Concerns over US consumers weigh on Stocks
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) found strength in adversity gaining against most currencies on the back of increased risk aversion. Safe haven flows and deleveraging continued to offer strong short term support for the USD. News that GM would need a bailout before the end of the year left stocks very weak. Also of note was a new Home borrower plan launched by Fannie and Freddie to stem foreclosures. In the U.S. share markets, the NASDAQ was down 35 points (-2.22%) and the Dow Jones was down 176 points (-1.99%). Crude Oil closed down $59.33 ending the New York session at $59.33 per barrel.
European Euro
The Euro (EUR) fell heavily after Oil broke below $60 a barrel and US stocks slumped. Support at 1.27 gave way and the Euro slumped to the next key level at 1.25. The German ZEW economic survey beat expectations at -53.5 vs. -62 expected. Weak stocks lead to pressure via heavy EUR/JPY selling. Overall the EUR/USD traded with a low of 1.2509 and a high of 1.2799 before closing the day at 1.2540 in the New York session. Looking ahead, September Industrial Output are seen -1.3% and Orders -0.9%.
Japanese Yen (JPY)
The Japanese Yen (JPY) was a big gainer against most currencies as risk aversion notched another level higher. Gains against USD/JPY were limited as USD strength and Japanese investment demand kept the downside contained. AUD/JPY and EUR/JPY came under pressure. Overall the USDJPY traded with a low of 97.33 and a high of 98.28 before closing the day around 97.60 in the New York session.
Pound Sterling (GBP)
The Sterling (GBP) came under severe pressure as EUR/GBP pushed for record highs above .8200. USD strength and comments from PM Brown on unfunded UK stimulus plan comments weighed. The Break below 1.55 opens up year lows at 1.5250 and the key downside target of 1.5000. Overall the GDP/USD traded with a low of 1.5354 and a high of 1.5702 before closing the day at 1.5380 in the New York session. Looking ahead, October Claimant Count is expected at 40K vs. 31.8 and the September ILO Unemployment Rate is expected at 5.8% vs. 5.7% previously.
Australian Dollar (AUD)
The Australian Dollar (AUD) weighed down by multiple negative factors. Business confidence fell by the most in its 19 year history to -29. Commodities fell heavily throughout the day and risk aversion also spiked on heavy stock falls. AUD/JPY selling dragged the Aussie lower against the USD but other crosses held up relatively well. Overall the AUD/USD traded with a low of 0.6478 and a high of 0.6755 before closing the US session at 0.6555. UPDATE Westpac Consumer Confidence gains 4.3% in November
Gold
Gold (XAU) fell inline with Oil as investors liquidated the precious metal for cash demands. Overall trading with a low of USD$727.70 and high of USD$750.05 before ending the New York session at USD$732 an ounce.
Technical Analysis: Concerns Over US Consumers
Euro (EUR)
Euro – 1.2505 : Initial support at 1.2330 (Oct 28 low) followed by 1.2134 (50% retracement of 0.8229-1.6038 major rally). Initial resistance is now located at 1.28 (Nov 11 High) at followed by 1.2956 (Nov 6 high)
Yen (JPY)
Yen – 97.25 : Initial support is located at 96.77 (Nov 7 low) followed by 96.36 (Oct 31 low). Initial resistance is now at 99.48 (Nov 10 high) followed by 99.92 (Nov 5 high).
Pound Sterling (GBP)
Pound – 1.5350 : Initial support at 1.5269 (Nov 7 low) followed by 1.5000 (Oct 28 low). Initial resistance is now at 1.5402 (Nov 10) followed by 1.5702 (Nov 5).
Australian Dollar (AUD)
Australian Dollar – 0.6555 : Initial support at 0.6546 (Nov 7 low) followed by the 0.6339 (Oct 29 low). Initial resistance is now at 0.6758 (Nov 11 high) followed by 0.7015 (Nov 4 high).
Gold (XAU)
Gold – 731.00 : Initial support at 726.59 (Nov 7) followed by 717.69 (Oct 31 low). Initial resistance is now at 770 (Nov 5 high) followed by 777.5 (Oct 30 Level).
