US Unemployment Data Looming

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) with stocks rallying for a 4th day the market went back into 'risk on' mode and the USD was on the back foot. Weekly Jobless claims were 512k vs. 530k previously. Q3 Productivity at 9.5% was very strong vs. 6.5% forecast. In US Stocks, DJIA +203 points closing at 10005, S&P +20 points closing at 1066 and NASDAQ +49 points closing at 2105. Looking ahead, October Non Farm Payrolls forecast at -175k vs. -263k previously. The October Unemployment rate is forecast at 9.9% vs. 9.8% previously.

European Euro

The Euro (EUR) continued to find strength on dips as US stocks soared and the ECB was relatively upbeat at their ECB meeting were they held rates at 1.0%. The pair failed to track the gains completely on Wall st. as the market pauses ahead of the US Unemployment data tonight. Overall the EUR/USD traded with a low of 1.4810 and a high of 1.4920 before closing at 1.4880. looking ahead, September Industrial Orders are forecast at 1% vs. 1.45 previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was strong is Asia as the Nikkei fell but then was sold for most of the day as the US had its biggest rally in 2 months. AUD/JPY and GBP/JPY led the rebound but the market was well contained again as the event risk of the NFP today contained risk appetite. Overall the USDJPY traded with a low of 89.97 and a high of 90.84 before closing the day around 90.75 in the New York session. Looking ahead, September Leading Indicators previously at 0.8%.

Pound Sterling (GBP)

The Sterling (GBP) shot higher as the BoE increased the Asset purchase program by 25bn vs. 50bn forecast. The BoE held rates at 0.5%. The market found resistance above 1.6600 and settled below the figure. EUR/GBP support was in the low 0.89's. GBP/JPY reclaimed the 150 Yen level. Overall the GBP/USD traded with a low of 1.6639 and a high of 1.6464 before closing the day at 1.6580 in the New York session. Looking ahead, UK PPI Output prices are forecast at 0.3% vs. 0.5% m/m previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) good data could not help the Aussie rally in Asia as AUD/JPY selling dragged the pair to day lows before a change in sentiment pushed the pair higher once again in the US. September Trade Balance at -1.85bn vs. -2.1bn forecast. Overall the AUD/USD traded with a low of 0.9023 and a high of 0.9127 before closing the US session at 0.9105. Looking ahead, RBA Monetary Policy Statement.

Oil & Gold

Oil & Gold (XAU) consolidated gains settling just under $1100 level. Overall trading with a low of USD$1083 and high of USD$1095 before ending the New York session at USD$1091 an ounce. Fell back below $80 a barrel on profit taking after recent 3 day rally. Crude Oil was down $0.78 ending the New York session at $79.62.

Technical Analysis: GBP Shot Higher

Euro (EUR)

Euro – 1.4875 : Initial support at 1.4702 (Nov 4 low) followed by 1.4626 (Nov 3 low). Initial resistance is now located at 1.4917 (Nov 5 high) followed by 1.4927 (Oct 27 high).

Yen (JPY)

Yen – 90.85 : Initial support is located at 89.99 (Nov 5 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 – 1.6575 : Initial support at 1.6402 (Nov 4 low) followed by 1.6241 (Oct 19 low). Initial resistance is now at 1.6693 (Oct 23 high) followed by 1.6742 (Sept 11 high).

Australian Dollar (AUD)

Australian Dollar – 0.9110 : Initial support at 0.8971 (Nov 4 low) followed by the 0.8907 (Nov 2 low). Initial resistance is now at 0.9144 (Nov 4 high) followed by 0.9218 (Oct 27 high).

Gold (XAU)

Gold – 1091 : Initial support at 1080 (Nov 4 low) followed by 1055 (Nov 3 high). Initial resistance is now at 1097 (Nov 4 high ) followed by 1100 (Psychological level).

Oil

Oil – 79.80 : Initial support at 78.5 (Intraday Support) followed by 78.0 (Intraday support). Initial resistance is now at 81 (Nov 5 high) followed by 82 (October High).

FED remains Dovish, USD Weak

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was on the back foot as stocks rallied around the world and the Federal Reserve left rates at 0.25% and stating that rates would remain low for an extended period of time. ADP October Employment Report was -203k vs. -188k previously. Also released, ISM Services forecast at 50.6 vs. 51.6 forecast. In US Stocks, DJIA +30 points closing at 9802, S&P +1 points closing at 1046 and NASDAQ -2 points closing at 2055. Looking ahead, Weekly Jobless Claims are forecast at 523k vs. 530k previously.

