USD Searching for Support
Last week’s currency trading review
The Dollar lost ground against the Euro and Aussie but was strong against the Yen as traders pared back USD shorts. The CAD had a correction after the BOC released a dovish outlook at their Interest Rate meeting. Strong Chinese data helped Equity Markets with Q3 GDP at 8.9% q/y. Existing Home sales jumped 8.9% in September. The Euro broke above 1.5000 for the first time this year but failed to follow through as the USD found support. Concern about the strength of the Euro to the European recovery is causing some to question the uptrend. German IFO was at 91.9 in October vs. 91.3 previously. The EUR/USD gained 0.69% closing at 1.5008, after opening the week at 1.4904.
The Japanese Yen continued to weaken across the board as the long term yields on US treasuries made funding more expensive in the USD. Resistance at 91.60 was broken on Friday and EUR/JPY hit 138 for the 3rd time this year. The USD/JPY gained 1.29% at 92.08 after opening the week at 90.89. The GBP crashed on Friday after being bought for most of the week after very weak Q3 GDP numbers of -0.4% vs. 0.2% forecast. The pair had traded above 1.6660 and as low as 0.9000 on the EUR/GBP. Also released during the week was the MPC minutes showing a 9-0 vote for keeping rates at 0.5% and QE at 175Bn. GBP/USD fell 0.28% closing at 1.6309 after opening at 1.6354. The AUD was solid as the market continued to buy on dips and AUD/JPY soared to fresh year highs. 0.9300 seems to cap even though the RBA minutes were quite hawkish. The AUD/USD gained 0.66% at 0.9223 after opening at 0.9162.
The forex trading week preview
In the States On Wednesday, September Core Durable Goods are forecast at 0.7% vs. 0.0% previously. On Thursday, Q3 GDP is forecast at 3.0% vs. -0.7%. previously. Also released, Weekly Jobless claims forecast at 523k vs. 531k previously. On Friday, UoM Consumer Confidence is forecast at 70 vs. 69.4 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Tuesday, EU M3 is forecast at 2.2% vs. 2.5% previously. On Wednesday, German October CPI is forecast at 0.0% vs. -0.3% previously. On Thursday, German Unemployment is forecast at 8.3% vs. 8.2% previously. On Friday, EU Oct CPI is forecast at -0.1% vs. -0.3% y/y previously. In the UK On Monday, BoE release a report on there Asset Purchase Facility. On Thursday, September Mortgage Approvals are seen at 53.6 vs. 52.3 previously. On Friday, GFK Consumer Confidence is seen at -14 vs. -16 previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan on Thursday, Sept Preliminary Industrial Production is forecast at 1.1% vs. 1.6% previously. On Friday, BOJ meet to discuss Interest rates. Also released, National CPI for Sept forecast at -2.2% y/y. In Australia On Wednesday, Q3 CPI is forecast at 0.9% vs. 0.5% 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 |
1.4762 |
1.4829 |
1.5010 |
1.5083 |
1.5163 |
|
USD/JPY |
90.08 |
90.78 |
92.10 |
92.53 |
93.30 |
|
GBP/USD |
1.6120 |
1.6241 |
1.6320 |
1.6742 |
1.6831 |
|
AUD/USD |
0.8985 |
0.9113 |
0.9220 |
0.9347 |
0.9476 |
|
XAU/USD |
1043.00 |
1048 |
1053.00 |
1067.00 |
1070.00 |
|
OIL/USD |
78.50 |
79.80 |
79.90 |
82.00 |
82.80 |
Euro – 1.5010
Initial support at 1.4829 (Oct 19 low) followed by 1.4762 (Oct 13 low). Initial resistance is now located at 1.5083 (Oct 21 high) followed by 1.5163 (76.4% retrace 1.6038 – 1.2330)
Yen – 92.10
Initial support is located at 90.78 (Oct 22 low) followed by 90.08 (Oct 20 low). Initial resistance is now at 92.53 (Sept 21 high) followed by 93.3 (Sept 7 high).
Pound – 1.6320
Initial support at 1.6241 (Oct 19 low) followed by 1.6120 (Oct 8 low). Initial resistance is now at 1.6742 (Sept 11 high) followed by 1.6831 (Aug 7 high).
Australian Dollar – 0.9220
Initial support at 0.9113 (Oct 19 low) followed by the 0.8985 (Oct 12 low). Initial resistance is now at 0.9347 (Aug 4 08 high) followed by 0.9476 (Jul 31 08 high).
Gold – 1053
Initial support at 1048 (Oct 21 low) followed by 1043 (Oct 16 low). Initial resistance is now at 1067 (Oct 20 high) followed by 1070 (Oct 14 high).
Oil – 79.90
Initial support at 79.80 (Pivot Point) followed by 78.50 (Intraday support). Initial resistance is now at 82 (Oct 21 high) followed by 82.80 (Fib Projection).
