US stocks extend slump, USD extends rally

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) strengthened on the back of rising risk aversion as stocks came under severe selling pressure. New 11 ½ year lows on the S&P were seen as concerns about the looming recession weighed. Weekly Jobless Claims jumped to 542K vs. 505K expected. Also released Philadelphia Fed in November seen at -39.3 vs. -35 expected. Adding to USD strength was the large slump in Oil below the critical $50 a barrel support. In U.S. share markets, the NASDAQ was down 70 points (-5.07%) and the Dow Jones was down 444 points (-5.56%). Crude Oil closed down -$4.45 ending the New York session at $49.65 per barrel.

European Euro

The Euro (EUR) held to a tight range as traders concentrated on other currencies that offered more action. 1.2500 has proven a key level that the Euro has gravitated around. Large falls in Oil and stocks finally forced the pair lower into the US close. Overall the EUR/USD traded with a low of 1.2475 and a high of 1.2812 before closing the day at 1.2480 in the New York session. Looking ahead, November Germany PMI Services is expected to fall to 47.5 vs. 48.3.

Japanese Yen (JPY)

The Japanese Yen (JPY) strengthened against the USD/JPY as the US stocks hit multi year lows and risk aversion continued to dominate trading. AUD/JPY and GBP/JPY weakened over 5% and remained of a very weak footing going into Asia. Traders are still wary of any Bank of Japan Yen selling to stem the rapid rise. 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. Looking Ahead, BOJ rate Decision widely expected to remain on hold.

Pound Sterling (GBP)

The Sterling (GBP) Extended losses below 1.50 as Oil dropped below $50 a barrel. The market is still extremely bearish on the UK economy which combined with fresh stock weakness undermined the already fragile support. October Retails Sales beat expectations at -0.1% vs. -0.9% forecast. Overall the GDP/USD traded with a low of 1.4716 and a high of 1.4993 before closing the day at 1.4770 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) came under severe pressure after the Key level that was twice supported by the Reserve Bank of Australia at .6350 broke. The Pair quickly fell to lows of 0.6200 and as commodities slid the AUD continued to be pummeled. As US stocks Crashed the near perfect storm took AUD another leg lower under 0.6100 and close to the year lows at .6010. AUD/JPY was a major catalyst in the move lower as it broke key support at 60 Yen. Overall the AUD/USD traded with a low of 0.6077 and a high of 0.6415 before closing the US session at 0.6100.

Gold

Gold (XAU) struggled for direction as safe haven buying of the precious metal was countered by falling commodities. Overall trading with a low of USD$735.30 and high of USD$752.80 before ending the New York session at USD$746 an ounce.

Technical Analysis: USD Extends Rally

Euro (EUR)

Euro – 1.2445 : Initial support at 1.2435 (Nov 20 low) followed by 1.2389 (Nov 13 low). Initial resistance is now located at 1.2564 (Nov 20 high) at followed by 1.2814 (Nov 19 high)

Yen (JPY)

Yen – 94.00 : Initial support is located at 93.62 (Nov 20 low) followed by 93.2 (Nov 12 low). Initial resistance is now at 96.23 (Nov 20 high) followed by 97.55 (Nov 17 high).

Pound Sterling (GBP)

Pound – 1.4750 : Initial support at 1.4713 (Nov 20 low) followed by 1.4647 (Nov 17 low). Initial resistance is now at 1.4994 (Nov 20 high) followed by 1.5249 (Nov 19 high).

Australian Dollar (AUD)

Australian Dollar – 0.6110 : Initial support at 0.6077 (Nov 19 low) followed by the 0.6009 (Oct 27 low). Initial resistance is now at 0.6416 (Nov 20 high) followed by 0.6596 (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).

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).