European Euro

The Euro (EUR) rallied for most of the day on continued strength in commodities and a rebound in stocks. September PPI was as forecast at -0.4%. EUR/JPY enjoyed solid gains although a late sell off in stocks induced profit taking. Overall the EUR/USD traded with a low of 1.4701 and a high of 1.4911 before closing at 1.4880. Looking ahead, ECB rate announcement forecast to remain at 1.0%.

Japanese Yen (JPY)

The Japanese Yen (JPY) was very weak as the crosses began to rally and technical's turned against the Yen. USD/JPY struggled to hold above 91 Yen on a mixed response to the FOMC but remains supported on dips. EUR/JPY returned to the 135 figure. Overall the USDJPY traded with a low of 90.03 and a high of 91.34 before closing the day around 90.80 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) rallied above 1.6500 on improved risk appetite and strong GBP/JPY buying. October PMI Services was 56.9 vs. 55.4 previously. 1.6600 capped the topside but the market is well supported ahead of today's BoE meeting. Overall the GBP/USD traded with a low of 1.6600 and a high of 1.6399 before closing the day at 1.6550 in the New York session. Looking ahead, BoE Rate meeting. Also released, September Industrial Production forecast at 1% vs. -2.5% previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) was dented in Asia from poor September Retail Sales of -0.2% vs. +0.4% forecast. The dip below 0.9000 proved short lived and when the market continued to push higher the Aussie rebounded. AUD/JPY enjoyed the Yen weakness combined with the ongoing rally in gold. Overall the AUD/USD traded with a low of 0.8970 and a high of 0.9146 before closing the US session at 0.9105. Looking ahead, September Trade Balance forecast at -2100mln vs. -1524mln previously.

Oil & Gold

Oil & Gold (XAU) continued to push higher on yesterdays momentum nearing the $1100 level. Overall trading with a low of USD$1079 and high of USD$1098 before ending the New York session at USD$1092 an ounce. Broke above $80 a barrel as the rally accelerated. Crude Oil was up $0.80 ending the New York session at $80.40.

Technical Analysis: FED Remains Dovish

Euro (EUR)

Euro – 1.4875 : Initial support at 1.4626 (Nov 3 low) followed by 1.4581 (Oct 5 low). Initial resistance is now located at 1.4909 (Nov 4 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 90.80 : Initial support is located at 89.87 (Nov 3 low) followed by 89.20 (Oct 14 low). Initial resistance is now at 91.62 (Oct 29 high) followed by 92.32 (Oct 27 high).

Pound Sterling (GBP)

Pound – 1.6560 : Initial support at 1.6241 (Oct 19 low) followed by 1.6141(Sept 30 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9100 : Initial support at 0.8907 (Nov 2 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9144 (Nov 4 high) followed by 0.9218 (Oct 27 high).

Gold (XAU)

Gold – 1091 : Initial support at 1055 (Nov 3 low) followed by 1035 (Oct 30 high). Initial resistance is now at 1100 (Key level ) followed by 1114 (1.382 of 930.34 to 1024.28 from 985).

Oil

Oil – 80.40 : Initial support at 78.5 (Intraday Support) followed by 78.0 (Intraday support). Initial resistance is now at 81 (Nov 5 high) followed by 82 (October High).

Attention turns to FOMC

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) hit multi-week highs in Europe against a raft of currencies as banking worries put stock markets on the back foot. News of India buying gold and Warren Buffet making a large investment in US railways help the US reverse the market's direction and helped gold to rally to fresh year highs above $1080. September Factory Orders forecast at 0.8% were actually 0.9%. In US Stocks, DJIA -17 points closing at 9771, S&P +2 points closing at 1045 and NASDAQ +8 points closing at 2057. Looking ahead, US FOMC Rate decision widely expected to remain at 0.25% but with the market focused on the accompanying statement. Also released, ADP October Employment Report is forecast at -190k vs. -254k previously.

