Daily Outlook – Euro back below 1.4000 on Irish Concerns
Monday, November 8th, 2010U.S. Dollar Trading (USD) managed small gains in most currencies on the back of profit taking in stock markets around the globe. Larger gains were seen against the Euro on negative news regarding the weakness of Irish Banks. In US stocks, DJIA -37 points closing at 11406, S&P -2 points closing at 1223 and NASDAQ +1 points closing at 2580. Looking ahead, November IBD Economic Optimism previously at 46.4.
The Euro (EUR) fell through 1.4000 in Asia and hit stops falling quickly to the lower 1.3900 region by the middle of the day. Attention was on Irish banking concerns and weak September German Industrial output down -0.8% m/m. EUR/USD traded with a low of 1.3886 and a high of 1.4087 before closing at 1.3920. Looking ahead, October German CPI is forecast at 1.3% y/y.
The Japanese Yen (JPY) kept inside a 50 point range with USD strength helping to negate EUR/JPY weakness. The market is holding for fresh direction and news, with the G20 looming the risks for intervention are low but major USD weakness is also seen limited. Overall the USDJPY traded with a low of 80.99 and a high of 81.46 before closing the day around 81.15 in the New York session.
The Sterling (GBP) fell in sympathy with the Euro but losses where limited and EUR/GBP made further lows towards the 0.8600 level. Cable stayed in a 40 pip range in Europe and US sessions. Overall the GBP/USD traded with a low of 1.6102 and a high of 1.6217 before closing the day at 1.6140 in the New York session. Looking ahead, September Trade Balance forecast at -8bn vs. -8.23bn previously.
The Australian Dollar (AUD) dipped back to 1.01 supports before rallying into the US close as selling subsided and fresh buying resumed. The uptrend is firmly in place and the market is eyeing fresh all time highs on the next bout of USD weakness. Overall the AUD/USD traded with a low of 1.0077 and a high of 1.0168 before closing the US session at 1.0130.
Oil & Gold (XAU) broke cleanly above the $1400 closing the day at all time highs $1410. Overall trading with a low of USD$1386 and high of USD $1411 before ending the New York session at USD$1394 an ounce. Rebounded from early selling back to the opening levels. WTI Oil Closed -$0.05 at $86.80 a barrel.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3560 | 1.3698 | 1.3895 | 1.4086 | 1.4282 |
| USD/JPY | 79.75 | 80.23 | 81.15 | 81.80 | 82.01 |
| GBP/USD | 1.5878 | 1.6080 | 1.6125 | 1.6379 | 1.6458 |
| AUD/USD | 0.9652 | 0.9866 | 1.0125 | 1.0183 | 1.0212 |
| XAU/USD | 1315.00 | 1346 | 1406 | 1410 | 1429 |
| OIL/USD | 84.50 | 85.00 | 86.80 | 87.50 | 88.00 |
Euro – 1.3895
Initial support at 1.3698 (Oct 20 low) followed by 1.3560 (Sept 30 low). Initial resistance is now located at 1.4086 (Nov 8 High) followed by 1.4282 (Nov 4 high)
Yen – 81.15
Initial support is located at 80.23 (Nov 1 low) followed by 79.75 (Apr 1995 low). Initial resistance is now at 81.80 (Nov 3 high) followed by 82.01 (Oct 13 high).
Pound – 1.6125
Initial support at 1.6080 (Nov 4 Low) followed by 1.5878 (Oct 29 low). Initial resistance is now at 1.6379 (76.4% retrace of 1.7047-1.4231) followed by 1.6458 (Jan 19 high).
Australian Dollar – 1.0125
Initial support at 0.9866 (Nov 2 low) followed by the 0.9653 (Oct 27 low). Initial resistance is now at 1.0183 (Nov 5 high) followed by 1.0212 (0.9652 plus 0.618 of 0.8316-0.9222).
Gold – 1406
Initial support at 1346 (Nov 4 low) followed by 1315 (Oct 22 low). Initial resistance is now at 1410 (Nov 8 High) followed by 1429 (1157.03 plus 1.236 of 1044.85-1265.30).
Oil – 86.80
Initial support at 85.00 (Intraday Support) followed by 84.50 (Intraday Support). Initial resistance is now at 87.500 (Intraday Resistance) followed by 88.00 (Intraday Resistance).
Written by Anthony Darvall
Written by Easy-Forex