Recession in Europe, Weak US Retail Figures

Last week’s Currency Trading Review

The Dollar had a volatile week but gained against most currencies as the world economic picture continued to deteriorate. The sharp fall in October Retail Sales by 2.8% was worse than the market was expecting and confirmed that the US is heading into a recession. Also in the news Treasury Secretary Paulson modified the TARP $700 Billion program away from toxic assets and more towards freeing up consumer credit. The G20 met over the weekend and released a statement that endorsed further domestic stimulus plans but was very little on actually substance. The Euro tracked stocks lower while also being weighed by weak economic data. German GDP slipped 0.5% in the Q3 dragging the Euro zone into a recession. The German Economic Sentiment Survey did bounce though to -54 from -63 as rate cuts improved consumer sentiment. The EUR/USD lost 0.9% closing at 1.2602, after opening the week at 1.2719. The Japanese Yen strengthened as stock losses mounted before the dramatic 900 point Dow rally on Thursday sent the USD/JPY and crosses significantly higher. The USD/JPY lost -1.18% closing at 97.08 after opening at 98.23. The GBP was the weakest currency last week as testimony from Governor King stated that the BoE is prepared to cut if is necessary. Inflation is expected to drop significantly and may fall into deflationary territory next year. GDP forecasts were also slashed but are not expected to turn negative. The GBP/USD lost -6.14% closing at 1.4734 after opening at 1.5638. The AUD was hurt by falling Oil and a rise in risk aversion. The RBA released its quarterly Monetary Policy Statement and expected Inflation to fall back to its target range of 2-3% by mid 2011. Also weighing the record drop in the Business Survey to -29 its lowest level on record. The AUD/USD closed down -4.01% at 0.6476 after opening at 0.6736.

For the week starting 17/11/08.

This Forex Trading Week Preview

In the States; Inflation data will be in the spotlight this week. On Tuesday we have October PPI expected at -1.8%m/m vs. -0.4% previously. On Wednesday we have October CPI seen at 4.1% y/y vs. 4.9% previously. Also on Wednesday we have October Housing starts expected to fall to 780K vs. 817K previously. Finally the FOMC delivers it Minutes form the Oct meeting. On Thursday we have weekly Jobless claims seen at 508K vs. 516K last week. Treasury’s Paulson is scheduled to speak on the economy. On Friday we have Fed’s Bullard, Lacker, Plosser and Evans expected to speak. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; light data week with the PMI surveys the most important. On Friday we have November German Services PMI expected at 42 vs. 42.9 previously. Also released the German Manufacturing PMI expected at 47.8 vs. 48.3 previously. Also released later on Firday the Eurozone PMI’s for services and manufacturing expected at 45.2 and 40.5 respectively. During the week there are multiple officials speaking. On Tuesday Trichet is speaking and on Friday Weber and Gonzalez are scheduled to speak. In the UK; On Tuesday the October CPI is released expected to drop to 4.9% vs. 5.2% previously. On Wednesday the Bank of England releases the minutes from there last meeting were they cut rates by 1.5%. Finally on Thursday we have October Retail Sales expected at -0.8% vs. -0.4% last month. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Monday Q3 Preliminary GDP is seen at 0.0 vs. -0.7% previously. On Friday the BoJ meets to discuss rates and are widely expected to hold at 0.3%. We will provide our previews and reviews of these data releases in the daily summary.

In Australia; On Monday Real Retail Sales for Q3 are expected at 0.5% vs. -0.6% previously. On Tuesday the RBA minutes from November meeting were they cut 0.75%. On Wednesday RBA Governor Stevens is scheduled to speak. We will provide our previews and reviews of these data releases in the daily summary.

Technical Analysis: Weak US Retail Figures

Euro (EUR)

Euro – 1.2540 : Initial support at 1.2389 (Nov 13 low) followed by 1.2333 (Oct 28 low). Initial resistance is now located at 1.2855 (Nov 13 low) at followed by 1.2930 (Nov 10 high)

Yen (JPY)

Yen – 95.95 : Initial support is located at 94.48 (Nov 12 low) followed by 93.20 (76.4% retracement of 90.92-100.57 rally). Initial resistance is now at 98.19 (Nov 13 high) followed by 99.48 (Nov 10 high).

Pound Sterling (GBP)

Pound – 1.4660 : Initial support at 1.4558 (Nov 13 low) followed by 1.4393 (Range protection). Initial resistance is now at 1.4992 (Nov 14 high) followed by 1.5481 (Nov 12 high).

