Bad News Pounds UK
26/01/09
last week’s currency trading review
The Dollar continued to strengthen against all currencies except the Yen as stocks plumbed new lows for the year. Recession concerns mounted on weekly Jobless claims which jumped to 589K from 545K previously. Building Permits also dropped to .55m vs. .6m forecast. The Dow pivoted 8000. The Euro broke below 1.3000 as GBP weakness dragged the neighbor down. The German Zew Survey improved to -31 from -45.2 previously. EUR/JPY hit multi year lows as stocks came under relentless pressure. The EUR/USD lost -2.35% closing at 1.2960, after opening the week at 1.3265. The Japanese Yen accelerated gains this week as stocks and bad news sent risk through the roof. GBP/JPY hit all time lows and USD/JPY dropped below 90. The Bank of Japan kept rates at 0.1% but did note downside risks to economy. The USD/JPY lost -2.27% closing at 88.71 after opening at 90.71. The GBP was crushed under the weight of banking concerns and rumors of downgrades to sovereign ratings. Q4 GDP was worse than expected at -1.5% vs. -1.2% forecast. Also released December Retails sales +1.6%. The GBP/USD lost -6.79% closing at 1.3795 after opening at 1.4731. The AUD tracked the EUR and GBP lower bowing to heavy AUD/JPY and AUD/USD selling. Helping to support late in the week was the dramatic rise of gold to $900 an ounce. The AUD/USD closed down -2.97% at 0.6535 after opening at 0.6729.
The forex trading week preview
In the States Dec Existing Home Sales are expected at 4.4m vs. 4.49m previously. On Wednesday the market will focus on the FOMC rate decision that although is widely expected to remain at 0-0.25% but should be accompanied by a statement outlining further measures to help the market. On Thursday Durable Goods are forecast to drop -2% in December and Q4 GDP is seen down -5% vs. -0.5% previously. Finally on Friday January Consumer Sentiment is expected to be confirmed at 61.9. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone German IFO Business Climate is expected at 81 vs. 82.6 previously. On Wednesday Feb German Consumer Confidence is expected at 1.9 vs. 2.1 previously. On Thursday the German unemployment rate is expected to tick higher to 7.2% from 7.1%. On Friday December Eurozone CPI is seen at 1.4% vs. 1.6% in November. Eurozone Unemployment is seen ticking higher to 7.9% from 7.8% previously. In the UK Light data week with DecemberMortgage approvals see at 28K vs. 27K previously. Also on Friday, Consumer Confidence seen dropping to -34 vs. -33 previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Wednesday Retails Sales for December are seen dropping -1.5% vs. -0.9%. Also Thursday December CPI seen at 0.4% vs. 1.0% while Tokyo CPI in January is seen at 0.6% vs. 0.7%. December Industrial Production is forecast at -9.0% vs. -8.5% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Australia PPI in on Tuesday seen at 0.4% in Q4. CPI on Wednesday is seen at 3.6% vs. 50% previously. Also on Wednesday the RBNZ seen cutting to 4.0% from 5.0%. We will provide our previews and reviews of these data releases in the daily summary.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3000 |
1.3111 |
1.3320 |
1.3374 |
1.3489 |
|
USD/JPY |
88.48 |
89.74 |
91.00 |
91.67 |
92.29 |
|
GBP/USD |
1.4470 |
1.4622 |
1.4830 |
1.4981 |
1.5029 |
|
AUD/USD |
0.6538 |
0.6628 |
0.6750 |
0.6820 |
0.7042 |
|
XAU/USD |
802.00 |
816.20 |
843.00 |
857.00 |
870.00 |
·Euro – 1.3320
Initial support at 1.3111 (Jan 16 low) followed by 1.3000 (Dec 11 low). Initial resistance is now located at 1.3374 (Jan 15 high) at followed by 1.3489 (Jan 12 high)
·Yen – 91.00
Initial support is located at 89.74 (Jan 16 low) followed by 88.48 (Jan 15 low). Initial resistance is now at 91.67 (Jan 9 high) followed by 92.29 (61.8% retrace 94.64 to 88.48).
·Pound – 1.4830
Initial support at 1.4622 (Jan 16 low) followed by 1.4470 (Jan 13 low). Initial resistance is now at 1.4981 (Jan 16 high) followed by 1.5029 (61.8% retrace 1.5374 to 1.4470).
·Australian Dollar – 0.6750
Initial support at 0.6628 (Jan 16 low) followed by the 0.6538 (Jan 15 low). Initial resistance is now at 0.6820 (Jan 15 high) followed by 0.7042 (Jan 12 high).
·Gold – 843
Initial support at 816 (Jan 16 low) followed by 802 (Jan 15 low). Initial resistance is now at 857 (Jan 12 high) followed by 870 (Jan 6 high).