European Euro

The Euro (EUR) fell to fresh lows below 1.4650 as the Euro came under pressure from concerns about European and UK banking issues. Some analysts are beginning to view the recent Euro rally as nearing a top and are focusing on the downside for the first time in many months. Ongoing sovereign support is helping to slow the decent. EUR/JPY found support below 132 Yen. Overall the EUR/USD traded with a low of 1.4625 and a high of 1.4813 before closing at 1.4720. Looking ahead, October PMI services forecast at 52.3 vs. 50.9 previously. Also released, EU September PPI forecast at -0.4% vs. 0.4% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) held up well in a risk adverse environment making solid gains in Asia and Europe on the Crosses but giving these up in the US session. USD/JPY remain muted as it cycled the 90 Yen level. AUD/JPY was in play as the market struggled with risk appetite. Overall the USDJPY traded with a low of 89.86 and a high of 90.61 before closing the day around 90.30 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) broke below 1.6300 as the market continued to focus on the downside ahead of BOE and in the midst of Banking concerns. A rebound in commodities and US stocks helped lift the pair from lows. Overall the GBP/USD traded with a low of 1.6259 and a high of 1.6458 before closing the day at 1.6420 in the New York session. Looking ahead, October PMI is forecast at 55.5 vs. 55.3 previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) a raise in rates could not help the Aussie from falling steadily after the announcement. A muted statement also raised concerns that a December rate rise is in doubt. A strong rebound in risk sentiment and fresh highs in Gold help the pair to lift a cent in the US session but the market is still very nervous. Overall the AUD/USD traded with a low of 0.8915 and a high of 0.9094 before closing the US session at 0.9000. UPDATE SEPTEMBER RETAIL SALES -0.2% vs. 0.4% forecast.

Oil & Gold

Oil & Gold (XAU) new highs above $1080 as India's purchase of 200 tonnes helped lift sentiment for the precious metal. Overall trading with a low of USD$1055 and high of USD$1088 before ending the New York session at USD$1084 an ounce. Rallied on the back of golds move higher. Crude Oil was up $1.47 ending the New York session at $79.60.

Technical Analysis: USD Hit Multi-week Highs In Europe

Euro (EUR)

Euro – 1.4720 : Initial support at 1.4581 (Oct 5 low) followed by 1.4481 (Oct 2 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 90.30 : Initial support is located at 89.20 (Nov 2 low) followed by 88.84 (Oct 14 low). Initial resistance is now at 90.69 (Nov 2 high) followed by 91.62 (Oct 29 high).

Pound Sterling (GBP)

Pound – 1.6415 : Initial support at 1.6241 (Oct 19 low) followed by 1.6141(Sept 30 low). Initial resistance is now at 1.6478 (Nov 2 high) followed by 1.6604 (Oct 29 high).

Australian Dollar (AUD)

Australian Dollar – 0.9030 : Initial support at 0.8907 (Nov 2 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9122 (Nov 2 high) followed by 0.9218 (Oct 27 high).

Gold (XAU)

Gold – 1084 : Initial support at 1041 (Nov 2 low) followed by 1035 (Oct 30 high). Initial resistance is now at 1067 (Oct 20 high) followed by 1070 (Oct 14 high).

Oil

Oil – 79.50 : Initial support at 78.5 (Intraday Support) followed by 78.0 (Intraday support). Initial resistance is now at 80 (Key level) followed by 82 (October High).

US Manufacturing expands

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was mixed as stocks remained volatile with good data not generating substantial gains in the stock markets. October ISM Manufacturing was 55.7 vs. 53 forecast. September Pending Home Sales gained 6.1%. The Dollar hit day highs at the start of Asia as the market opened Monday on a very shaky footing. In US Stocks, DJIA +76 points closing at 9789, S&P +7 points closing at 1043 and NASDAQ +4 points closing at 2049. Looking ahead, September Factory Orders are forecast at 0.8% vs. -0.8% previously.

European Euro

The Euro (EUR) tested below 1.4700 in Asia but rebounded well as stocks lifted off lows and China's PMI at 55 showed manufacturing expanded at the fastest pace in 18 months. The rally continued on similar data in the US before stocks once again came under pressure and pushed the Euro lower. EUR/JPY was especially volatile rallying from 131 to test 134 in New York. Overall the EUR/USD traded with a low of 1.4682 and a high of 1.4847 before closing at 1.4765.

Japanese Yen (JPY)

The Japanese Yen (JPY) was extremely volatile with sharp selling in thin volume at the start of Asia leading to a test of low 89 Yen area before bouncing for the rest of the day. Crosses exaggerated the movement with all having 3+ Yen ranges. Overall the USDJPY traded with a low of 89.18 and a high of 90.72 before closing the day around 90.30 in the New York session. Looking ahead, Bank Holiday in Japan.