Australian Dollar (AUD)

Australian Dollar – 0.6375 : Initial support at 0.6339 (Oct 29 low) followed by the 0.6246 (76.4% retracement of 0.6009-0.7015 rally). Initial resistance is now at 0.6484 (Nov 14 low) followed by 0.6696 (Nov 14 high).

Gold (XAU)

Gold – 743 : Initial support at 700 (Nov 13 low) followed by 682 (Oct 24 low). Initial resistance is now at 753 (Nov 12 high) followed by 768.21 (Nov 10 high).

Citibank to Cut 50 000 Jobs, Economic Worries Persist

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was broadly weaker as most majors led by the Pound were able to rebound as US stocks initially rallied. Ongoing Economic concerns and fears of a deep recession lead to a late sell off and Dollar losses were pared. Supporting the USD was ongoing commodity weakness. October Industrial Production surprised to the upside recovering from a -2.8% plunge last month to post a +1.3% rise. In U.S. share markets, the NASDAQ was down 34.8 points (-2.29%) and the Dow Jones was down 223.73 points (-2.63%). Crude Oil closed down $2.09 ending the New York session at $54.95 per barrel. Looking ahead, October PPI is seen falling -1.8% m/m vs. -0.4% previously.

European Euro

The Euro (EUR) was generally well supported during the Asian and European sessions, extending these gains as US stocks turned positive. The late Dow sell off pared gains but the pair was still well supported at 1.2650. EUR/GBP was one pair that gave up a lot of ground as the market bought the beaten down pound. The September EU trade balance expectations coming at -5.6Bn vs. -7.3Bn forecast. Overall the EUR/USD traded with a low of 1.2515 and a high of 1.2741 before closing the day at 1.2650 in the New York session.

Japanese Yen (JPY)

The Japanese Yen (JPY) initially supported as the market opened after the G20 meeting over the weekend. The meeting was viewed as rather underwhelming response to the market crisis. As Asian stocks turned around most crosses and USD/JPY steadily rose. Overall the USDJPY traded with a low of 96.04 and a high of 97.54 before closing the day around 96.70 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) rebounded most of the day as the buyers swooped on levels not seen since 2003 and technically was oversold. The bearish backdrop of the UK economy continues to cast a dark shadow on the Pound as it struggled past 1.5000. EUR/GBP selling helped to underpin the gains. Overall the GDP/USD traded with a low of 1.4661 and a high of 1.45081 before closing the day at 1.5000 in the New York session. Looking ahead, October CPI is seen at 0.1% vs. 0.5% previously.

Australian Dollar (AUD)

The Australian Dollar (AUD) was relatively buoyant after a steep sell off at the open as Asian stocks lifted off lows. Q3 Retail Sales were weak at 0.1% vs. 0.5% forecast. Capping gains were weak commodities and a late Dow sell off. Traders are weary of speculation that the RBA is buying around the 0.6350 area and this is helping to dampen speculator interest to the downside. Overall the AUD/USD traded with a low of 0.6382 and a high of 0.6597 before closing the US session at 0.6490. Looking ahead, RBA Minutes are released today from the November Meeting in which they cut 0.75%.

Gold

Gold (XAU) was on the back foot as Oil continued to slide. The market is unsure of the future direction with predictions varying from $600 to $1200 an ounce over the next year. 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: Economic Worries Persist

Euro (EUR)

Euro – 1.2650 : Initial support at 1.2513 (Nov 17 low) followed by 1.2389 (Nov 13 low). Initial resistance is now located at 1.2742 (Nov 17 low) at followed by 1.2855 (Nov 13 high)

Yen (JPY)

Yen – 96.45 : Initial support is located at 95.88 (Nov 17 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 – 1.5000 : Initial support at 1.4647 (Nov 17 low) followed by 1.4558 (Nov 13 low). Initial resistance is now at 1.5083 (Nov 17 high) followed by 1.5366 (38.2% retrace 1.6672 to 1.4558).

