Big pull back in Global stocks

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was very strong for most of the day as stocks around the world suffered from heavy profit taking and concerns of new bubbles in assets. Weekly Jobless claims were at forecasts of 505k whilst the November Philly Fed Index was stronger at 16 vs. 11.5 previously. In US Stocks, DJIA -93 points closing at 10332, S&P -15 points closing at 1094 and NASDAQ -36 points closing at 2156.

European Euro

The Euro (EUR) was very heavy as USD strength and EUR/JPY selling that continued for much of the day. A slight reprieve at the end of the US session allowed the pair to reclaim the 1.4900 level. A much touted 1.48-1.51 DNT option is though to expire today which could allow for a break of the recent range next week. Overall the EUR/USD traded with a low of 1.4842 and a high of 1.4958 before closing at 1.4900. Looking ahead, October German PPI is forecast at 0.1% vs. -0.5% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was the strongest currency yesterday on risk aversion demand. Liquidation of AUD/JPY and GBP/JPY guided the USD/JPY below 89 Yen. Stock markets and US bond yields are the main factors affecting the Yen at the moment. Overall the USDJPY traded with a low of 88.63 and a high of 89.46 before closing the day around 88.95 in the New York session. Looking ahead, BOJ meeting today.

Pound Sterling (GBP)

The Sterling (GBP) was under pressure on most pairs as the risk sensitive currency struggled in a souring global market. Oil was under pressure and continued bad press about UK banks weighed on the Pound. October Retail Sales were at 0.4% vs. 0.5% forecast. Overall the GBP/USD traded with a low of 1.6604 and a high of 1.6744 before closing the day at 1.6640 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) slumped for the second day as traders booked profit from the recent rally and commodities apart were very weak. AUD/JPY selling and a mixed technical outlook are beginning to weigh although should sentiment improve the Aussie is prone to bounce first. Overall the AUD/USD traded with a low of 0.9130 and a high of 0.9285 before closing the US session at 0.9180.

Oil & Gold

Oil & Gold (XAU) held up well as safe haven flows offset gains in the USD. Overall trading with a low of USD$1130 and high of USD$1146 before ending the New York session at USD$1141 an ounce. Weakened as investor sentiment turned 'risk off'. Crude Oil was down -$2.12 ending the New York session at $77.46.

Technical Analysis: Global Stocks Suffered From Heavy Profit Taking

Euro (EUR)

Euro – 1.4920 : Initial support at 1.4808 (Nov 17 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5016 (Nov 16 high) followed by 1.5048 (Nov 11 high).

Yen (JPY)

Yen – 89.00 : 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 90.60 (Nov 16 high).

Pound Sterling (GBP)

Pound – 1.6640 : Initial support at 1.6572 (Nov 13 low) followed by 1.6516 (Nov 12 low). Initial resistance is now at 1.6878 (Nov 16 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9180 : Initial support at 0.9092 (Nov 6 low) followed by the 0.8971 (Nov 4 low). Initial resistance is now at 0.9337 (Nov 18 high) followed by 0.9406 (Nov 16 high).

Gold (XAU)

Gold – 1141 : 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

Oil – 78.30 : Initial support at 78.00 (Intraday support) followed by 76 (Intraday support). Initial resistance is now at 80 (key level) followed by 82 (October high).

Gold Trades above $1150

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) eased for most of the day as the recent strength proved temporary and US stocks remained well supported near highs. Fed Speaker Bullard did little to help the USD with his comments that US rates may stay low until 2012. October CPI at 0.3% vs. 0.2% forecast. October Housing starts -10.6% vs. 1.9% previously. In US Stocks, DJIA -11 points closing at 10426, S&P -1 points closing at 1109 and NASDAQ +10 points closing at 2193. Looking ahead, Weekly Jobless Claims forecast at 505k vs. 502k previously. Also released, November Philly Fed forecast at 12 vs. 11.5 previously.

European Euro

The Euro (EUR) was once again very strong as USD strength subsided and constant buying kept the single currency in demand. Good rallies in the EUR/JPY and EUR/GBP also provided solid support. September Current Account came in at -5.4bn vs. 0.6bn previously. Overall the EUR/USD traded with a low of 1.4868 and a high of 1.4992 before closing at 1.4965.

Japanese Yen (JPY)

The Japanese Yen (JPY) was a mixed bag as USD/JPY managed small gains but GBP/JPY and AUD/JPY remained on the back foot. Risk appetite is still strong but most pairs are sticking to well know ranges whilst the USD/JPY remains very quiet. Overall the USDJPY traded with a low of 88.99 and a high of 89.51 before closing the day around 89.40 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) was sold aggressively against the EURO and USD as the MPC minutes showed a split in the vote of how much the QE asset purchase program should be extended. MPC Member Miles called for a greater amount of 40bn vs. the 25bn Pounds eventually agreed too. Overall the GBP/USD traded with a low of 1.6712 and a high of 1.6849 before closing the day at 1.6745 in the New York session. Looking ahead, October Retail Sales forecast at 0.5% vs. 0.0% previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) rallied on the back of Euro's and Golds gains but was capped by weaker US stocks. The pair is consolidating gains as the market takes a breath from the relentless rallying over the past 2 weeks. Most AUD crosses have been treading water as fresh buying is being offset from profit taking. Overall the AUD/USD traded with a low of 0.9264 and a high of 0.9340 before closing the US session at 0.9295. Looking ahead, RBA Assistant Governor Debelle Speaks.

