Daily Outlook – US GDP to Give Clues on Recovery
Saturday, October 30th, 2010U.S. Dollar Trading (USD) remained under pressure as news emerged that the FED was talking to Bond traders to work out how much the US central bank would have to purchase to move the Treasury market. Stock markets remained volatile even as Weekly Jobless Claims improved to 434k vs. 452k previously. In US stocks, DJIA -12 points closing at 11114, S&P +1 points closing at 1183 and NASDAQ +4 points closing at 2507. Looking ahead, Q3 GDP is forecast at 2% vs. 1.7% previously Q/Q annualized.
The Euro (EUR) gained heavily on USD weakness with the market moving back to the middle of its recent range. The market responded positively to comments from ECB member Weber that the German Budget would be below 3%. EUR/USD traded with a low of 1.3777 and a high of 1.3953 before closing at 1.3925. Looking ahead, October Inflation is forecast at 1.8% y/y.
The Japanese Yen (JPY) gained against the Dollar as the relief rally ran out of steam and the major slipped back to Y81. September Retail Sales gained 1.2% y/y vs. 3.2% forecast and 4.3% previously. Overall the USDJPY traded with a low of 80.85 and a high of 81.73 before closing the day around 81.00 in the New York session. Update September Japanese Core CPI at -0.5% vs. -1.0% previously y/y.
The Sterling (GBP) tracked the Euro higher surging back towards the key 1.6000 level closing above 1.5900. October CBI Realized Sales dropped to 36 vs. 40 but were overlooked. EUR/GBP hit week lows at 0.8700. Overall the GBP/USD traded with a low of 1.5760 and a high of 1.5981 before closing the day at 1.5930 in the New York session. Looking ahead, September Mortgage Approvals are forecast at 46k vs. 47k previously.
The Australian Dollar (AUD) did well with the early rally in US stocks and weakness in the USD. Gains were pared back however as US stocks reversed direction into the close. The Reserve Bank of New Zealand held at 3% as expected but stated that rates will have to rise at some point. Overall the AUD/USD traded with a low of 0.9729 and a high of 0.9822 before closing the US session at 0.9780.
Oil & Gold (XAU) is very sensitive to US QE2 news and thus responded sharply to the topside on fresh FED chatter. Overall trading with a low of USD$1322 and high of USD $1346 before ending the New York session at USD$1341 an ounce. Oil remained unusually calm in a tight range. WTI Oil Closed -$0.10 at $81.90 a barrel.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3560 | 1.3637 | 1.3910 | 1.4159 | 1.4373 |
| USD/JPY | 79.75 | 80.41 | 80.70 | 82.01 | 83.03 |
| GBP/USD | 1.5503 | 1.5762 | 1.5940 | 1.5899 | 1.6107 |
| AUD/USD | 0.9542 | 0.9652 | 0.9780 | 1.0004 | 1.0166 |
| XAU/USD | 1283.00 | 1312 | 1340 | 1349 | 1387 |
| OIL/USD | 80.00 | 81.00 | 81.90 | 82.50 | 84.00 |
Euro – 1.3910
Initial support at 1.3637 (Oct 5 low) followed by 1.3560 (Sept 30 low). Initial resistance is now located at 1.4159 (Oct 15 High) followed by 1.4373 (76.4% retrace of 1.5144-1.1877)
Yen – 80.70
Initial support is located at 80.41 (Oct 25 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 – 1.5940
Initial support at 1.5762 (Oct 28 Low) followed by 1.5503 (Sept 21 low). Initial resistance is now at 1.5899 (Oct 20 high) followed by 1.6107 (Oct 15 high).
Australian Dollar – 0.9780
Initial support at 0.9652 (Oct 27 low) followed by the 0.9542 (Oct 5 low). Initial resistance is now at 1.0004 (Oct 15 high) followed by 1.0166 (0.8067 plus 0.618 of 0.6009-0.9406).
Gold – 1340
Initial support at 1312 (Oct 5 low) followed by 1283 (Sept 28 low). Initial resistance is now at 1349 (Oct 21 High) followed by 1387 (Oct 14 high).
Oil – 81.90
Initial support at 81.00 (Intraday Support) followed by 80.00 (Intraday Support). Initial resistance is now at 82.50 (Intraday Resistance) followed by 84.00 (Intraday Resistance).
Written by Anthony Darvall
Written by Easy-Forex