Australian Dollar (AUD)

Australian Dollar – 0.6510 : Initial support at 0.6339 (Oct 29 low) followed by the 0.6246 (76.4% retracement of 0.6009-0.7015 rally). 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 754.55 (Nov 14 high) followed by 768.21 (Nov 10 high).

Weak US retail Sales Hurt Market Sentiment

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) was strong heading into the weekend as US stocks ended very weak on the back of slumping Retail Sales. October Retail Sales were worse than expected at -2.8% vs. -2.0%m/m. The USD is currently benefiting from the market turmoil as investors demand for the worlds reserve currency is significantly boosted. Also released on Friday, November UoM Consumer Sentiment which rose slightly to 57.9 from 57.6 previously. In U.S. share markets, the NASDAQ was down 79 points (-5.00%) and the Dow Jones was down 337 points (-3.82%). Crude Oil closed down $1.20 ending the New York session at $57.04 per barrel. Looking ahead, October Industrial Output seen at 0.2% vs. -2.8%.

European Euro

The Euro (EUR) was hurt by the confirmation of a Eurozone recession with Q3 GDP at -0.2%. Also confirmed the EU CPI in October at 3.2% Y/Y rate. The EUR/USD was sold off late in the US session as stocks slumped into the close but had climbed for most the day on the back of weak US data. Overall the EUR/USD traded with a low of 1.2613 and a high of 1.2825 before closing the day at 1.2690 in the New York session. Looking ahead, EU trade is seen at -7.3 Bn in September.

Japanese Yen (JPY)

The Japanese Yen (JPY) gave up most of Thursdays gains as the market paired stock gains into the weekend ahead of the G20 meeting over the weekend. The late Dow selloff sent most of the crosses to near day lows. Overall the USDJPY traded with a low of 96.10 and a high of 98.08 before closing the day around 97.10 in the New York session. Looking Ahead, preliminary Q3 GDP seen at 0.1% vs. -0.7% previously.Update Q3 GDP released at -0.1%

Pound Sterling (GBP)

The Sterling (GBP) continued to be extremely well offered with the pair losing ground as the UK faces a near certain recession. Concerns over the plummeting Pound has lead to comments over the weekend from Shadow Chancellor Osborne that he fears a run on the Pound. PM Brown has dismissed the comments, countering that the UK public debt is still not as highs as some European countries. Overall the GDP/USD traded with a low of 1.4661 and a high of 1.4956 before closing the day at 1.4790 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) tracked Equities with the AUD falling steadily from the highs seen on Thursday. A brief rally was seen on poor US data until stock weakness late in the US session saw the Aussie back at lows. Overall the AUD/USD traded with a low of 0.6512 and a high of 0.6694 before closing the US session at 0.6540. Looking ahead, Q3 Retail Sales.

Gold

Gold (XAU) gained after weak US data and remained supported as the market factored in more US rate cuts to stoke demand. Overall trading with a low of USD$725 and high of USD$755 before ending the New York session at USD$745 an ounce.

Technical Analysis: Weak US Retail Sales

Euro (EUR)

Euro – 1.2540 : Initial support at 1.2389 (Nov 13 low) followed by 1.2333 (Oct 28 low). Initial resistance is now located at 1.2855 (Nov 13 low) at followed by 1.2930 (Nov 10 high)

Yen (JPY)

Yen – 95.95 : Initial support is located at 94.48 (Nov 12 low) followed by 93.20 (76.4% retracement of 90.92-100.57 rally). Initial resistance is now at 98.19 (Nov 13 high) followed by 99.48 (Nov 10 high).

Pound Sterling (GBP)

Pound – 1.4660 : Initial support at 1.4558 (Nov 13 low) followed by 1.4393 (Range protection). Initial resistance is now at 1.4992 (Nov 14 high) followed by 1.5481 (Nov 12 high).

Australian Dollar (AUD)

Australian Dollar – 0.6375 : Initial support at 0.6339 (Oct 29 low) followed by the 0.6246 (76.4% retracement of 0.6009-0.7015 rally). Initial resistance is now at 0.6484 (Nov 14 low) followed by 0.6696 (Nov 14 high).