Oil & Gold

Oil & Gold (XAU) traded at fresh year highs above $1150 before settling on profit taking. Overall trading with a low of USD$1135 and high of USD$1153 before ending the New York session at USD$1145 an ounce. Oil was higher on a drop in US crude Inventories. Crude Oil was up $0.40 ending the New York session at $79.50.

Technical Analysis: US Stocks Remained Well Supported

Euro (EUR)

Euro – 1.4950 : Initial support at 1.4808 (Nov 17 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5016 (Nov 16 high) followed by 1.5048 (Nov 11 high).

Yen (JPY)

Yen – 89.45 : Initial support is located at 88.36 (Oct 9 low) followed by 88.00 (Big Figure). Initial resistance is now at 89.75 (Nov 16 high) followed by 90.60 (Nov 16 high).

Pound Sterling (GBP)

Pound – 1.6725 : Initial support at 1.6670 (Nov 16 low) followed by 1.6572 (Nov 13 low). Initial resistance is now at 1.6878 (Nov 16 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9290 : Initial support at 0.9237 (Nov 17 low) followed by the 0.9211 (Nov 12 low). Initial resistance is now at 0.9406 (Nov 16 high) followed by 0.9476 (Jul 31 '08 high).

Gold (XAU)

Gold – 1143 : Initial support at 1127 (Nov 17 low) followed by 1118 (Nov 16 high). Initial resistance is now at 1150 (Key Level) followed by 1165 (1.618 of 985 - 1070.80 from 1026.60).

Oil

Oil – 79.60 : Initial support at 78.00 (Intraday support) followed by 76 (Intraday support). Initial resistance is now at 80 (key level) followed by 82 (October high).

EURO bows to resurgent USD

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) took charge of the market with Bernanke's comments being endorsed by ECB President Trichet to send the EURO lower and USD stronger across the board. Even as US stocks closed at year highs, risk was taken off the table as US data was weaker than expected. October Industrial Output was 0.1% vs. 0.4% forecast. In US Stocks, DJIA +30 points closing at 10437, S&P +1 points closing at 1110 and NASDAQ +6 points closing at 2203. Looking ahead, October Housing starts forecast at 0.6mn vs. 0.59mn previously and October Building Permits forecast at 0.58mn vs. 0.575mn previously. Also released, Weekly Oil Inventories is forecast at 1.2mn vs. 1.8mn previously. Also released, October Core CPI is forecast at 0.1% vs. 0.2% previously m/m.

European Euro

The Euro (EUR) tested 1.5000 in early Asia before the mood soured and the pair fell back due to profit taking. This pullback turned in a rout in Europe with Trichet's comments that Bernanke's strong USD comments were 'very important'. Overall the EUR/USD traded with a low of 1.4805 and a high of 1.5001 before closing at 1.4875. looking ahead, September Current Account previously at -1.3bn.

Japanese Yen (JPY)

The Japanese Yen (JPY) weakened against the resurgent USD but was strong on the crosses as risk aversion from falling stocks saw AUD/JPY liquidation from recent highs. EUR/JPY and GBP/JPY are also treading water as the market trying to decipher the next direction. Overall the USDJPY traded with a low of 88.72 and a high of 89.56 before closing the day around 89.30 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) was support on dips as EUR/GBP selling underpinned cable and buyers gained the upper hand. 1.7000 is the natural target for the bulls, last traded in August before the BoE started increasing the Asset Purchase program. October CPI was 1.5% vs. 1.4% y/y. Overall the GBP/USD traded with a low of 1.6753 and a high of 1.6876 before closing the day at 1.6820 in the New York session. Looking ahead, MPC minutes forecast at 9-0 on recent meeting decisions.

Australian Dollar (AUD)

The Australian Dollar (AUD) was very heavy as the market took profit from lofty heights after the RBA minutes failed to inspire. The minutes left the decision to raise rates in December open with further data releases look set to decide. Providing continued support however is the commodity rally and already wide AUD-USD interest rate differential. Overall the AUD/USD traded with a low of 0.9310 and a high of 0.9379 before closing the US session at 0.9236.

Oil & Gold

Oil & Gold (XAU) dipped with USD strength but was bought back up quickly underpinning the support the precious metal is receiving. Overall trading with a low of USD$1127 and high of USD$1145 before ending the New York session at USD$1143 an ounce. Tracked Stocks and Metals higher. Crude Oil was up $0.24 ending the New York session at $79.14.

