FOMC Minutes show US rate cuts may continue
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) rallied late in the day as US equities weakened considerable into the US close. 8000 was once again tested on the Dow and the market closed close to this level as Citibank slumped and concerns over GM and Jobs rattled investors. October CPI dropped -0.8% vs. 0.0 expected. Also released October Housing starts were slightly better than expected at 791K vs. 780K forecast but still very weak. Also released the FOMC minutes from the last meeting showed that some members are still open to further rate cuts. In U.S. share markets, the NASDAQ was down 96.85 points (-6.53%) and the Dow Jones was down 427.47 points (-5.07%). Crude Oil closed down -$0.77 ending the New York session at $54.25 per barrel. Looking ahead, Weekly Jobless claims are seen at 505K vs. 516K last week. Also released Philadelphia Fed is seen down at -35 vs. -37.5.
European Euro
The Euro (EUR) traded in an extremely volatile manner following the equities markets closely. After some poor data out from the US the Euro surges to resistance at 1.28 before falling back to 1.25 as US stocks fell heavily. Large EUR/JPY selling weighed going into the close. Overall the EUR/USD traded with a low of 1.2475 and a high of 1.2813 before closing the day at 1.2515 in the New York session. Looking ahead, German PPI is expected to fall -0.6% in October.
Japanese Yen (JPY)
The Japanese Yen (JPY) gained heavily as risk aversion spiked through the roof on concerns Citibank is under pressure and may need, the market sent the companies shares 23% lower and the Dow below 8000. Strong support is expected towards 95 with market wary of any BoJ buying to support the USD/JPY. Crosses were very week giving up day gains and some more on the stock losses. Overall the USDJPY traded with a low of 95.59 and a high of 97.09 before closing the day around 95.80 in the New York session. UPDATE Trade Balance in October turned negative surprising forecasts at -63.9 Bn vs. +80 Bn.
Pound Sterling (GBP)
The Sterling (GBP) had a very interesting day with heavy middle eastern buying early in the day pushing the recovery up to 1.5250 before crashing back to below 1.5000 as US stocks extended their losses into the close. UK data beat expectations with CBI trends at -38 beating -41 expected. Overall the GDP/USD traded with a low of 1.4905 and a high of 1.5248 before closing the day at 1.4960 in the New York session. Looking ahead, October Retail Sales are seen -0.9% in October vs. -0.4% last month.
Australian Dollar (AUD)
The Australian Dollar (AUD) tracked the majors, recovering all day until fresh US stock losses force the AUD to new lows on the day back towards the .6350 support level were the RBA has been seen buying to help add liquidity to the market. Oil continues to make new lows and this is undermining the commodity complex. Overall the AUD/USD traded with a low of 0.6362 and a high of 0.6595 before closing the US session at 0.6400.
Gold
Gold (XAU) rose with the majors before falling sharply as the USD regained strength. Gold have been trading in a range between 700 and 760 for 3 week now. Falling Oil is undermining support. Overall trading with a low of USD$731.65 and high of USD$748.95 before ending the New York session at USD$738 an ounce.
Technical Analysis: US Rate Cuts May Continue
Euro (EUR)
Euro – 1.2515 : Initial support at 1.2513 (Nov 19 low) followed by 1.2389 (Nov 13 low). Initial resistance is now located at 1.2814 (Nov 19 low) at followed by 1.2855 (Nov 13 high)
Yen (JPY)
Yen – 95.80 : Initial support is located at 95.67 (Nov 18 low) followed by 94.48 (Nov 12 low). Initial resistance is now at 97.55 (Nov 17 high) followed by 98.19 (Nov 13 high).
Pound Sterling (GBP)
Pound – 1.4980 : Initial support at 1.4901 (Nov 18 low) followed by 1.4647 (Nov 17 low). Initial resistance is now at 1.5249 (Nov 17 high) followed by 1.5366 (38.2% retrace 1.6672 to 1.4558).
Australian Dollar (AUD)
Australian Dollar – 0.6390 : Initial support at 0.6362 (Nov 19 low) followed by the 0.6339 (Oct 29 low). Initial resistance is now at 0.6596 (Nov 17 high) followed by 0.6696 (Nov 14 high).
Gold (XAU)
Gold – 737 : Initial support at 725.40 (Nov 14 low) followed by 700 (Nov 13 low). Initial resistance is now at 762 (Nov 19 high) followed by 768.21 (Nov 10 high).