Pound Sterling (GBP)

The Sterling (GBP) was pressured at the start of the European session as the market focused on propsed UK bank break up plan and potential for the BOE to expand QE by up to 50bn pounds more on Thursday. October PMI Manufacturing at 53.7 vs. 50.1 forecast. Overall the GBP/USD traded with a low of 1.6327 and a high of 1.6481 before closing the day at 1.6395 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) touched fresh multi-week lows at .8905 before rebounding with the improving sentiment and manufacturing PMI's around the world. The commodity currency also enjoyed gains from the bounce in Oil and Gold seen overnight. Overall the AUD/USD traded with a low of 0.8904 and a high of 0.9125 before closing the US session at 0.9040. Looking ahead, RBA Interest rate meeting forecast to raise rates to 3.5% from 3.25% previously.

Oil & Gold

Oil & Gold (XAU) bounced as the USD weakened over the day. Overall trading with a low of USD$1041 and high of USD$1063 before ending the New York session at USD$1059 an ounce. Also bounced on improved global manufacturing data. Crude Oil was up $1.13 ending the New York session at $78.13.

Technical Analysis: US Stocks Remained Volatile

Euro (EUR)

Euro – 1.4770 : Initial support at 1.4683 (Oct 29 low) followed by 1.4646 (Oct 6 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 90.35 : Initial support is located at 88.84 (Oct 14 low) followed by 88.01 (Oct 7 low). Initial resistance is now at 90.69 (Nov 2 high) followed by 91.82 (Oct 28 high).

Pound Sterling (GBP)

Pound – 1.6400 : Initial support at 1.6330 (Nov 2 low) followed by 1.6252 (Oct 26 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9040 : Initial support at 0.8866 (Oct 7 low) followed by the 0.8760 (Oct 6 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1058 : Initial support at 1035 (Oct 30 low) followed by 1026 (Oct 29 high). Initial resistance is now at 1067 (Oct 20 high) followed by 1070 (Oct 14 high).

Oil

Oil – 78.20 : Initial support at 76.20 (Intraday Support) followed by 75.25 (Intraday support). Initial resistance is now at 78.50 (previous support) followed by 80 (Major Level).

Large USD Rebound on Equity correction

Last week’s Currency Trading Review

The Dollar even a stunning 3.5% Q3 GDP could not help stock markets finish the week in positive territory as fresh banking concerns caused a spike in risk aversion. The VIX also known as the fear index climbed over 20% on Friday and commodities fell aggressively from recent highs. The Euro fell heavily from the 1.5000 levels as the sentiment turned and key levels were breached. German Unemployment Change was strong at -26k vs. 15k forecast. German Retail sales were weak though at -0.5% vs. 0.7% previously. The EUR/USD fell 1.94.% closing at 1.4721, after opening the week at 1.5007.

The Japanese Yen was extremely strong but volatile as it outpaced the USD as the safe haven of choice. NZD/JPY fell over 7% and most crosses were under extreme pressure. USD/JPY finished at the key 90 Yen level but is technically under pressure as the rally failed. The USD/JPY fell -2.15 % at 90.10 after opening the week at 92.04. The GBP bucked the trend against all except the Yen with heavy EUR/GBP selling breaking the pair below 0.9000. Cable was able to shown a small rise as the pound rallied on positive data and M&A flows. October CBI realized Sales at 8 vs. 6 forecast. GBP/USD gained 0.85% closing at 1.6444 after opening at 1.6304. The AUD was heavily sold along with the NZD as the commodity currencies took the brunt of the sell off. AUD/JPY fell over 3 Yen twice during the week. Q3 CPI was at 1.0% vs. 0.9% forecast but was not strong enough to change the consensus of a 0.25% rate rise at this week's RBA meeting. The AUD/USD fell 2.63% at 0.8987 after opening at 0.9223.

For the week starting 02/11/09.

