US improves after better than expected trade balance. Market awaits ECB and BoE interest rate announcements. CURRENCY TRADING SUMMARY – 11 JANUARY 07 (23:30GMT)
- U.S. Dollar Trading (USD) strengthened for the fifth day in six against the majors in the overnight foreign exchange trading session as the trade balance narrowed for the third month in a row. Trade balance came in at -58.23bln compared to a -59.9bln estimate. Looking ahead, the Dow Jones index rose by 25pts and the NASDAQ climbed 15pts as consumer and transport stocks benefited from the drop in crude oil. Crude oil dropped US$1.91 to US$53.73 a barrel as the continuing mild weather in the US weighs on the oil price, and the dispute between Belarus and Russia was settled.
- The Euro (EUR) traded within a low of 1.2931 and a high of 1.3005, before closing at 1.2936 in the New York session. Looking ahead, Eurozone and German GDP as well as the ECB interest rate announcement are due out today.
- The Japanese Yen (JPY) traded within a low of 119.13 and a high of 119.78 versus the dollar, before closing at 119.62 in the New York session.
- The Sterling (GBP) traded within a low of 1.9320 and a high of 1.9423, before closing at 1.9328 in the New York session. On the data front, UK trade balance came in at -7.19bln compared to a -6.48bln estimate.
- The Australian Dollar (AUD) traded within a low of 0.7761 and a high of 0.7812, before closing at 0.7768 in the New York session. On the data front, Aussie unemployment stayed steady at 4.6%.
- Gold (XAU) fell by US$1.40 to US$613.60 an ounce in response to a stronger greenback and drop in oil.
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.2901 | 1.2926 | 1.2960 | 1.3054 | 1.3107 | | USD/JPY | 117.69 | 117.98 | 119.65 | 119.80 | 119.90 | | GBP/USD | 1.9222 | 1.9261 | 1.9335 | 1.9457 | 1.9532 | | AUD/USD | 0.7732 | 0.7759 | 0.7815 | 0.7839 | 0.7855 | | XAU/USD | 600.00 | 602.20 | 610.00 | 626.30 | 630.75 |
Initial support at 1.2926 (50 % retracement of the 1.2483 to 1.3368 advance) followed by 1.2901 (Former resistance from Nov 10, 2006). Initial resistance is now located at 1.3054 (Jan 9 high and key intraday resistance) followed by 1.3107 (Jan 5 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 119.8 (Jan 10 high) followed by 119.9 (Oct 13, 2006 reaction 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 – 0.7815
Initial support at 0.7759 (Jan 10 low) followed by 0.7732 (Nov 24, 2006 low). Initial resistance is now at 0.7839 (Jan 9 high) followed by 0.7855 (Jan 5 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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