Technical Analysis: Euro Tested 1.5000 In Early Asia

Euro (EUR)

Euro – 1.4875 : Initial support at 1.4808 (Nov 17 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5016 (Nov 16 high) followed by 1.5048 (Nov 11 high)

Yen (JPY)

Yen – 89.25 : Initial support is located at 88.36 (Oct 9 low) followed by 88.00 (Big Figure). Initial resistance is now at 89.75 (Nov 16 high) followed by 90.60 (Nov 16 high).

Pound Sterling (GBP)

Pound – 1.6820 : Initial support at 1.6670 (Nov 16 low) followed by 1.6572 (Nov 13 low). Initial resistance is now at 1.6878 (Nov 16 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9310 : Initial support at 0.9211 (Nov 12 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9406 (Nov 16 high) followed by 0.9476 (Jul 31 '08 high).

Gold (XAU)

Gold – 1143 : Initial support at 1118 (Nov 16 low) followed by 1101 (Nov 13 high). Initial resistance is now at 1144 (Nov 16 high) followed by 1150 (Big Level).

Oil

Oil – 79.50 : Initial support at 78.00 (Intraday support) followed by 76 (Intraday support). Initial resistance is now at 80 (key level) followed by 82 (October high).

Fresh Risk Appetite hurts USD

Last week’s Currency Trading Review

The Dollar continued to lose ground as US stocks markets soared to year highs and Gold traded to fresh all time highs. Economic data was light but multiple FED speakers all re-emphasized that US rates will remain low for some time. Weekly Jobless Claims improved to 502k vs. 512k forecast. Trade Balance -36.5bn vs. -31.8bn forecast. UoM consumer Sentiment fell to 66 vs. 71.1 previously. The Euro was volatile but ended higher as stocks helped to lift whilst weak Oil contained gains. Solid resistance above 1.5000 is proving hard to break for the time being. German ZEW Economic Sentiment slumped to 51.1 vs. 55.2 forecast and 56 previously. Preliminary EU Q3 GDP was weaker than expected at 0.4% vs. 0.6% forecast. The EUR/USD gained 0.41% closing at 1.4906, after opening the week at 1.4845.

The Japanese Yen once again kept to tight ranges against the USD but weakened across most other pairs as improving risk appetite caused high yielding pairs such as the AUD/JPY to be bought. September Core Machinery Orders improved 10.5% vs. 3.4% forecast. The USD/JPY fell -0.25% closing at 89.66 after opening the week at 90.88. The GBP continued to shrug off the best efforts of the BoE to keep the Pound under pressure. BoE Governor King in the Inflation report once again talked of the weak GBP helping the UK economy to recover via exports. Claimant Count Change was strong at 12.9k vs. 20.2k forecast. GBP/USD gained 0.42% closing at 1.6681 after opening at 1.6611. The AUD gained heavily on the back of gold and US stocks rallying but was also aided by strong economic data. October Employment improved by +24.5k vs. -10.1k forecast and September Home loans improved by 5% vs. 3% forecast. The AUD/USD gained 1.52% at 0.9328 after opening at 0.9186.

For the week starting 16/11/09.

This Forex Trading Week Preview

In the States; On Tuesday, October Industrial Production is forecast at 0.4% vs. 0.7% previously. Also released, Oct PPI forecast at -1.7% vs. -4.8% y/y. On Wednesday, October CPI is forecast at 0.3% vs. -0.9% previously. Also released, October Building Permits are forecast at 580k vs. 573k previously. On Thursday, Weekly Jobless Claims are forecast at 504K vs. 502k previously. On Friday, Philly Fed is forecast at 12 vs. 11.5 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday, ECB President Trichet Speaks. On Wednesday, EU September Current account is released previously at -1.3bn. On Friday, October German PPI is forecast at -7.5% vs. -7.6% previously. In the UK; On Tuesday, October CPI is forecast at 1.4% vs. 1.1% previously y/y. On Wednesday, BoE minutes are forecast to show 9-0 vote. On Thursday, October Retail Sales are forecast at 2.9% vs. 2.4% previously y/y. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Friday, BOJ meet to discuss rates and are expected to hold at 0.1%. In Australia; On Tuesday, RBA minutes. On Wednesday, Q3 Wage Cost index forecast at 0.7% vs. 0.8% previously Q/Q. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: US Stocks Markets Soared To Year Highs

Euro (EUR)

Euro – 1.4930 : Initial support at 1.4822 (Nov 12 low) followed by 1.4786 (0.618 OF 1.4624-1.5049). Initial resistance is now located at 1.5048 (Nov 11 high) followed by 1.5063 (Oct 26 high)

Yen (JPY)

Yen – 89.60 : Initial support is located at 89.46 (Nov 13 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 90.60 (Nov 12 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6710 : Initial support at 1.6516 (Nov 12 low) followed by 1.6402 (Nov 4 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9340 : Initial support at 0.9211 (Nov 12 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9370 (Nov 12 High) followed by 0.9476 (Jul 31 ' 08 high).