Gold (XAU)

Gold – 743 : Initial support at 700 (Nov 13 low) followed by 682 (Oct 24 low). Initial resistance is now at 753 (Nov 12 high) followed by 768.21 (Nov 10 high).

Late Dow Surge Reverse Mood and Direction

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) USD gave up a lot the strength at the end of the US session as the Dow Jones rallied over 900 points off lows. Weekly Jobless claims rose above 500K to 516K vs. 484K expected. Also Released September International Trade at -56Bn vs. -59Bn previously. The majors are tracking movement in US equities very closely so when the Dow dropped below 8000 the USD was at maximum strength. The U.S. share markets, the NASDAQ was up 97 points (6.50%) and the Dow Jones was up 552 points (6.67%). Crude Oil closed up $2.08 ending the New York session at $58.20 per barrel. Looking ahead, October Retail Sales are expected to fall -2% vs. -1.2% previously. Import Prices are expected to have fallen -4.2%. November University of Michigan Consumer Sentiment is expected at 56 vs. 57.6 previously.

European Euro

The Euro (EUR) had a very interesting trading day initially underwater and on a very weak footing below 1.2500. Germany was confirmed to be in recession with Q3 GDP seen at -0.5% vs. -0.4%. Initially the Euro was very weak after this data but as stocks surged higher so did the Euro which rallied above resistance at 1.2800. Overall the EUR/USD traded with a low of 1.2391 and a high of 1.2857 before closing the day at 1.2810 in the New York session. Looking ahead, October CPI is expected at -0.2% vs. -0.1%. Eurozone GDP is seen at -0.2% in Q3.

Japanese Yen (JPY)

The Japanese Yen (JPY) had another extremely volatile day as the markets mood turns from bleak to glee in the final hours of trading. USD/JPY traded over 3 big figures higher to the upside. The EUR/JPY and AUD/JPY were extremely buoyant. Focus will be on the G20 meeting over the weekend for the next direction in the Yen. Overall the USDJPY traded with a low of 94.82 and a high of 98.26 before closing the day around 97.80 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) broke with the normal correlations seen as Sterling was unable to gain as Equities surged higher. The market has turned extremely bearish against the Pound lately and things are not likely to get better going forward unless things change considerably. Almost all currencies gained against the pound yesterday, especially its major trading partner in Europe which hit record levels above .8600. Overall the GDP/USD traded with a low of 1.4561 and a high of 1.4991 before closing the day at 1.4902 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) rallied nearly all day as traders were very tentative about testing below .6350 as the Reserve bank of Australia was reportedly on the bid down there. Liquidity is still very low and moves are exaggerated. Commodities rebounded and this helped to underpin the move higher late in the US session. Overall the AUD/USD traded with a low of 0.6341 and a high of 0.6694 before closing the US session at 0.6650.

Gold

Gold (XAU) Climbed as Oil jumped higher but is not as precious as it use to be in a world seen heading into a low inflationary state. Overall trading with a low of USD$702.25 and high of USD$739.55 before ending the New York session at USD$736 an ounce.

Technical Analysis: Dow Surge

Euro (EUR)

Euro – 1.2745 : Initial support at 1.2438 (Nov 13 low) followed by 1.2333 (Oct 28 low). Initial resistance is now located at 1.2855 (Nov 13 low) at followed by 1.2930 (Nov 10 high)

Yen (JPY)

Yen – 97.15 : Initial support is located at 94.48 (Nov 12 low) followed by 93.20 (76.4% retracement of 90.92-100.57 rally). Initial resistance is now at 98.08 (Nov 12 high) followed by 99.48 (Nov 10 high).

Pound Sterling (GBP)

Pound – 1.4820 : Initial support at 1.4558 (Nov 13 low) followed by 1.4393 (Range protection). Initial resistance is now at 1.4992 (Nov 1 high) followed by 1.5481 (Nov 12 high).

Australian Dollar (AUD)

Australian Dollar – 0.6590 : Initial support at 0.6339 (Oct 29 low) followed by the 0.6246 (76.4% retracement of 0.6009-0.7015 rally). Initial resistance is now at 0.6758 (Nov 11 high) followed by 0.6986 (Nov 10 high).