This Forex Trading Week Preview

In the States; On Monday, October ISM Manufacturing is forecast at 53 vs. 52.6 previously. Also released, pending home sales forecast at 0% vs. 6.4% previously. On Tuesday, September Factory Orders are forecast at 1.0% vs. -0.85 previously. On Wednesday, ISM non-manufacturing is forecast at 51.6 vs. 50.9 previously. Also on Wednesday, FOMC Rate announcement forecast to remain at 0.25%. On Thursday, Q3 Productivity is forecast at 6% vs. 6.6% previously. Q3 Unit labor costs are forecast at -3.8% vs. -5.9% previously. Weekly Jobless claims are forecast at 520k vs. 530k previously. On Friday, US Nonfarm Unemployment is forecast at -175k vs. -263k previously and the Unemployment Rate is forecast 9.9% vs. 9.8%. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Monday, EU PMI manufacturing is forecast at 50.7 in October while on Wednesday EU PMI Services is forecast at 52.3. On Wednesday, EU PPI forecast at -7.7% vs. -7.5%. On Thursday, ECB rate announcement forecast unchanged at 1.00%. On Friday, German September Factory Orders forecast at 1.0% vs. 1.4% previously. In the UK; On Monday, PMI manufacturing is forecast at 50 vs. 49.5 previously. On Wednesday, PMI services are forecast at 55.2 vs. 55.3 previously. On Thursday, BOE meeting forecast to remain at 0.5% with a 50bn rise in QE to 225bn pounds. On Friday, G20 meeting begins in Scotland. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Thursday, BOJ minutes released while on Friday Leading indicators are forecast at 92.5 vs. 91.2 previous. In Australia; On Tuesday, RBA meet and are forecast to raise rates to 3.5% vs. 3.25% previously. On Thursday, Retail Sales are forecast to rise 0.5% vs. 0.95 previously. On Friday, RBA governor Stevens gives a speech and September's trade balance is forecast at -2150mn vs. -1524mn previously. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: Large USD Rebound

Euro (EUR)

Euro – 1.4730 : Initial support at 1.4683 (Oct 29 low) followed by 1.4646 (Oct 6 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 90.00 : Initial support is located at 89.93 (Oct 30 low) followed by 89.28 (Oct 15 low). Initial resistance is now at 91.82 (Oct 28 high) followed by 92.53 (Sept 21 high).

Pound Sterling (GBP)

Pound – 1.6450 : Initial support at 1.6339 (Oct 29 low) followed by 1.6252 (Oct 26 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9015 : Initial support at 0.8944 (Oct 29 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1045 : Initial support at 1026 (Sept 29 low) followed by 1024 (Sept 17 high). Initial resistance is now at 1059 (Oct 25 high) followed by 1067 (Oct 20 high).

Oil

Oil – 76.90 : Initial support at 76.40 (Intraday Support) followed by 75.22 (Intraday support). Initial resistance is now at 78.00 (previous support) followed by 80 (Major Level).

Dark Clouds Return, Dollar Gains

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was very strong as risk aversion came back into the market as concerns about CIT bankruptcy and weak personal spending -0.5% in September sent US stock markets down over 2.5%. Also of note to traders was the largest jump in the VIX index this year, up over 20% on the day. In US Stocks, DJIA +199 points closing at 9712, S&P -29 points closing at 1036 and NASDAQ -52 points closing at 2045. Looking ahead, October ISM Manufacturing is forecast at 53 vs. 52.6 previously.

European Euro

The Euro (EUR) after opening above 1.4800 in Asia the rebound stalled and profit taking turned in heavy Euro selling as US stocks fell heavily. October EU Inflation was -0.1% y/y as forecast. EU Unemployment Rate was 9.7% as forecast in September. Overall the EUR/USD traded with a low of 1.4712 and a high of 1.4858 before closing at 1.4713. Looking ahead, October PMI Manufacturing is forecast 50.7 vs. 49.3 previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was once again the strongest currency outpacing the USD as the safe haven of choice when heavy unwinding of crosses dragged the major below the Key 90 Yen level. BOJ held at 0.1% but cut back the corporate bond buying program. September Unemployment at 5.3% vs. 5.5% forecast. Overall the USDJPY traded with a low of 89.93 and a high of 91.57 before closing the day around 90.00 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) held up better than most risk currencies but was still on the back foot as GBP/JPY selling weighed. October Nationwide House Prices were at 0.4% vs. 0.9% previously. Support at 1.6500 finally gave way and the pair finished below 1.6450. Overall the GBP/USD traded with a low of 1.6410 and a high of 1.6578 before closing the day at 1.6415 in the New York session. Looking ahead, October PMI Manufacturing forecast at 50 vs. 49.5.

Australian Dollar (AUD)

The Australian Dollar (AUD) was down sharply after opening above 0.9150 but ending below the key 0.9000 level. The markets still trade the AUD with a strong correlation to equities, and even the spectra of a rate rise as Tuesday's RBA meeting failed to provide much support. Overall the AUD/USD traded with a low of 0.8980 and a high of 0.9180 before closing the US session at 0.8995.

