Daily Outlook – Stocks Rebound, Dollar Remains Strong

U.S. Dollar Trading (USD) stocks around the world rebounded from heavy selling with some good economic data trumping the negative Irish/Korean news. Weekly Jobless Claims dropped to two year lows at 407k and UoM consumer sentiment jumped to 71.6 vs. 69.3 previously. In US stocks, DJIA +150 points closing at 11187, S&P +17 points closing at 1198 and NASDAQ +48 points closing at 2543. Looking ahead, Bank Holiday for Thanks Giving.

The Euro (EUR) struggled even as stocks rallied with investors preferring other currencies while the debt situation lingers. German IFO did provide some good news up to 109.3 vs. 107.6 forecast. In other news a widely expected downgrade of Ireland of two notches had little effect. EUR/USD traded with a low of 1.3283 and a high of 1.3423 before closing at 1.3330.

The Japanese Yen (JPY) was well supported on USD strength and good US jobs data to end near the top of its recent range. Crosses were strong with AUD/JPY leading the pack higher. Overall the USDJPY traded with a low of 82.93 and a high of 83.69 before closing the day around 83.55 in the New York session. Looking ahead, October Trade balance is forecast at 0.63T vs. 0.59T previously.

The Sterling (GBP) Q3 GDP was confirmed at 0.8% Q/Q but the GDP was linked with the Euro in underperforming risk assets. The market was stable though and new lows were limited by the US stock market rally. Overall the GBP/USD traded with a low of 1.5757 and a high of 1.5957 before closing the day at 1.5780 in the New York session. Looking ahead, UK Inflation Hearing and BoE Governor King Speaks.

The Australian Dollar (AUD) was very well supported off lows in Asia and shrugged off another attempt lower in European session before staging a rally in the US session. The market is caught between ongoing China tightening/European Concerns and general investor optimism creating demand for the high yielding Australian Dollar. Overall the AUD/USD traded with a low of 0.9737 and a high of 0.9855 before closing the US session at 0.9820. Looking ahead, Q3 Capex forecast at 3% vs. -4% Q/Q.

Oil & Gold (XAU) consolidated Tuesday’s move higher finding support on a dip below $1370. Overall trading with a low of USD$1368 and high of USD $1382 before ending the New York session at USD$1373 an ounce. Oil Surged overnight in a major move higher. WTI Oil Closed +$2.78 at $84.03 a barrel.

TECHNICAL COMMENTARY

Euro – 1.3350

Initial support at 1.3271 (1.3786 minus 0.618 of 1.4282-1.3448) followed by 1.3235 (61.8% retrace of 1.2588-1.4282). Initial resistance is now located at 1.3634 (Nov 23 High) followed by 1.3825 (Nov 10 high)

Yen – 83.50

Initial support is located at 82.40 (Nov 15 low) followed by 81.66 (Nov 12 low). Initial resistance is now at 83.99 (Oct 5 high) followed by 85.40 (Sept 24 high).

Pound – 1.5785

Initial support at 1.5759 (Nov 23 Low) followed by 1.5651 (Oct 20 low). Initial resistance is now at 1.6299 (Nov 4 high) followed by 1.6458 (Jan 19 high).

Australian Dollar – 0.9835

Initial support at 0.9652 (Oct 27 low) followed by the 0.9542 (Oct 5 low). Initial resistance is now at 0.9954 (Nov 22 high) followed by 1.0183 (Nov 5 high).

Gold – 1373

Initial support at 1329 (Nov 16 low) followed by 1315 (Oct 22 low). Initial resistance is now at 1382 (Nov 23 high) followed by 1424 (Nov 9 high).

Oil – 84.20

Initial support at 82.50 (Intraday Support) followed by 81.00 (Intraday Support). Initial resistance is now at 84.50 (Intraday Resistance) followed by 85.00 (Intraday Resistance).

Written by Anthony Darvall

Written by Easy-Forex

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• Daily Outlook – Strong US Jobs Data Give Dollar Support
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• Weekly Outlook – US Jobs Data to test USD strength into the New Year
• The Japanese Yen and the resumption of the carry trade