Gold (XAU)

Gold – 1125 : Initial support at 1095 (Nov 9 low) followed by 1087 (Nov 6 high). Initial resistance is now at 1129 (1026.60 plus 0.618 of 905.10-1070.80) followed by 1136 (1.618 retrace 930.34 - 1024.28 through 985).

Oil

Oil – 76.80 : Initial support at 75.00 (Key level) followed by 74 (Intraday support). Initial resistance is now at 78 (Intraday resistance) followed by 80 (Key Level).

Bernanke Comments on Dollar

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was on the back foot for most of the day as Global equities remained buoyant in the wake of the APEC meeting confirming stimulus and declining to comment on the USD. Fed Chief Bernanke did however support the dollar and for a short period in the US session the USD surged off fresh year lows as the market digested his comments. Doubts about the conviction of the FED to support the dollar though saw these gains pared back into the close with stock markets finishing at fresh Year highs. US retail Sales were strong at 1.4% in October vs. 0.9% forecast. In US Stocks, DJIA +136 points closing at 10406, S&P +15 points closing at 1109 and NASDAQ +29 points closing at 2197. Looking ahead, US October PPI is forecast at 0.6% vs. -0.6% previously.

European Euro

The Euro (EUR) had a wild trading day gaining heavily with stocks and oils but was pummeled lower on Bernanke's pro USD comments before reversing these losses to make fresh highs above 1.5000. October EU CPI was at 0.3% as forecast. EUR/JPY struggled to track the improved risk appetite as USD/JPY dived to month lows. Overall the EUR/USD traded with a low of 1.4879 and a high of 1.5018 before closing at 1.4975. looking ahead, September EU Trade Balance forecast at -0.9Bn vs. 1.0Bn previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was broadly strong as the USD/JPY melted on Dollar concerns below the 89 Yen level. Most crosses struggled to hold gains with even the risk trade AUD/JPY struggling to maintain gains whilst stocks were at year highs and gold continued to surge. Japan Q3 GDP at 1.2% vs. 0.7% forecast. Overall the USDJPY traded with a low of 88.73 and a high of 89.73 before closing the day around 89.10 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) was very solid rallying up to fresh month highs above 1.6800 on continued cross recovery and generally strong risk appetite. EUR/GBP broke below 0.8900 support and GBP/JPY continued to test the 150 Yen level. Overall the GBP/USD traded with a low of 1.6667 and a high of 1.6881 before closing the day at 1.6830 in the New York session. Looking ahead, October CPI is forecast at 1.4% vs. 1.1% previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) broke above 0.9400 for fresh year highs as risk appetite and the weak USD pushed the commodity currency higher. Adding to the rally was Oil and golds large moves higher with the only risk stemming from the speed of the recent AUD rise and the technically overbought conditions this brings. Overall the AUD/USD traded with a low of 0.9315 and a high of 0.9408 before closing the US session at 0.9375. Looking ahead, RBA Minutes released from November's meeting are important for clues of December potential rate rise.

Oil & Gold

Oil & Gold (XAU) rallied with little reprieve all day. Overall trading with a low of USD$1122 and high of USD$1144 before ending the New York session at USD$1138 an ounce. Played catch up with commodities and general risk appetite. Crude Oil was up $2.55 ending the New York session at $78.90.

Technical Analysis: Pound Rallied Up To Fresh Month Highs

Euro (EUR)

Euro – 1.4975 : Initial support at 1.4822 (Nov 12 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5048 (Nov 11 high) followed by 1.5063 (Oct 26 high)

Yen (JPY)

Yen – 89.10 : Initial support is located at 88.73 (Nov 16 low) followed by 88.00 (Big Figure). Initial resistance is now at 90.60 (Nov 12 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6825 : Initial support at 1.6572 (Nov 13 low) followed by 1.6519 (Nov 12 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9375 : Initial support at 0.9211 (Nov 12 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9476 (Jul 31 ' 08 high) followed by 0.9637 (Jul 24 '08 high).

Gold (XAU)

Gold – 1138 : Initial support at 1101 (Nov 13 low) followed by 1095 (Nov 9 high). Initial resistance is now at 1144 (Nov 16 high) followed by 1150 (Big Level).

Oil

Oil – 78.90 : Initial support at 78.00 (Intraday support) followed by 76 (Intraday support). Initial resistance is now at 80 (key level) followed by 82 (October high).

USD Weakness Resumes

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gave back most of the gains from Thursday as US stocks rebounded and Gold led the charge higher. US Trade deficit in September widened to -$36.5bn vs. -$31bn forecast. University of Michigan Consume Sentiment was also weaker at 66 vs. 70.6 previously. In US Stocks, DJIA +73 points closing at 10270, S&P +6 points closing at 1093 and NASDAQ +18 points closing at 2167. Looking ahead, September Business Inventories forecast at -0.6% vs. -1.5% previously.

