U.S. Dollar Trading (USD) the FOMC delivered a Christmas present for investors overnight promising to keep US interest rates low until the Unemployment Rate is under 6.5%. Stocks took off and the USD was sold aggressively against risk assets. The rally was short lived however as Fed Chief Bernanke began his press conference and spooked the market after commenting that the FED could not fully offset a fall off the ‘fiscal cliff’. Looking ahead, November Retails Sales forecast at 0.5% vs. -0.3% previously. Also Weekly Jobless Claims forecast at 370k.
The Euro (EUR) the EUR/USD tested 1.3100 post FOMC but we failed to break the psychological level and have spent most of Asian trade just under the figure. The recent EUR/USD uptrend is targeting year highs at 1.3170 with EUR/JPY providing tremendous support. The Sterling (GBP) continued to lag the EUR/USD with EUR/GBP in its own grind higher forcing the GBP/USD to be left behind in the risk on rally. GBP/USD spent most of the day near 1.6150 slowly grinding higher. Looking ahead, SNB Swiss(CHF) Central Bank meeting forecast to hold at 0.25%.
The Japanese Yen (JPY) the Yen has become the main currency in play throughout the markets with USD/JPY breaking key resistance at Y83 yesterday and not letting the FOMC prompt a pull back. The Yen crosses seized the USD victory to further punish the Japanese currency with some pairs moving 200+ pips higher. Australian Dollar (AUD) continued to trend higher hitting 1.0580 before easing on profit taking. EUR/AUD is pressing higher towards 1.2400 with the Euro recovery now in full flight on many crosses. AUD/JPY is providing plenty of support however with the famous carry trade.
Oil & Gold (XAU) Gold is technically weak and was not able to hold onto gains from the post FOMC rally. OIL/USD enjoyed good gains up to $87.50 before easing back to $86.80.
Pairs to watch
EUR/USD to retest 1.3175 2012 highs?
XAU/USD Fundamentals fighting Techs?
TECHNICAL COMMENTARY
Currency
|
Sup 2
|
Sup 1
|
Spot
|
Res 1
|
Res 2
|
EUR/USD
|
1.2930
|
1.3030
|
1.3084
|
1.3098
|
1.3127
|
USD/JPY
|
82.00
|
82.49
|
83.60
|
84.00
|
85.00
|
GBP/USD
|
1.5999
|
1.6074
|
1.6140
|
1.6178
|
1.6200
|
AUD/USD
|
1.0460
|
1.0485
|
1.0555
|
1.0585
|
1.0625
|
XAU/USD
|
1660.00
|
1688
|
1699
|
1704
|
1721
|
OIL/USD
|
83.50
|
85.00
|
86.60
|
87.50
|
88.00
|
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