Weekly Outlook -- North Korea Flare Up, Risk Off |
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| Written by Tony Darvall | |||||||||||||||||||||||||||||||||||||||||||||
| Monday, 29 November 2010 02:53 GMT | |||||||||||||||||||||||||||||||||||||||||||||
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Last week's currency trading review The Dollar gained on heavy safe haven flows given a military confrontation in Korea, China Monetary Tightening and Irish Bailout issues. Stocks where under heavy pressure but managed a rally on Wednesday ahead of a Holiday shortened week in the US. Weekly Jobless Claim fell to two year lows at 407k vs. 439k previously. The Euro concerns that the Irish Bailout could be stalled by political tensions and debt contagion could spread to Portugal sent the Euro on a spiral lower. November German IFO economic sentiment was a bright spot however with a solid 109 reading from 107 previously. The EUR/USD fell -3.07% closing Asia at 1.3264, after opening the week at 1.3671. The Japanese Yen lost strength against the USD as the Korean crisis spurred investors to shun the usual safe haven. USD/JPY is threatening to break above Y84 as the downtrend over recent moves is unwound and traders look to the topside. October CPI remained at -0.6% y/y. The USD/JPY gained +0.46% closing Asia at 83.96, after opening at 83.54. The GBP with large UK banking exposure to its northern neighbor in Ireland the Pound was under heavy pressure as well this week. Q3 GDP was confirmed at 0.8% and CBI Sales Survey improved to 43 vs. 34 previously. The GBP/USD fell -1.71% closing Asia at 1.5708 after opening at 1.5977. The AUD was under pressure with 'risk off' trading hurting the high yielding Aussie more than most. EUR/AUD was able to trade at all time lows under 1.3600 as the single currency slides on government debt issues. The AUD/USD fell -1.87% closing at 0.9683 after opening at 0.9864. The Forex Trading Week Preview In the States; On Monday, US Treasury Currency Report released. On Tuesday, Chicago PMI released previously at 60. Also released, CB Consumer Confidence previously at 50.2. on Wednesday, ADP Employment Change previously at 43k. Also released, ISM Manufacturing previously at 60. On Thursday, Weekly Jobless Claims previously at 407k. On Friday, Non Farm Unemployment previously at 151k and Unemployment rate at 9.6%. We will provide our previews and reviews of these data releases in the daily summary. In the Eurozone; On Tuesday, German Unemployment previously at -3k. Also released CPI previously at 1.9% y/y. Also released, The European Unemployment Rate previously was 10.1%. On Thursday, ECB Rate announcement forecast to hold at 1.0% with focus on Trichet Press Conference. In the UK, On Nationwide HPI previously at -0.7%. Also Released, Manufacturing PMI previously at 54.9. ON Friday, Services PMI previously 53.2. We will provide our previews and reviews of these data releases in the daily summary. In Japan; On Monday, Retail Sales previously at 1.4%y/y. Also BOJ Gov Shirakawa Speaks. In Australia; On Tuesday, Building Approvals previously at -6.6% m/m. On Wednesday, GDP previously at 1.2% Q/Q. On Thursday, October Retail Sales previously at 0.3% m/m. We will provide our previews and reviews of these data releases in the daily summary. TECHNICAL COMMENTARY
Euro - 1.3220 Initial support at 1.3199 (Nov 26 low) followed by 1.2988 (76.4% retracement of 1.2588-1.4282). Initial resistance is now located at 1.3300 (Big Figure Resistance) followed by 1.3634 (Nov 23 high) Yen - 84.10 Initial support is located at 82.79 (Nov 23 low) followed by 81.66 (Nov 12 low). Initial resistance is now at 83.99 (Oct 5 high) followed by 85.40 (Sept 24 high). Pound - 1.5585 Initial support at 1.5503 (Sep 21 Low) followed by 1.5297 (Sep 7 low). Initial resistance is now at 1.5838 (Nov 24 high) followed by 1.6094 (Nov 19 high). Australian Dollar - 0.9640 Initial support at 0.9542 (Oct 5 low) followed by the 0.9477 (50% retrace of 0.8771-1.0183). Initial resistance is now at 0.9818 (Nov 26 high) followed by 0.9954 (Nov 22 high). Gold - 1354 Initial support at 1329 (Nov 16 low) followed by 1315 (Oct 22 low). Initial resistance is now at 1382 (Nov 23 high) followed by 1424 (Nov 9 high). Oil - 83.70 Initial support at 82.50 (Intraday Support) followed by 81.00 (Intraday Support). Initial resistance is now at 84.50 (Intraday Resistance) followed by 85.00 (Intraday Resistance). Written by Anthony Darvall
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