Daily Outlook – Dollar Strong, Euro Hurt on Spanish Concern

U.S. Dollar Trading (USD) stocks fell slightly on Eurozone concerns with Spain warned by Moody’s it may lower the countries rating. November CPI was slightly less than expected at 0.1% vs. 0.2% forecast. November Industrial Output at 0.4% vs. 0.3% forecast. In US stocks, DJIA -19 points closing at 11457, S&P -6 points closing at 1235 and NASDAQ -10 points closing at 2617. Looking ahead, Weekly Jobless Claims are forecast at 420k. vs. 421k previously.

The Euro (EUR) the market was spooked by the ongoing European debt crisis as Moody’s warning came ahead of today EU leaders meeting. EUR/JPY held up better than most crosses on a resurgent USD/JPY. EUR/USD traded with a low of 1.3207 and a high of 1.3379 before closing at 1.3220. Looking ahead, December PMI Services is forecast at 55.4 vs. 55.4 previously.

The Japanese Yen (JPY) broke above Y84 and surged to month highs at Y84.50 on increasing US yields and noticeable change in medium term outlook from many analysts. The multi year down trend found support near all time lows at Y80 and is beginning to creep higher. Overall the USDJPY traded with a low of 83.63 and a high of 84.53 before closing the day around 84.20 in the New York session.

The Sterling (GBP) was under heavy selling pressure after weak jobs numbers with the unemployment rate jumping to 7.9% vs. 7.7%. Cable slid to the 1.55 handle with very limited bounce. Overall the GBP/USD traded with a low of 1.5529 and a high of 1.5772 before closing the day at 1.5560 in the New York session. Looking ahead, November Retail Sales are forecast at 0.4% vs. 0.5% previously.

The Australian Dollar (AUD) was sold steadily throughout the day with both USD strength and increasing risk aversion due to the precarious European Situation. AUD/NZD pushed above 1.3300 and is providing some support. Overall the AUD/USD traded with a low of 0.9839 and a high of 0.9975 before closing the US session at 0.9870.

Oil & Gold (XAU) submitted to Dollar strength but did not move sharply lower as sovereign debt concerns offered support to the alternate currency. Overall trading with a low of USD$1378 and high of USD $1397 before ending the New York session at USD$1395 an ounce. Oil bucked the trend of most commodities with a major drop in US Oil inventories inspiring a sharp pop above $89. WTI Oil Closed $0.50 at $88.75 a barrel.

TECHNICAL COMMENTARY

Euro – 1.3215

Initial support at 1.3183 (Dec 13 low) followed by 1.3165 (Dec 9 low). Initial resistance is now located at 1.3499 (Dec 14 high) followed by 1.3634 (Nov 23 high)

Yen – 84.20

Initial support is located at 83.60 (Dec 15 high) followed by 82.84 (Dec 14 low). Initial resistance is now at 84.35 (Dec 15 high) followed by 85.40 (Sept 24 high).

Pound – 1.5540

Initial support at 1.5512 (Dec 2 Low) followed by 1.5500 (Big Figure). Initial resistance is now at 1.5775 (Dec 15 high) followed by 1.5911 (Dec 14 high).

Australian Dollar – 0.9865

Initial support at 0.9833 (Dec 13 low) followed by the 0.9776 (Dec 9 low). Initial resistance is now at 1.0031 (76.4% retrace of 1.0183-0.9537) followed by 1.0091 (Nov 11 high).

Gold – 1381

Initial support at 1371 (Dec 8 low) followed by 1351 (Nov 26 low). Initial resistance is now at 1408 (Dec 7 high) followed by 1438 (1329.70 plus 1315.45-1424.60).

Oil – 88.75

Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 89.50 (Intraday Resistance) followed by 90.00 (Intraday Resistance).

Written by Anthony Darvall

Written by Easy-Forex

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• Daily Outlook – Oil under pressure, Euro at 1.3000, US NonFarm Payrolls Ahead
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• Daily Outlook – USD Strengthens as Eurozone Concerns Remain