Daily Outlook – Dollar Sold into the New Year
Sunday, January 2nd, 2011U.S. Dollar Trading (USD) a strong day in commodities sent the USD lower across the board. End of year position adjustments in a thin market meant moves were sharp and whippy with most traders returning in January. In US stocks, DJIA +7 points closing at 11577, S&P -1 points closing at 1256 and NASDAQ -10 points closing at 2652. Looking Ahead, December ISM Manufacturing at 56.9 vs. 56.6.
The Euro (EUR) rallied above 1.3400 as the Dollar came under pressure and fears subsided temporarily about the future of EU debt. With most stock markets closed there was little catalyst or reason for the moves. EUR/USD traded with a low of 1.3280 and a high of 1.3425 before closing at 1.3390. Looking ahead, December PMI forecast at 56.8.
The Japanese Yen (JPY) tested Y81 after being under pressure all day due to Dollar weakness. Most crosses held their ground or even rallied however as risk appetite remains quite strong. Overall the USDJPY traded with a low of 80.92 and a high of 81.60 before closing the day around 81.10 in the New York session. Looking ahead, Bank Holiday.
The Sterling (GBP) was extremely strong going into the US open up over 200 pips on the day with EUR/GBP and GBP/JPY crosses supporting the major. Overall the GBP/USD traded with a low of 1.5435 and a high of 1.5665 before closing the day at 1.5595 in the New York session. Looking ahead, Bank Holiday.
The Australian Dollar (AUD) traded at new record highs above 1.0250 as the market continues to buy dips on the commodity currency. AUD/NZD is a notable exception as the pair eases from year highs in recent sessions. Overall the AUD/USD traded with a low of 1.0150 and a high of 1.0255 before closing the US session at 1.0180.
Oil & Gold (XAU) was strong the whole day up $15 an ounce. Overall trading with a low of USD$1405 and high of USD $1420 before ending the New York session at USD$1418 an ounce. Oil led the market higher up nearly $2 a barrel. WTI Oil Closed +$1.90 at $91.40 a barrel.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3085 | 1.3216 | 1.3290 | 1.3499 | 1.3634 |
| USD/JPY | 80.54 | 81.23 | 81.30 | 82.47 | 83.17 |
| GBP/USD | 1.5297 | 1.5345 | 1.5540 | 1.5577 | 1.5647 |
| AUD/USD | 0.9863 | 1.0040 | 1.0190 | 1.0200 | 1.0300 |
| XAU/USD | 1372.00 | 1401 | 1416 | 1420 | 1431 |
| OIL/USD | 89.00 | 90.00 | 91.50 | 92.50 | 94.00 |
Euro – 1.3290
Initial support at 1.3216 (Dec 30 low) followed by 1.3085 (Dec 29 low). Initial resistance is now located at 1.3499 (Dec 14 high) followed by 1.3634 (Nov 23 high)
Yen – 81.30
Initial support is located at 81.23 (76.4% retrace of 80.22-84.51) followed by 80.54 (Nov 9 low). Initial resistance is now at 82.47 (Dec 29 high) followed by 83.17 (Dec 24 high).
Pound – 1.5540
Initial support at 1.5345 (Sep 8 Low) followed by 1.5297 (Sep 7 low). Initial resistance is now at 1.5577 (Dec 20 high) followed by 1.5647 (Dec 17 high).
Australian Dollar – 1.0190
Initial support at 1.0040 (Dec 28 low) followed by the 0.9863 (Dec 20 low). Initial resistance is now at 1.0200 (Round Number) followed by 1.0300 (Round Number Support).
Gold – 1416
Initial support at 1401 (Dec 29 low) followed by 1372 (Dec 23 low). Initial resistance is now at 1420 (Dec 31 high) followed by 1431 (Dec 7 High).
Oil – 91.50
Initial support at 90.00 (Intraday Support) followed by 89.00 (Intraday Support). Initial resistance is now at 92.50 (Intraday Resistance) followed by 94.00 (Intraday Resistance).
Written by Anthony Darvall
Written by Easy-Forex