Gold (XAU)

Gold – 729 : Initial support at 700 (Nov 13 low) followed by 682 (Oct 24 low). Initial resistance is now at 739 (Nov 12 high) followed by 750.45 (Nov 11 high).

Paulson changes Bailout Plan, Market Crashes

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) gained heavily against the higher yielding currencies as US stocks spiraled lower for the third day as the Treasury announced changes to the $700 Billion Bailout plan. The modifications were to buy less troubled assets and instead invest in consumer credit availability. Auto-makers were also ignored in this plans new direction. In the U.S. share markets, the NASDAQ was down -81 points (-5.17%) and the Dow Jones was down -411 points (-4.73%). Crude Oil closed down $3.17 ending the New York session at $56.16 per barrel. Looking ahead, weekly jobless claims are expected 484K vs. 481K previously. Also released September Trade Balance expected at -57Bn vs. -59Bn previously.

European Euro

The Euro (EUR) held up remarkable well considering the USD strength and massive losses seen in other currencies around the world. The 1.2500 proved a strong and stable support with looks below being repelled on multiple occasions throughout the day. With US stocks ending very weak and Oil falling over $3 a barrel the Euro is on weak footing heading into Asia. September Industrial output weakened to -1.6% vs. -1.3% expected. Overall the EUR/USD traded with a low of 1.2439 and a high of 1.2631 before closing the day at 1.2510 in the New York session. Looking ahead, German Q3 GDP is expected -0.2% vs. -0.5% previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) was the strongest currency yesterday as investors rushed out of carry trades. USD/JPY finally gave up ground when support at .9700 was broken. As US stocks extended losses the Yen continued to strengthen especially against the GBP and AUD. Overall the USDJPY traded with a low of 94.50 and a high of 98.06 before closing the day around 95.40 in the New York session. Update October Corporate Goods Price at -1.6%.

Pound Sterling (GBP)

The Sterling (GBP) was the weakest currency yesterday as Claimant Count Change remained at high levels of 36.5K in October and Governor King talked of Recession and possible deflation in the UK. Slowing Inflation has opened up the door for more aggressive rate cuts going forward. EUR/GBP reach new record levels above .83 as GBP losses outpaced the Euro. Overall the GDP/USD traded with a low of 1.4835 and a high of 1.5482 before closing the day at 1.4920 in the New York session.

Australian Dollar (AUD)

The Australian Dollar (AUD) broke below support at .6500 as equity and Oil losses mounted. RBA buying at the lows of .6350 was confirmed by the bank and this helped to cap losses. AUD/JPY was under severe pressure as risk aversion soared. Overall the AUD/USD traded with a low of 0.6350 and a high of 0.6662 before closing the US session at 0.6380.

Gold

Gold (XAU) fell inline with Oil for a second day head as traders liquidated all commodities. Overall trading with a low of USD$709.9 and high of USD$738.75 before ending the New York session at USD$712 an ounce.

Technical Analysis: Paulson Changes Bailout Plan

Euro (EUR)

Euro – 1.2465 : 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 1.2468 (Nov 12 low) at followed by 1.2800 (Nov 11 high)

Yen (JPY)

Yen – 95.70 : Initial support is located at 94.48 (Nov 12 low) followed by 93.20 (76.4% retracement of 90.92-100.57 rally). Initial resistance is now at 98.08 (Nov 12 high) followed by 99.48 (Nov 10 high).

Pound Sterling (GBP)

Pound – 1.4915 : Initial support at 1.4895 (Nov low) followed by 1.4842 (Oct 2001 high). Initial resistance is now at 1.5481 (Nov 12 high) followed by 1.5703 (Nov 11 high).

Australian Dollar (AUD)

Australian Dollar – 0.6405 : Initial support at 0.6339 (Oct 29 low) followed by the 0.6246 (76.4% retracement of 0.6009-0.7015 rally). Initial resistance is now at 0.6663 (Nov 1 high) followed by 0.6758 (Nov 11 high).

Gold (XAU)

Gold – 713 : Initial support at 710 (Nov 12 low) followed by 707.5 (Oct 27 low). Initial resistance is now at 750 (Nov 11 high) followed by 770 (Nov 5 high).