Oil & Gold

Oil & Gold (XAU) was stronger than other commodities as fresh safe haven demand was sparked in a financial based risk aversion mood. Overall trading with a low of USD$1035 and high of USD$1049 before ending the New York session at USD$1045 an ounce. Was sold heavily on risk aversion and traders second guessing the strength of the stimulated US economy. Crude Oil was down $2.87 ending the New York session at $77.00.

Technical Analysis: Risk Aversion Returned

Euro (EUR)

Euro – 1.4730 : Initial support at 1.4683 (Oct 29 low) followed by 1.4646 (Oct 6 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 90.00 : Initial support is located at 89.93 (Oct 30 low) followed by 89.28 (Oct 15 low). Initial resistance is now at 91.82 (Oct 28 high) followed by 92.53 (Sept 21 high).

Pound Sterling (GBP)

Pound – 1.6450 : Initial support at 1.6339 (Oct 29 low) followed by 1.6252 (Oct 26 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9015 : Initial support at 0.8944 (Oct 29 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1045 : Initial support at 1026 (Sept 29 low) followed by 1024 (Sept 17 high). Initial resistance is now at 1059 (Oct 25 high) followed by 1067 (Oct 20 high).

Oil

Oil – 76.90 : Initial support at 76.40 (Intraday Support) followed by 75.22 (Intraday support). Initial resistance is now at 78.00 (previous support) followed by 80 (Major Level).

Sharp Bounce Rescues Bulls

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gave back all the gains of the previous day as the US economy emerged from recession a blistering 3.5% pace in Q3. Major stimulus programs and large rebounds in asset values all helped the economy recover. Stocks soared and risk appetite came back to life. In US Stocks, DJIA +199 points closing at 9962, S&P +23 points closing at 1066 and NASDAQ +37 points closing at 2097. Looking ahead, September Core PCE Index previously at 0.2% vs. 0.1%. Chicago PMI for October is forecast at 49 vs. 46.1 previously.

European Euro

The Euro (EUR) stabilized in Asia on solid Central Bank support before gaining with the US data back above 1.4800. Helping sentiment towards the single currency was the better than expected German unemployment change of -15k vs. +15k forecast in October. Overall the EUR/USD traded with a low of 1.4684 and a high of 1.4859 before closing at 1.4840. Looking ahead, October EU inflation is forecast at -0.1% vs. -0.3% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) weakened aggressively across the board as the downside attempt failed to break the key 90 Yen level on the USD/JPY and then a surge in US stocks sent the crosses up over 2%. AUD/JPY was up over 3% and GBP/JPY surged through the 150 Yen level. September Industrial Output Preliminary at 1.4% vs. 1.0% previously. Overall the USDJPY traded with a low of 90.25 and a high of 91.63 before closing the day around 91.35 in the New York session. Update September Unemployment at 5.3% vs. 5.5% forecast.

Pound Sterling (GBP)

The Sterling (GBP) built upon the solid base from Wednesday to gain aggressively against the Yen and the Dollar. Dealers are reporting large inflows into the UK as outside investors pick up cheap companies with the exchange rate currently so competitive. Overall the GBP/USD traded with a low of 1.6339 and a high of 1.6604 before closing the day at 1.6550 in the New York session. Looking ahead, October Nationwide House Prices previously at 0.9% m/m.

Australian Dollar (AUD)

The Australian Dollar (AUD) was the leader on the way up as the heavily battered Aussie recovered strongly in the US session. With risk appetite back on and the Rate announcement on Tuesday looming the market is once again turning bullish on the commodity currency. Overall the AUD/USD traded with a low of 0.8944 and a high of 0.9182 before closing the US session at 0.9150.

Oil & Gold

Oil & Gold (XAU) gold rallied nearly $20 an ounce as the USD broadly weakened and Oil surged. Overall trading with a low of USD$1028 and high of USD$1047 before ending the New York session at USD$1047 an ounce. Oil rebounded strongly after US data confirmed the worlds largest economy was growing again. Crude Oil was up $2.41 ending the New York session at $79.87.

Technical Analysis: Stocks Soared

Euro (EUR)

Euro – 1.4850 : Initial support at 1.4646 (Oct 6 low) followed by 1.4581 (Oct 5 low). Initial resistance is now located at 1.4859 (Oct 29 high) followed by 1.4927 (Oct 27 high)

Yen (JPY)

Yen – 91.50 : Initial support is located at 90.08 (Oct 20 low) followed by 89.28 (Oct 15 low). Initial resistance is now at 91.82 (Oct 28 high) followed by 92.53 (Sept 21 high).

