Daily Outlook – Gold Collapses, Dollar Strong
Tuesday, November 9th, 2010U.S. Dollar Trading (USD) strong dollar momentum continued from Monday with stocks and commodities falling sharply towards the end of the day. News that margin requirements would be increased for silver contracts triggered a domino effect throughout the commodities market and currencies. In US stocks, DJIA -60 points closing at 11346, S&P -9 points closing at 1213 and NASDAQ -17 points closing at 2562. Looking ahead, Weekly Jobless Claims are forecast at 450k vs. 456k previously. Weekly Jobless Claims are forecast at -45.5bn vs. 46.35bn.
The Euro (EUR) was under pressure for most of the day with Dollar strength expressed against the alternate major and moves higher in Irish and Portuguese vs. German bond spreads. EUR/USD traded with a low of 1.3747 and a high of 1.3975 before closing at 1.3770. Looking ahead, October German WPI forecast previously at 1%.
The Japanese Yen (JPY) was under pressure during Europe but rallied aggressively on the move higher in US bond yields on fears of QE sparked inflation. Resistance was found at the Y82 level with the downtrend under threat. Overall the USDJPY traded with a low of 80.51 and a high of 81.99 before closing the day around 81.65 in the New York session.
The Sterling (GBP) some weak housing data with RICS house Price -49% and September’s Trade Balance at 8.2bn vs. 8bn forecast. Cable fell through 1.6000 after heavy selling for most of the day with support struggling to be found. Overall the GBP/USD traded with a low of 1.5950 and a high of 1.6187 before closing the day at 1.5980 in the New York session.
The Australian Dollar (AUD) Fell heavily from European highs as Gold plummeted over $40 an ounce form fresh record highs. AUD/USD tested Parity but held while AUD/JPY downside was buffered by the move higher in the USD/JPY. Overall the AUD/USD traded with a low of 0.9997 and a high of 1.0176 before closing the US session at 1.0030. Update November Consumer Sentiment fell -4.7.
Oil & Gold (XAU) was extremely volatile falling sharply from $1420 on news margin requirements for silver would be increased for traders. Overall trading with a low of USD$1382 and high of USD $1424 before ending the New York session at USD$1402 an ounce. Oil slumped along with most commodities. WTI Oil Closed -$1.32 at $85.74 a barrel.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3560 | 1.3698 | 1.3780 | 1.4086 | 1.4282 |
| USD/JPY | 79.75 | 80.23 | 81.65 | 82.01 | 83.03 |
| GBP/USD | 1.5762 | 1.5878 | 1.6020 | 1.6379 | 1.6458 |
| AUD/USD | 0.9652 | 0.9866 | 1.0030 | 1.0183 | 1.0212 |
| XAU/USD | 1346.00 | 1386 | 1402 | 1429 | 1500 |
| OIL/USD | 84.50 | 85.00 | 86.70 | 87.50 | 88.00 |
Euro – 1.3780
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 – 81.65
Initial support is located at 80.23 (Nov 1 low) followed by 79.75 (Apr 1995 low). Initial resistance is now at 82.01 (Oct 13 high) followed by 83.03 (Oct 7 high).
Pound – 1.6020
Initial support at 1.5878 (Oct 29 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 – 1.0020
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 – 1402
Initial support at 1386 (Nov 8 low) followed by 1346 (Nov 8 low). Initial resistance is now at 1429 (1157.03 plus 1.236 of 1044.85-1265.30) followed by 1500 (Round Number).
Oil – 86.70
Initial support at 85.00 (Intraday Support) followed by 84.50 (Intraday Support). Initial resistance is now at 87.50 (Intraday Resistance) followed by 88.00 (Intraday Resistance).
Written by Anthony Darvall
Written by Easy-Forex