European Euro

The Euro (EUR) Found support and recovered through the day to finish above the 1.4900 figure. Risk was tentatively put back on throughout the day although EUR/JPY struggled as USD/JPY losses matched the EUR/USD gains. EU GDP was slightly less than forecast at 0.4% vs. 0.5% forecast. Overall the EUR/USD traded with a low of 1.4826 and a high of 1.4936 before closing at 1.4915. looking ahead, October EU inflation is forecast at 0.3% vs. 0.0% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) strengthened against the USD and was well supported against most pairs with investors less keen to buy crosses into the weekend. The 90 Yen level has been the key figure in the market recently with buyers below and sellers above creating a very tight range. Overall the USDJPY traded with a low of 89.47 and a high of 90.41 before closing the day around 89.63 in the New York session. UPDATE Q3 GDP at 1.2% vs. 0.75 forecast.

Pound Sterling (GBP)

The Sterling (GBP) rallied with the improvement in risk appetite after finding solid support inside the 1.65 figure on Thursday. The pair finished near 1.6700 with the EUR/GBP testing support at 0.8920 as the Pound recovery continued. Overall the GBP/USD traded with a low of 1.6572 and a high of 1.6705 before closing the day at 1.6690 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) rallied the most of the majors as gold recovered and the high yielding pair took advantage of strong sentiment towards the AUD after recent strong economic data. The pair is still strongly correlated with the stock markets but dips are finding solid support keeping the bias higher. Overall the AUD/USD traded with a low of 0.9225 and a high of 0.9343 before closing the US session at 0.9341.

Oil & Gold

Oil & Gold (XAU) opened under pressure but found support near $1100 and recovered for the rest of the day. Overall trading with a low of USD$1102 and high of USD$1119 before ending the New York session at USD$1118 an ounce. Continued to slump as demand came into question. Crude Oil was down -$0.59 ending the New York session at $76.35.

Technical Analysis: US Stocks Rebounded

Euro (EUR)

Euro – 1.4930 : Initial support at 1.4822 (Nov 12 low) followed by 1.4786 (0.618 OF 1.4624-1.5049). Initial resistance is now located at 1.5048 (Nov 11 high) followed by 1.5063 (Oct 26 high).

Yen (JPY)

Yen – 89.60 : Initial support is located at 89.46 (Nov 13 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 90.60 (Nov 12 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6710 : Initial support at 1.6516 (Nov 12 low) followed by 1.6402 (Nov 4 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9340 : Initial support at 0.9211 (Nov 12 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9370 (Nov 12 High) followed by 0.9476 (Jul 31 ' 08 high).

Gold (XAU)

Gold – 1125 : Initial support at 1095 (Nov 9 low) followed by 1087 (Nov 6 high). Initial resistance is now at 1129 (1026.60 plus 0.618 of 905.10-1070.80) followed by 1136 (1.618 retrace 930.34 - 1024.28 through 985).

Oil

Oil – 76.80 : Initial support at 75.00 (Key level) followed by 74 (Intraday support). Initial resistance is now at 78 (Intraday resistance) followed by 80 (Key Level).

USD strong as Stocks pull back

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gained across the board as USD shorts covered on the back of falling stocks and comments from Chinese Premier Wen Jiabao that the global recovery road will be bumpy. Also supporting the dollar was very weak Oil and comments from US Treasurer Geithner about a strong US dollar policy and the cutting of US deficits. Weekly Jobless claims were 502k vs. 510k forecast. In US Stocks, DJIA -93 points closing at 10197, S&P -11 points closing at 1087 and NASDAQ -17 points closing at 2149. Looking ahead, September Trade Balance forecast at -31bn vs. -30bn previously.

European Euro

The Euro (EUR) was heavily sold against the greenback and the Pound as Oil and stocks slumped in the US session. EUR/JPY held up well though as the Yen was also sold against the USD quite aggressively. EUR/GBP slipped back through 0.9000 as the recent pound weakness provided a buffer against further losses overnight. September Industrial Production is forecast at 0.4% was slightly weaker at 0.3%. Overall the EUR/USD traded with a low of 1.4820 and a high of 1.5018 before closing at 1.4850. looking ahead, Q3 GDP forecast at 0.8% vs. 0.3% previously. EU Q3 GDP forecast at 0.5% vs. -0.2% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) weakened against the USD as the key 90 Yen level was broken on the topside and senior MOF officials stated that exit strategies were still some time away as the Japanese consumer remains weak. Overall the USDJPY traded with a low of 89.63 and a high of 90.63 before closing the day around 90.35 in the New York session. Looking ahead, September Industrial Output previously at 1.4%.