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).

GM fears overshadow China Stimulus Plan

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) started the week extremely well offered as world markets absorbed news released over the weekend that China was implementing a US$585bn stimulus plan to help growth remain at elevated levels in the world’s most populous nation. The goodwill generated couldn’t be sustained into the US session as news of Circuit City’s bankruptcy and large falls in GM and Google sent US stocks spiraling lower. In the U.S. share markets, the NASDAQ was down 30 points (-1.86%) and the Dow Jones was down 73 points (-0.82%). Crude Oil closed up $1.37 ending the New York session at $62.41 per barrel. Looking ahead, November Economic Sentiment previously at 41.1.

European Euro

The Euro (EUR) gained on surging Oil in Asia and improved risk sentiment. The gains into 1.29’s were very limited and as US stocks reversed direction the Euro fell heavily to 1.27 supports. November Sentix fell -36.4 vs. -34 forecast. Overall the EUR/USD traded with a low of 1.2721 and a high of 1.2926 before closing the day at 1.2760 in the New York session. Looking ahead, German September Trade Balance expected at -8Bn vs. -8.2Bn previously. Also released the November German Zew Economic Survey expected at -62 vs. -63 previously

Japanese Yen (JPY)

The Japanese Yen (JPY) was moved by equities and initially sold across the board as crosses surged higher on the China news. USD/JPY stalled in the mid 99’s hurting the overall technical picture as the pair once again failed to get past the key 100 level. As US stocks felt the weight of GM the USD fell quickly and the JPY gained. Overall the USDJPY traded with a low of 97.63 and a high of 99.47 before closing the day around 98.00 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) tracked the Euro but was first to fail on the topside as economic data from England shows a slump in PPI numbers. October PPI slumped -5.6% vs. -2.6%. This large drop in inflation pressure should allow further cuts form the Bank of England and further undermines the Pound. Overall the GDP/USD traded with a low of 1.5578 and a high of 1.5883 before closing the day at 1.5660 in the New York session. Looking ahead, October BRC Retail Sale previously -1.5%.

Australian Dollar (AUD)

The Australian Dollar (AUD) was one of the major gainers on China news as demand for Australia’s resources are expected to remain strong. Large gains in Metals and stocks also helped to underpin. Moderating the mood was a lowering of the growth outlook from the RBA and a drop in home financing. The mood darkened in the US as markets absorbed the dire GM and Google news. Overall the AUD/USD traded with a low of 0.6653 and a high of 0.6984 before closing the US session at 0.6726.

Gold

Gold (XAU) took advantage of the large gains in Oil to jump above resistance at $750 but was unable to make further gains as US couldn’t hold equity gains. Overall trading with a low of USD$738.8 and high of USD$767.8 before ending the New York session at USD$745 an ounce.

Technical Analysis: China Stimulus Plan

Euro (EUR)

Euro – 1.2760 : Initial support at 1.2710 (Nov 10 low) followed by 1.2652 (Nov 7 low). Initial resistance is now located at 1.2956 (Nov 6 High) at followed by 1.3116 (76.4% retrace 1.3298 to 1.2526)

Yen (JPY)

Yen – 97.95 : Initial support is located at 97.61 (Nov 10 low) followed by 96.36 (Oct 31 low). Initial resistance is now at 99.92 (Nov 5 high) followed by 100.57 (Oct 22 high).

Pound Sterling (GBP)

Pound – 1.5640 : Initial support at 1.5537 (Nov 7 low) followed by 1.5402 (Oct 28 low). Initial resistance is now at 1.5885 (Nov 10) followed by 1.6197 (Nov 5).

Australian Dollar (AUD)

Australian Dollar – 0.6725 : Initial support at 0.6652 (Nov 10 low) followed by the 0.6546 (Nov 7 low). Initial resistance is now at 0.7015 (Nov 4 high) followed by 0.7065 (Oct 20 high).