Pound Sterling (GBP)

Pound – 1.6550 : Initial support at 1.6252 (Oct 26 low) followed by 1.6120 (Oct 8 low). Initial resistance is now at 1.6604 (Oct 29 high) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9150 : Initial support at 0.8866 (Oct 7 low) followed by the 0.8760 (Oct 6 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1047 : Initial support at 1024 (Sept 17 low) followed by 1000 (big figure). Initial resistance is now at 1047.85 (Oct 29 high) followed by 1067 (Oct 20 high).

Oil

Oil – 80.20 : Initial support at 80.00 (Intraday Support) followed by 78.50 (major level). Initial resistance is now at 81.10 (previous support) followed by 82.00 (Major Level).

Market Plunges, Dollar Soars

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was second only to the Yen as markets around the world were deep in the red and risk aversion came back into play. September Durable Goods Orders 1.0% vs. -2.6% previously. Hurting sentiment was the large drop in September Home Sales at 402k vs. 440k forecast. In US Stocks, DJIA -119 points closing at 9762, S&P -20 points closing at 1042 and NASDAQ -56 points closing at 2059. Looking ahead, Q3 GDP is forecast at 3.3% vs. -0.7% previously. Also released Weekly jobless claims forecast at 521k vs. 531k previously.

European Euro

The Euro (EUR) found support in Asia from sovereign buying but as US stocks continued to plunge and EUR/JPY selling intensified through the 135 level the market shunted another leg lower to the 1.4700 figure. German Import Prices were -0.9% vs. -0.6% forecast. Overall the EUR/USD traded with a low of 1.4691 and a high of 1.4841 before closing at 1.4700. Looking ahead, October German Unemployment Forecast at 8.3% vs. 8.2% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) gained across the board as traders took risky trades off the table with the mounting global equity losses. USD/JPY reversed back through 91 Yen and AUD/JPY and NZD/JPY fell over 3% each. After a large run up over the past three weeks the markets were caught long. Overall the USDJPY traded with a low of 90.55 and a high of 91.73 before closing the day around 90.60 in the New York session. Update September Industrial Output Preliminary at 1.4% vs. 1.0% previously.

Pound Sterling (GBP)

The Sterling (GBP) was surprising resilient from very heavy EUR/GBP selling through the 0.9000 level. Cable held above 1.6300 and rallied at the start of US through 1.6400 before falling as US stocks slumped. GBP/JPY succumbed to Yen strength but was not as weak as expected. Overall the GBP/USD traded with a low of 1.6286 and a high of 1.6467 before closing the day at 1.6380 in the New York session. Looking ahead, September Mortgage lending data forecast 0.8bn vs. 1.01bn previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) was crushed under risk aversion even as CPI data came in stronger than expected. Q3 CPI 1.0% vs. 0.8% forecast. Heavy selling on AUD/JPY came through in Asia and continued throughout the day. Overall the AUD/USD traded with a low of 0.8963 and a high of 0.9207 before closing the US session at 0.8970.

Oil & Gold

Oil & Gold (XAU) fell in the face of USD strength but safe haven flows stemmed the loss. Overall trading with a low of USD$1026 and high of USD$1042 before ending the New York session at USD$1029 an ounce. Fell heavily on recovery concerns. Crude Oil was down $2.09 ending the New York session at $77.46.

Technical Analysis: Market Plunges

Euro (EUR)

Euro – 1.4720 : Initial support at 1.4691 (Oct 28 low) followed by 1.4674 (Oct 9 low). Initial resistance is now located at 1.4927 (Oct 27 high) followed by 1.5063 (Oct 26 high)

Yen (JPY)

Yen – 90.70 : Initial support is located at 90.49 (Oct 21 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 Sterling (GBP)

Pound – 1.6380 : Initial support at 1.6252 (Oct 26 low) followed by 1.6120 (Oct 8 low). Initial resistance is now at 1.6467 (Oct 28 high) followed by 1.6533 (61.8% retrace 1.7043 - 1.5708).

Australian Dollar (AUD)

Australian Dollar – 0.8990 : Initial support at 0.8963 (Oct 28 low) followed by the 0.8866 (Oct 7 low). Initial resistance is now at 0.9218 (Oct 27 high) followed by 0.9329 (Oct 21 high).

