US manufacturing shows slight rebound
CURRENCY TRADING SUMMARY – 3rd February 2009 (00:30GMT)
·U.S. Dollar Trading (USD) continued to strengthen in the Asian and European markets until US stocks staged a rebound off lows prompting profit taking on the majors. January Manufacturing ISM climbed to 35.6 vs. 32.9 previously. December Construction spending dropped -1.4% and Personal Income dropped -0.2%. Crude Oil closed down $1.60 ending the New York session at $40.08 per barrel. In US share markets, the Dow Jones fell 64 points or -0.80% and the NASDAQ gained 18 points or 1.22%. Looking ahead, December Pending Homes Sales are forecast flat.
·The Euro (EUR) formed a base at 1.27 before rallying back above 1.28 as cross buying lifted. EUR/GBP surged back to 90 on renewed sterling woes and the EUR/JPY climbed back to 115 with US stocks rallying off lows. European Manufacturing PMI for January was revised lower to 34.4 from 34.5. Overall the EUR/USD traded with a low of 1.2705 and a high of 1.2898 before closing the day at 1.2850. Looking ahead, December PPI forecast to drop -1.1% vs.-1.9% in November.
·The Japanese Yen (JPY) strengthened in Asia and Europe while risk aversion continued as the market theme. The market entered oversold territory on the crosses and the lack of follow through saw a significant relief rally when US stocks changed direction. AUD/JPY briefly hit multi-month lows under 56 yen. Overall the USDJPY traded with a low of 88.82 and a high of 89.98 before closing the day around 89.50 in the New York session.
·The Sterling (GBP) was sold heavily in Asia and early Europe as the market factored in the downgrade of Barclays Bank Debt from Moody’s and expectations rose of a rate cut on Thursday. January PMI manufacturing rebounded to 35.8 vs. 32.9. Overall the GDP/USD traded with a low of 1.4055 and a high of 1.4439 before closing the day at 1.4280 in the New York session.
·The Australian Dollar (AUD) broke through support at .6350 and kept falling steadily to 0.6250 as the market anticipates a big rate cut today from the RBA. AUD/JPY led the rebound off lows as US stocks recovered and the market steadied itself for the decision. Overall the AUD/USD traded with a low of 0.6250 and a high of 0.6363 before closing the US session at 0.6320. Looking ahead, RBA expected to cut 1% to 3.25% from 4.25% previously. UPDATE December Trade Balance 589m vs. 950m.
·Gold (XAU) profit taking led gold lower in Asia with the metal falling back to $900 an ounce before bouncing into the teens. Overall trading with a low of USD$901 and high of USD$930 before ending the New York session at USD$905 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2549 |
1.2628 |
1.2825 |
1.2961 |
1.3179 |
|
USD/JPY |
87.13 |
87.99 |
89.45 |
90.76 |
90.97 |
|
GBP/USD |
1.3931 |
1.4050 |
1.4250 |
1.4544 |
1.4632 |
|
AUD/USD |
0.6077 |
0.6232 |
0.6310 |
0.6376 |
0.6524 |
|
XAU/USD |
852.00 |
874.00 |
905.00 |
930.00 |
949.00 |
·Euro – 1.2825
Initial support at 1.2628 (Dec 5 low) followed by 1.2549 (Dec 4 low). Initial resistance is now located at 1.2961 (Jan 30 high) at followed by 1.3179 (Jan 29 high)
·Yen – 89.45
Initial support is located at 87.99 (Jan 23 low) followed by 87.13 (Jan 21 low). Initial resistance is now at 90.76 (Jan 28 high) followed by 90.97 (Jan 20 high).
·Pound – 1.4250
Initial support at 1.4050 (Feb 2 low) followed by 1.3931 (Jan 27 low). Initial resistance is now at 1.4544 (Jan 30 high) followed by 1.4632 (76.4% retrace 1.4980 to 1.3504).
·Australian Dollar – 0.6310
Initial support at 0.6232 (Nov 24 low) followed by the 0.6077 (Nov 20 low). Initial resistance is now at 0.6376 (Feb 2 high) followed by 0.6524 (Jan 30 high).
·Gold – 905
Initial support at 874 (Jan 29 low) followed by 852 (Jan 22 low). Initial resistance is now at 930 (Oct 10 reaction high) followed by 949 (July 23 low).
