Markets looking to ECB and BoE
CURRENCY TRADING SUMMARY – 5th February 2009 (00:30GMT)
·U.S. Dollar Trading (USD) had a mixed day gaining slightly as equities came under pressure. US data showed improvement with ISM Non manufacturing increasing to 42.9 vs. 39 forecast in January. January ADP Private Unemployment Report was at expectations -522K vs. -693K in December. Crude Oil closed down -$0.46 ending the New York session at $40.32 per barrel. In US share markets, the Dow Jones fell -121 points or -1.51% and the NASDAQ gained -1.25 points or -0.1%. Looking ahead, Weekly Jobless Claims are forecast at 585K vs. 588K previously. Q4 Labor Costs and Productivity forecast at 3% and 1.3% respectively.
·The Euro (EUR) fell sharply in the European session with heavy EUR/JPY selling and a Fitch downgrade of Russia the catalyst. Eastern European contagion is becoming a fear going forward and could be a catalyst for further falls. December European Retail Sales remained flat vs. a forecasted fall of -0.3%. Overall the EUR/USD traded with a low of 1.2814 and a high of 1.3069 before closing the day at 1.2830. Looking ahead, December German Industrial Production is seen -2.5% vs. -6%. Also tonight the ECB meets to discussed but have signaled that no rate cuts is on the cards.
·The Japanese Yen (JPY) strengthened against the EURO and AUD during the early European session on reports of large Japanese selling in both. Better than expected US data prompted rallies in the USD/JPY back to familiar territories. Overall the USDJPY traded with a low of 88.83 and a high of 89.78 before closing the day around 89.45 in the New York session.
·The Sterling (GBP) experience another rally at the start of the US session with the market pushing past 1.4500 ahead of the BOE announcement today. Heavy cross buying especially against the EURO underpinned the move higher. Overall the GDP/USD traded with a low of 1.4326 and a high of 1.4578 before closing the day at 1.4450 in the New York session. Looking ahead, BOE meets tonight and is widely expected to cut by 0.5% to bring the Interest rate to 1.0%.
·The Australian Dollar (AUD) fell heavily in Europe as better than expected December Retail Sales at 3.8% failed to support the pair. Large AUD/JPY sales and the collapse in the EURO dragged the pair towards .6350 support. Underpinning the recovery in NY was the biggest one day rise in the Baltic dry index climbing 15% in one day. Overall the AUD/USD traded with a low of 0.6356 and a high of 0.6531 before closing the US session at 0.6450.
·Gold (XAU) quiet day as the market continues to orbit the $900 level waiting for further direction. Overall trading with a low of USD$895 and high of USD$909 before ending the New York session at USD$904 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2706 |
1.2801 |
1.2835 |
1.3070 |
1.3179 |
|
USD/JPY |
87.99 |
88.60 |
89.30 |
90.76 |
90.97 |
|
GBP/USD |
1.3931 |
1.4050 |
1.4450 |
1.4558 |
1.4632 |
|
AUD/USD |
0.6077 |
0.6249 |
0.6415 |
0.6546 |
0.6732 |
|
XAU/USD |
852.00 |
874.00 |
905.00 |
930.00 |
949.00 |
·Euro – 1.2835
Initial support at 1.2801 (Feb 3 low) followed by 1.2706 (Feb 2 low). Initial resistance is now located at 1.3070 (Feb 4 high) at followed by 1.3179 (Jan 29 high)
·Yen – 89.30
Initial support is located at 88.60 (Feb 3 low) followed by 87.99 (Jan 23 low). Initial resistance is now at 90.76 (Jan 28 high) followed by 90.97 (Jan 20 high).
·Pound – 1.4450
Initial support at 1.4050 (Feb 2 low) followed by 1.3931 (Jan 27 low). Initial resistance is now at 1.4558 (Feb 2 high) followed by 1.4632 (76.4% retrace 1.4980 to 1.3504).
·Australian Dollar – 0.6415
Initial support at 0.6249 (Feb 2 low) followed by the 0.6077 (Nov 20 low). Initial resistance is now at 0.6546 (Feb 3 high) followed by 0.6732 (Jan 1 high).
·Gold – 901
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).
