USD Stronger as Traders Take Profit
Last week’s currency trading review
The Dollar gained as global stock markets suffered from bouts of profit taking coming off year highs. With the Exception of Gold and the Yen the USD was stronger against all currencies. US October Retail Sales were strong at 1.4% vs. 1.0% forecast. Also helping the USD was the ‘strong Dollar’ comments from Bernanke on Tuesday. The Euro came under pressure as attempts over 1.5000 were pushed back and ECB President Trichet supported the comments from Bernanke on Wednesday. EU CPI was -0.1% y/y in October. 1.4800 provided solid support on pull backs. The EUR/USD fell -0.28% closing at 1.4861, after opening the week at 1.4903.
The Japanese Yen gained against all currencies as risk aversion increased and rallies in AUD/JPY and NZD/JPY were liquidated during the week. Concerns the rally in stocks and Commodity currencies were coming to an end prompted fresh profit taking. BOJ held at 0.1% although they ungraded the economic outlook at Q3 GDP was strong at 1.2% q/q. The USD/JPY fell -0.89% closing at 88.86 after opening the week at 89.65. The GBP lost ground against the majors as speculation that UK banks were in trouble combined with a split vote on the BOE asset purchase program. EUR/GBP reclaimed the 0.9000 level and GBP/JPY fell over 3 Yen. GBP/USD fell -1.09% closing at 1.6497 after opening at 1.6676. The AUD was knocked lower on risk aversion selling and heavy long liquidation. The market touched multi week lows on Friday but rebounded as Gold continued to trade near all time highs. RBA minutes provided little clue to the December Rate announcement but this was taken as a disappointment to some players in the market. The AUD/USD fell 2.0% closing at 0.9145 after opening at 0.9328.
The forex trading week preview
In the States On Monday, October Existing Home Sales are forecast at 2.35 vs. 9.4% previously. On Tuesday, Q3 GDP is forecast at 2.9% vs. 3.5% previously. Also released, FOMC minutes from the November 3-4 meeting. On Wednesday October Durable Goods Orders are forecast at 0.5% vs. 1.0% previously. Weekly Jobless Claims are forecast at 500k vs. 505k previously. On Thursday, US markets closed for Thanks Giving holiday’s. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday, German and EU PMI are released with the EU November Manufacturing forecast at 51.3 vs 50.7. On Tuesday, German GDP Q3F is forecast unchanged at 0.7%. Also Released, November IFO is forecast at 92.5 vs. 91.9 previously. On Thursday, German CPI is forecast at 0.4% y/y vs. 0.0% previously. In the UK On Tuesday, BoE Governor King speaks to the Treasury Committee. On Wednesday, Q3 GDP is forecast at -0.3% vs. -0.4% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Thursday, BOJ minutes released. On Friday October Jobless Rates forecast at 5.4% vs. 5.3% previously. Also released, October Core CPI forecast at -1.1% vs. -1.0% previously. In Australia On Thursday, Q3 Capex is forecast at 1.0% vs. 3.3% previously.. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.4786 |
1.4802 |
1.4850 |
1.4966 |
1.5016 |
|
USD/JPY |
88.36 |
88.64 |
88.85 |
89.75 |
90.60 |
|
GBP/USD |
1.6516 |
1.6572 |
1.6475 |
1.6750 |
1.6878 |
|
AUD/USD |
0.8907 |
0.8971 |
0.9125 |
0.9337 |
0.9406 |
|
XAU/USD |
1127.00 |
1130 |
1151.00 |
1152.00 |
1165.00 |
|
OIL/USD |
75.00 |
76.00 |
77.60 |
78.00 |
80.00 |
Euro – 1.4850
Initial support at 1.4802 (Nov 20 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.4966 (Nov 19 high) followed by 1.5016 (Nov 16 high)
Yen – 88.85
Initial support is located at 88.64 (Nov 19 low) followed by 88.36 (Oct 9 low). Initial resistance is now at 89.75 (Nov 16 high) followed by 90.61 (Nov 12 high).
Pound – 1.6475
Initial support at 1.6402 (Nov 4 low) followed by 1.6263 (Nov 3 low). Initial resistance is now at 1.6750 (Nov 19 high) followed by 1.6878 (Nov 16 high).
Australian Dollar – 0.9125
Initial support at 0.8971 (Nov 4 low) followed by the 0.8907 (Nov 2 low). Initial resistance is now at 0.9337 (Nov 18 high) followed by 0.9406 (Nov 16 high).
Gold – 1151
Initial support at 1127 (Nov 17 low) followed by 1118 (Nov 16 high). Initial resistance is now at 1152 (Nov 18 high) followed by 1165 (1.618 of 985 – 1070.80 from 1026.60).
Oil – 77.60
Initial support at 76.00 (Intraday support) followed by 75.00 (Intraday support). Initial resistance is now at 78 (key level) followed by 80 (October high).