Gold (XAU)

Gold – 1028 : Initial support at 1026.8 (Oct 27 low) followed by 1024 (Sep 17). Initial resistance is now at 1043 (Oct 27 high) followed by 1067 (Oct 20 high).

Oil

Oil – 77.30 : Initial support at 76.50 (Intraday Support) followed by 75 (major level). Initial resistance is now at 79 ( previous support) followed by 80.00 (Major Level).

Euro Continues lower

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was strong in general as US stocks remained on the back foot. Risk sentiment was also dented by a large fall in US consumer Confidence with October dropping to 47.7 vs. 53.4 previously. August Case-Shiller House prices rose 1.2% vs. 0.7% forecast. In US Stocks, DJIA +14 points closing at 9882, S&P -3 points closing at 1063 and NASDAQ -25 points closing at 2116. Looking ahead, September Durable Goods Orders forecast at 1% vs. -2.6% previously. Crude Oil Inventories released forecast at 1.4mln vs. 1.3mln previously.

European Euro

The Euro (EUR) took the full force of USD and Yen strength falling below 1.4800 and breaking the key 1.4840 support level. EUR/JPY also fell heavily below 136 yen. September Private Loans forecast at -0.3% was at expectations. Overall the EUR/USD traded with a low of 1.4770 and a high of 1.4928 before closing at 1.4810. Looking ahead, German Import prices forecast at -0.6% vs. 1.3% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) gained across the board on increasing risk aversion and a drop in US yields after a strong treasury auction overnight. USD/JPY slipped from the 92 figure and EUR/JPY and AUD/JPY were under pressure. Overall the USDJPY traded with a low of 91.61 and a high of 92.33 before closing the day around 92.25 in the New York session. Update September Retail Sales -1.4%, forecast at -1.6% vs. -1.8% y/y previously.

Pound Sterling (GBP)

The Sterling (GBP) continued to find strength as traders ignored the rest of the market and supported the pound. EUR/GBP continued lower after October CBI Distributive Trades are forecast at 5 vs. 3 previously, came in strong at 8. Overall the GBP/USD traded with a low of 1.6286 and a high of 1.6440 before closing the day at 1.6380 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) struggled above 0.9200 as the Euro fell and AUD/JPY also came under pressure. A rise in Oil failed to offset and the pair tested 0.9120 support again. Attention is still focused on RBA next Tuesday and CPI today. Overall the AUD/USD traded with a low of 0.9122 and a high of 0.9219 before closing the US session at 0.9160. UPDATE Q3 CPI 1.0% vs. 0.8% forecast.

Oil & Gold

Oil & Gold (XAU) was weak again testing support in the low 1030's. Overall trading with a low of USD$1032 and high of USD$1043 before ending the New York session at USD$1038 an ounce. Gained as the market rebounded from two days of heavy selling. Crude Oil was up $0.87 ending the New York session at $79.55.

Technical Analysis: EURO Broke The Key 1.4840 Support Level

Euro (EUR)

Euro – 1.4820 : Initial support at 1.4770 (Oct 27 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 (JPY)

Yen – 91.70 : Initial support is located at 91.18 (Oct 23 low) followed by 90.49 (Oct 21 low). Initial resistance is now at 92.53 (Sept 21 high) followed by 93.3 (Sept 7 high).

Pound Sterling (GBP)

Pound – 1.6380 : Initial support at 1.6241 (Oct 19 low) followed by 1.6120 (Oct 8 low). Initial resistance is now at 1.6533 (61.8% retrace 1.7043 - 1.5708) followed by 1.6693 (Oct 23 high).

Australian Dollar (AUD)

Australian Dollar – 0.9170 : 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 (XAU)

Gold – 1040 : Initial support at 1024 (Sep 17 low) followed by 1000 (Big Figure). Initial resistance is now at 1067 (Oct 20 high) followed by 1070 (Oct 14 high).

Oil

Oil – 79.70 : Initial support at 78.00 (Intraday Support) followed by 77.50 (Intraday support). Initial resistance is now at 80.00 ( Major Level) followed by 82.00 (October High).

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.

For the week starting 26/10/09.

This 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 Analysis: USD Lost Ground Against The Euro And Aussie

Euro (EUR)

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 (JPY)

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 Sterling (GBP)

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 (AUD)

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 (XAU)

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

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).