jan 19 high)
·Yen – 89.20
Initial support is located at 87.99 (Jan 23 low) followed by 87.13 (Projected downside target). Initial resistance is now at 90.16 (Jan 21 high) followed by 90.97 (Jan 20 high).
·Pound – 1.4170
Initial support at 1.3929 (Jan 27 low) followed by 1.3549 (Jan 26 low). Initial resistance is now at 1.4242 (50% retrace 1.4980 to 1.3504) followed by 1.4443 (Jan 20 high).
·Australian Dollar – 0.6635
Initial support at 0.6495 (Jan 26 low) followed by the 0.6418 (Jan 23 low). Initial resistance is now at 0.6720 (Jan 27 high) followed by 0.6844 (Jan 19 high).
·Gold – 899
Initial support at 888 (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).
