Majors slide against USD with no data released in the market. Market awaits central bank announcements tomorrow. Aussie trade balance due out today. CURRENCY TRADING SUMMARY – 10 JANUARY 07 (23:30GMT)
- U.S. Dollar Trading (USD) was generally stronger against the majors in the overnight forex session as the market scales back expectations of a rate cut from the Federal Reserve after the recent run of strong data. A fall in crude oil also assisted the greenback as it was viewed that falling crude prices will help lower the US trade deficit and boost spending. In other markets, the Dow Jones lost 6pts and the NASDAQ gained 5pts as the earnings outlook for blue chip stocks coupled with the drop in energy prices, kept a lid on any rise in the Dow. Crude oil dipped US28c to US$55.81 a barrel as a warm winter in the US and ample supplies have spurred long liquidations. Looking ahead, the US trade balance is due out tonight.
- The Euro (EUR) traded within a low of 1.2986 and a high of 1.3054, before closing at 1.3000 in the New York session.
- The Japanese Yen (JPY) traded within a low of 118.69 and a high of 119.55 versus the dollar, before closing at 119.36 in the New York session.
- The Sterling (GBP) traded within a low of 1.9378 and a high of 1.9457, before closing at 1.9398 in the New York session. On the data front, BRC retail sales grew by 2.5% compared to 0.5% previously.
- The Australian Dollar (AUD) traded within a low of 0.7791 and a high of 0.7836, before closing at 0.7815 in the New York session. Looking ahead, trade balance is due out today. UPDATE: Aussie trade balance came in at -843mln compared to a -750mln forecast.
- Gold (XAU) gained US$5.50 to US$614.90 an ounce with bargain hunters continuing to buy the precious metal despite a stronger USD.
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.2926 | 1.2972 | 1.3000 | 1.3107 | 1.3181 | | USD/JPY | 117.69 | 117.98 | 119.30 | 119.55 | 119.70 | | GBP/USD | 1.9222 | 1.9261 | 1.9395 | 1.9457 | 1.9532 | | AUD/USD | 0.7769 | 0.7779 | 0.7810 | 0.7855 | 0.7922 | | XAU/USD | 600.00 | 602.20 | 614.00 | 626.30 | 630.75 |
Initial support at 1.2972 (Jan 8 low) followed by 1.2926 (50 % retracement of the 1.2483 to 1.3368 advance). Initial resistance is now located at 1.3107 (Jan 5 high) followed by 1.3181 (Jan 4 high). Initial support is located at 117.98 (Jan 5 corrective low) followed by 117.69 (38.2% retracement of the 114.43 to 119.70 advance). Initial resistance is now at 119.55 (Jan 8 high) followed by 119.7 (Jan 3 high). Initial support at 1.9261 (Jan 8 low) followed by 1.9222 (61.8% retracement of the 1.8835 to 1.9849 advance). Initial resistance is now at 1.9457 (Jan 9 high) followed by 1.9532 (Jan 4 high). - Australian Dollar – 0.7810
Initial support at 0.7779 (Dec 15, 2006 reaction low) followed by 0.7769 (Former resistance from Nov 1, 2006). Initial resistance is now at 0.7855 (Jan 5 high) followed by 0.7922 (Jan 4 high). Initial support at 602.2 (Jan 5 low) followed by 600.0 (Psychological round number). Initial resistance is now at 626.3 (Jan 5 high) followed by 630.75 (Jan 4 high). 
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