Pound Sterling (GBP)

The Sterling (GBP) held up surprisingly well to USD strength with EUR/GBP selling and GBP/JPY buying offsetting to keep cable relatively unchanged. Ongoing support from M&A activity and general investment in to UK firms is providing an undercurrent of support for the Pound. Overall the GBP/USD traded with a low of 1.6513 and a high of 1.6629 before closing the day at 1.6570 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) was hurt the most as the market was caught wrong footed after surging to fresh year highs in Asia to 0.9370 on the back of strong October Employment numbers showing +24k jobs vs. -10k forecast. When US stocks turned south and Oil crumbled the market liquidated and reversed the days direction to plumb 4 day lows. Overall the AUD/USD traded with a low of 0.9210 and a high of 0.9372 before closing the US session at 0.9230.

Oil & Gold

Oil & Gold (XAU) pulled back nearly $20 an ounce from fresh year highs as the USD strengthened across the board. Overall trading with a low of USD$1102 and high of USD$1123 before ending the New York session at USD$1104 an ounce. Was sold heavily after US oil inventories rose more than expected. Crude Oil was down -$1.73 ending the New York session at $77.55.

Technical Analysis: Stocks Pull Back

Euro (EUR)

Euro – 1.4850 : Initial support at 1.4811 (Nov 5 low) followed by 1.4800 (Key Level). Initial resistance is now located at 1.5063 (Oct 26 high) followed by 1.5163 (0.764 retrace of 1.5063-1.4624).

Yen (JPY)

Yen – 90.35 : Initial support is located at 89.62 (Nov 6 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 90.60 (Nov 12 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6580 : Initial support at 1.6532 (Nov 12 low) followed by 1.6519 (Nov 6 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9255 : Initial support at 0.9211 (Nov 12 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9476 (July 31 08 high) followed by 0.9637 (Jul 31 high).

Gold (XAU)

Gold – 1105 : Initial support at 1095 (Nov 9 low) followed by 1087 (Nov 6 high). Initial resistance is now at 1129 (1026.60 plus 0.618 of 905.10-1070.80) followed by 1136 (1.618 retrace 930.34 - 1024.28 through 985).

Oil

Oil – 76.90 : Initial support at 75.00 (Key level) followed by 74 (Intraday support). Initial resistance is now at 78 (Intraday resistance) followed by 80 (Key Level).

Pound Hit by King's comments

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) hit fresh lows on the dollar index breaking through 75 to fresh lows this year. Gold continued to edge higher in light trade with the US away. Stocks finished higher across the board but the USD did mange to bounce off lows with Pound losses leading the way. In US Stocks, DJIA +44 points closing at 10291, S&P +5 points closing at 1098 and NASDAQ +15 points closing at 2166. Looking ahead, Weekly Jobless claims forecast at 510k vs. 512k previously. Also released, Crude Oil Inventories forecast at 1.1 vs. -4mn barrels.

European Euro

The Euro (EUR) stayed in the upper range but a short foray into the 1.5040-50 region was quickly repelled with talk of heavy profit taking and central bank selling capping gains. With year highs close by the market is remaining quite long although should 1.5000 continue to contain they may get impatient. Support is located at 1.4950. Overall the EUR/USD traded with a low of 1.4952 and a high of 1.5050 before closing at 1.4980. looking ahead, September Industrial Production is forecast at 0.4% vs. 0.9% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) found strength in Asia after September Machine orders rose over 10% in a sign the worst of the financial crisis was over for the worlds second largest economy. USD/JPY slipped to 89.30 by early Europe before rallying hard with the crosses to test the key 90 Yen. Overall the USDJPY traded with a low of 89.27 and a high of 90.06 before closing the day around 89.85 in the New York session. Looking ahead, CGPI forecast at -0.1% in October.

Pound Sterling (GBP)

The Sterling (GBP) was under heavy selling pressure as BoE Governor King was once again extremely dovish and left the door open for further expansion of the Asset Purchases program. Also hurting the GBP was his reiteration that a weak Pound would help the UK to an export led recovery. October Claimant Count forecast at 20k was better than expectations at 12.9k. Overall the GBP/USD traded with a low of 1.6534 and a high of 1.6801 before closing the day at 1.6560 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) hit year high above 0.9330 as US stocks traded at fresh year highs and the commodity currency tracked gold upwards. November Consumer Confidence was -2.5% as interest rate rises dampened the consumer mood. Overall the AUD/USD traded with a low of 0.9270 and a high of 0.9346 before closing the US session at 0.9290. Looking ahead, October Employment is forecast at -10k vs. 40k previously. The Unemployment Rate is forecast at 5.8% vs. 5.7% previously.

Oil & Gold

Oil & Gold (XAU) continued the upwards trend for fresh year highs. Overall trading with a low of USD$1105 and high of USD$1119 before ending the New York session at USD$1117 an ounce. Ended higher but was rejected from the key $80 a barrel level. Crude Oil was down +0.23 ending the New York session at $79.30.

