US FOMC Hold Rates at 0.25%
CURRENCY TRADING SUMMARY –28th January (00:30GMT)
U.S. Dollar Trading (USD) was strong for most of the day with stocks markets under pressure in Asia and Europe. The US Session managed a late stock rally after the FOMC held rates at 0.25% and left the statement broadly the same. The USD did gain however as one member Thomas Hoenig dissented in a hawkish turn of events. DJIA +41 points closing at 10236, S& P +5 points closing at 1097 and NASDAQ +17 points closing at 2221. Looking ahead, December Durable Goods Orders forecast at 2% vs. -0.7%. Also released, Weekly Jobless Claims forecast at 450k vs. 482k previously.
The Euro (EUR) broke through 1.4000 for the first time since July as the USD strengthened across the board. The Post FOMC USD strength sent the pair to 1.3993. With stocks off lows and EUR/JPY rallying higher the EUR/USD finished just above the key 1.4000 level. Overall the EUR/USD traded with a low of 1.3993 and a high of 1.4098 before closing at 1.4025.
The Japanese Yen (JPY) was the strongest currency in the market before the FOMC inspired USD/JPY move higher lifted the crosses. EUR/JPY traded at fresh 9 month lows near Y125 before bouncing along with GBP/JPY and AUD/JPY. December Japanese Trade Balance at Y545bn. Overall the USDJPY traded with a low of 89.32 and a high of 90.57 before closing the day around 89.95 in the New York session. UPDATE December Retail Sales -0.3% vs. 0.2% y/y.
The Sterling (GBP) held up better than most in the face of USD strength as EUR/GBP selling and GBP/JPY buying propelled cable back above 1.6200. January CBI Distributive Trades slipped to -8 vs. 13 previously but this overlooked. Overall the GBP/USD traded with a low of 1.6105 and a high of 1.6247 before closing the day at 1.6170 in the New York session.
The Australian Dollar (AUD) hit fresh month lows before bouncing as stocks and AUD/JPY rallied late in the US session. The downside has been in focus recently as Yen and USD strength take its toll due to falling stock markets. Also adding to downside pressure is concerns about Chinese monetary tightening. Overall the AUD/USD traded with a low of 0.8908 and a high of 0.9048 before closing the US session at 0.8960.
Oil & Gold (XAU) tested lower $1080 support before rebounding. Overall trading with a low of USD$1083 and high of USD$1102 before ending the New York session at USD$1088 an ounce. Continued to slide as sentiment remain weak breaking through $74 support. Crude Oil was up -$0.70 ending the New York session at $74.00.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3900 |
1.3936 |
1.4040 |
1.4194 |
1.4218 |
|
USD/JPY |
88.97 |
89.30 |
90.40 |
90.56 |
91.87 |
|
GBP/USD |
1.6038 |
1.6078 |
1.6270 |
1.6312 |
1.6372 |
|
AUD/USD |
0.8902 |
0.8939 |
0.9030 |
0.9093 |
0.9146 |
|
XAU/USD |
1074.00 |
1082 |
1092.00 |
1104 |
1117.00 |
|
OIL/USD |
72.50 |
74.00 |
74.10 |
75.00 |
77.00 |
Euro – 1.4040
Initial support at 1.3936 (Jan 27 low) followed by 1.3900 (big figure). Initial resistance is now located at 1.4194 (Jan 25 high) followed by 1.4218 (Dec 22 high)
Yen – 90.40
Initial support is located at 89.30 (0.500 of 84.83 – 93.77) followed by 88.97 (Dec 18 low). Initial resistance is now at 90.56 (Jan 22 high) followed by 91.87 (Jan 14 high).
Pound – 1.6270
Initial support at 1.6078 (Jan 22 low) followed by 1.6038 (Jan 11 low). Initial resistance is now at 1.6312 (Jan 21 high) followed by 1.6372 (Jan 20 high).
Australian Dollar – 0.9030
Initial support at 0.8939 (Jan 21 low) followed by the 0.8902 (Dec 30 low). Initial resistance is now at 0.9093 (Jan 25 high) followed by 0.9146 (Jan 21 high).
Gold – 1092
Initial support at 1082 (Jan 22 low) followed by 1074 (Dec 22 low). Initial resistance is now at 1104 (Jan 25 high) followed by 1117 (Jan 21 high).
Oil – 74.10
Initial support at 74.00 (Intraday support) followed by 72.50 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 77.00 (Intraday Resistance).