Gold (XAU)

Gold – 744 : Initial support at 718 (61.8% retrace 777.90-682.41) followed by 707 (Oct 27 low). Initial resistance is now at 777.5 (Oct 30 high) followed by 803.65 (Oct 21 Level).

US Jobs fall 240 000 in October

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) had a mixed day with the strong uptrend put on hold by terrible unemployment data. October Nonfarm Payrolls dropped -240K vs. -200k expected and the Unemployment rate jumped to 6.5%. Pending Home Sales fell -4.6% above the -3.4% forecast. After two days of heavy losses on the stockmarket investors shrugged off the data and sent stocks higher into the weekend. In the U.S. share markets, the NASDAQ was up 38.70 points (2.41%) and the Dow Jones was up 248 points (2.85%). Crude Oil closed up $0.27 ending the New York session at $61.04 per barrel.

European Euro

The Euro (EUR) was under pressure initially during Asia but as Tokyo stocks turned around so did the Euros fortunes. The strength was maintained as US data was very weak and Stocks held gains. German Industrial production was worse than expected at -3.6% in September. Overall the EUR/USD traded with a low of 1.2664 and a high of 1.2951 before closing the day at 1.2745 in the New York session. Looking ahead, November Sentix are expected at -34 vs. -28 previously.

Japanese Yen (JPY)

The Japanese Yen (JPY) initially very strong going into the Asian open but was unable to hold these gains as the Nikkei turned around and risk sentiment improved. The Crosses recovered sharply with the EUR/JPY and AUD/JPY all staging decent rallies. Initial strength on poor US jobs numbers was reversed as equities rallied in the US. Overall the USDJPY traded with a low of 96.77 and a high of 98.68 before closing the day around 98.12 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) volatility continued with initial weakness in the pound on the back of Thursday’s 1.5% rate cut. As equities reverse though the pound found some buyers and the GBP/JPY lead the recovery. Aggressively lower interest rates are bringing hope that the UK recession may not be as bad as markets are predicting. Overall the GDP/USD traded with a low of 1.5537 and a high of 1.5880 before closing the day at 1.5650 in the New York session. Looking ahead, October PPI is expected at -0.4%.

Australian Dollar (AUD)

The Australian Dollar (AUD) came under severe pressure early in Asia when Oil dropped below $60 a barrel. Joined the majors in recovering well but was extremely volatile during the US session as poor data was absorbed by the market. The Aussie continues to express market sentiment and follows stocks movement very closely. Overall the AUD/USD traded with a low of 0.6545 and a high of 0.6789 before closing the US session at 0.6740.

Gold

Gold (XAU) moved lower with Oil initially before finding some buyers and tracking USD weakness higher. The range was relatively low when compared to other days. Overall trading with a low of USD$727 and high of USD$743 before ending the New York session at USD$737 an ounce.

Technical Analysis: US Jobs Fall

Euro (EUR)

Euro – 1.2818 : Initial support at 1.2526 (Nov 4 low) followed by 1.2329 (Oct 28 low). Initial resistance is now located at 1.2956 (Nov 6 High) at followed by 1.3116 (76.4% retrace 1.3298 to 1.2526)

Yen (JPY)

Yen – 98.94 : Initial support is located at 96.36 (Oct 31 low) followed by 96.08 (Oct 29 low). Initial resistance is now at 99.92 (Nov 5 high) followed by 100.57 (Oct 22 high).

Pound Sterling (GBP)

Pound – 1.5795 : Initial support at 1.5402 (Oct 28 low) followed by 1.5269 (Oct 24 low). Initial resistance is now at 1.6167 (Nov 5) followed by 1.6264 (61.8% retrace 1.6672 to 1.5604).

Australian Dollar (AUD)

Australian Dollar – 0.6870 : Initial support at 0.6546 (Nov 7 low) followed by the 0.6339 (Oct 29 low). Initial resistance is now at 0.7065 (Oct 20 high) followed by 0.7239 (Oct 14 high).

Gold (XAU)

Gold – 748 : Initial support at 718 (61.8% retrace 777.90-682.41) followed by 707 (Oct 27 low). Initial resistance is now at 777.5 (Oct 30 high) followed by 803.65 (Oct 21 Level).