Technical Analysis: GBP Was Under Heavy Selling Pressure

Euro (EUR)

Euro – 1.4975 : Initial support at 1.4939 (Nov 10 low) followed by 1.4853 (Nov 9 low). Initial resistance is now located at 1.5063 (Oct 26 high) followed by 1.5163 (0.764 retrace of 1.5063-1.4624).

Yen (JPY)

Yen – 89.75 : Initial support is located at 89.62 (Nov 6 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 90.86 (Nov 4 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6545 : Initial support at 1.6519 (Nov 6 low) followed by 1.6467 (Nov 5 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9285 : Initial support at 0.9256 (Nov 10 low) followed by the 0.9196 (Nov 9 low). Initial resistance is now at 0.9476 (July 31 08 high) followed by 0.9637 (Jul 31 high).

Gold (XAU)

Gold – 1115 : Initial support at 1095 (Nov 9 low) followed by 1087 (Nov 6 high). Initial resistance is now at 1129 (1026.60 plus 0.618 of 905.10-1070.80) followed by 1136 (1.618 retrace 930.34 - 1024.28 through 985).

Oil

Oil – 79.30 : Initial support at 78.00 (Intraday Support) followed by 75 (key Level). Initial resistance is now at 80 (Intraday resistance) followed by 82 (Oct High).

Markets Consolidate Gains

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gained in Asia as profit taking set in but this proved short lived as stocks in the US eked out small gains to bring the rally into its 7th day. Little data was released but five Fed officials did speak throughout the day with the general message of prolonged low rates helping to support the market on dips. In US Stocks, DJIA +20 points closing at 10246, S&P +0 points closing at 1093 and NASDAQ -3 points closing at 2151. Looking ahead, Bank holiday for Veterans Day.

European Euro

The Euro (EUR) struggled to hold above 1.5000 as profit taking in Asia and Oil losses in the US session capped gains. Support at 1.4950 emerged and the pair kept to a tight range for the rest of the day. EUR/JPY selling ahead of 135 Yen is also posing a challenge for the bulls. November German Zew Survey at 51.1 vs. 55 forecast. Overall the EUR/USD traded with a low of 1.4937 and a high of 1.5022 before closing at 1.4980. looking ahead, French Bank Holiday.

Japanese Yen (JPY)

The Japanese Yen (JPY) kept to a very tight range around the 90 level as bouts of USD weakness was countered by fresh cross demand. Support at 89.70 is proving solid but attempts above the 90 level are equally short lived. AUD/JPY remains well supported with most of the volatility as usual seen on the GBP/JPY. October Current Account at 1568bn vs. 1530bn forecast. Overall the USDJPY traded with a low of 89.67 and a high of 90.21 before closing the day around 89.80 in the New York session. Looking ahead, September Machine Orders are forecast at 2.9% vs. 0.5% previously.

Pound Sterling (GBP)

The Sterling (GBP) was shunted lower at the start of Europe on the back of a Fitch sovereign downgrade warning. The pair spent the rest of the day recovering off lows. September Trade Balance forecast at -6.1bn came in weaker at -7.194bn. EUR/GBP briefly popped above 0.9000 but later slipped back below the key handle. Overall the GBP/USD traded with a low of 1.6600 and a high of 1.6791 before closing the day at 1.6730 in the New York session. Looking ahead, October Claimant Count forecast at 20k vs. 20.8k previously. September ILO Unemployment forecast at 8.0% vs. 7.9% previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) consolidated Monday's gains nicely with dips being well supported and risk appetite remaining strong. October NAB Business Confidence 16 vs. 14 previously. AUD/NZD is a cross in play with the pair trying to break through resistance at 1.2650 on route to the key 1.3000 level. Overall the AUD/USD traded with a low of 0.9254 and a high of 0.9326 before closing the US session at 0.9300. Looking ahead, November Consumer Confidence previously at 1.7%.

Oil & Gold

Oil & Gold (XAU) was quiet but closed above the $1100 level. Overall trading with a low of USD$1096 and high of USD$1109 before ending the New York session at USD$1103 an ounce. Came off on profit taking and the downgrading of storms threatening production. Crude Oil was down -$1.13 ending the New York session at $78.30.

Technical Analysis: Oil & Gold Closed Above The $1100 Level

Euro (EUR)

Euro – 1.4975 : Initial support at 1.4853 (Nov 9 low) followed by 1.4811 (Nov 5 low). Initial resistance is now located at 1.5063 (Oct 26 high) followed by 1.5163 (0.764 retrace of 1.5063-1.4624).

Yen (JPY)

Yen – 89.75 : Initial support is located at 89.62 (Nov 6 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 90.86 (Nov 4 high) followed by 91.32 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6735 : Initial support at 1.6519 (Nov 6 low) followed by 1.6467 (Nov 5 low). Initial resistance is now at 1.6843 (Nov 9 high) followed by 1.7043 (Aug 5 high).

Australian Dollar (AUD)

Australian Dollar – 0.9295 : Initial support at 0.9196 (Nov 9 low) followed by the 0.9092 (Nov 6 low). Initial resistance is now at 0.9329 (Oct 21 high) followed by 0.9476 (Jul 08 high).

Gold (XAU)

Gold – 1103 : Initial support at 1087 (Nov 6 low) followed by 1080 (Nov 4 high). Initial resistance is now at 1111 (Nov 9 high) followed by 1129 (1026.60 plus 0.618 of 905.10-1070.80).

Oil

Oil – 79.00 : Initial support at 78.00 (Intraday Support) followed by 75 (key Level). Initial resistance is now at 80 (Intraday resistance) followed by 82 (Oct High).

Fed hold rates low for an 'extended period' of time

Last week’s Currency Trading Review

The Dollar was on the back foot giving up most the of gains from the week before as risk was turned back 'on' after the Federal Reserve kept rates at 0.25% and stated they would keep rates low for an extended period of time. A greater than expected rise in the October Unemployment Rate to 10.2% could not stem the positive sentiment. ISM Manufacturing jumped to 55.7 vs. 52.6 previously. The Euro rebounded off multi week lows at 1.4630 to test 1.4900 on the back of a strong rally in equities and the ECB keeping rates at 1.0% but scaling back liquidity measures in a sign of confidence for the European economy. The EUR/USD gained 0.84% closing at 1.4846, after opening the week at 1.4722.

The Japanese Yen was roughly unchanged against the Dollar but lost ground against most currencies as risk appetite picked up and investors searched for higher yields. GBP/JPY and AUD/JPY were especially well supported. The USD/JPY fell -0.26 % closing at 89.87 after opening the week at 90.10. The GBP gained heavily on Thursday after the BoE kept rates at 0.5% and only increased the Quantitative easing program by 25bn pounds. EUR/GBP continued to fall as the GBP gains outpaced the Euro settling comfortable below the key 0.9000 level. GBP/USD gained 1.01% closing at 1.6611 after opening at 1.6444. The AUD was the major gainer after the RBA increased rates by 0.25% and stocks markets and gold continued to rally aggressively. Also helping on Friday was the RBA monetary Policy statement which raised economic targets. The AUD/USD gained 2.10% at 0.9180 after opening at 0.8987.

For the week starting 10/11/09.

This Forex Trading Week Preview

In the States; Quiet Data week with Veterans day on Wednesday. Weekly Jobless claims are forecast at 510k vs. 512k previously. On Friday, September Trade Balance is forecast at -31.6bn vs. -30.7bn previously. Also released, UoM forecast at 71 vs. 70.6 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Monday, September German Industrial Production is forecast at 1.2% vs. 1.7%. On Tuesday, German Zew is forecast at 55 vs. 56 previously. On Thursday, September EU Industrial Production is forecast at 0.5% vs. 0.9% previously. On Friday, German GDP is forecast at 0.8% vs. 0.3% previously. EU Q3 GDP is forecast at 0.6% vs. -0.2% previously. In the UK; On Tuesday, Trade Balance forecast at -6100mn vs. -6240mn previously. On Wednesday, ILO Unemployment rate forecast at 8.0% vs. 7.9% previously. Also released, BoE Quarterly Inflation Report. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Wednesday, September Machine Orders are forecast at 4.1% vs. 0.5% previously. On Friday, September Industrial Production previously at -18.9%. In Australia; On Thursday, October Unemployment is forecast at 5.8% vs. 5.7% previously with a drop of -10k jobs. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: USD Was On The Back Foot

Euro (EUR)

Euro – 1.4870

Initial support at 1.4811 (Nov 5 low) followed by 1.4702 (Nov 4 low). Initial resistance is now located at 1.4927 (Oct 27 high) followed by 1.4959 (0.764 retrace of 1.5063-1.4624)

Yen (JPY)

Yen – 89.85

Initial support is located at 89.62 (Nov 6 low) followed by 89.20 (Nov 2 low). Initial resistance is now at 91.32 (Nov 4 high) followed by 91.62 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6650

Initial support at 1.6467 (Nov 5 low) followed by 1.6402 (Nov 4 low). Initial resistance is now at 1.6693 (Oct 23 high) followed by 1.6742 (Sept 11 high).

Australian Dollar (AUD)

Australian Dollar – 0.9210

Initial support at 0.9026 (Nov 5 low) followed by the 0.8971 (Nov 4 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1098

Initial support at 1084 (Nov 5 low) followed by 1080 (Nov 4 high). Initial resistance is now at 1101 (Nov 6 high ) followed by 1107 (905.10 plus 1.618 of 864.97-990.00).

Oil

Oil – 77.80 : Initial support at 76.50 (Intraday Support) followed by 75 (key Level). Initial resistance is now at 78 (Intraday resistance) followed by 80 (Key Level).