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Daily Forex Outlook

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Thin Trading over Christmas, Commodities Rally

Mon, Dec 29 2008, 00:58 GMT
by Easy Forex Team

Easy Forex

Thin Trading over Christmas, Commodities Rally

• U.S. Dollar Trading (USD) very quiet trading with Europe away and thin equity markets in Japan and US. Most of the action was reserved for the commodity front with Oil and Gold rising on fresh geopolitical concerns out of the Middle East and India/Pakistan.  In U.S. share markets, the NASDAQ was up 5 points (0.35%) and the Dow Jones was up 47 points (0.56%). Crude Oil closed up $2.36 ending the New York session at $37.71 per barrel.

• The Euro (EUR) was supported all day above the 1.4000 level as the USD came under pressure with the commodity rally.  New highs were seen in the EUR/GBP scaling above the 0.9600 with some analyst calling for Parity in the coming months. Overall the EUR/USD traded with a low of 1.3990 and a high of 1.4120 before closing the day at 1.4058.

• The Japanese Yen (JPY) was sold across the board in thin market and stable markets. Japanese data was mixed with Household spending for Nov falling only -0.5% vs. -3.7% forecast but Industrial Production set for a -8.1% m/m fall in November. Overall the USDJPY traded with a low of 90.35 and a high of 90.84 before closing the day around 90.66 in the New York session.

• The Sterling (GBP) continued to be weighed down by heavy EUR/GBP buying and there was no one putting up there hand to back the pound going forward. Cable was sold all day testing support at 1.4650 in the US close. Overall the GDP/USD traded with a low of 1.4647 and a high of 1.4803 before closing the day at 1.4652 in the New York session.

• The Australian Dollar (AUD) was very quiet keeping to a tight range with Australia away on Boxing Day. Gains in the US session on the back of surging gold and Oil helped to keep the pair buoyant into the weekend.  Overall the AUD/USD traded with a low of 0.6799 and a high of 0.6877 before closing the US session at 0.6859.

• Gold (XAU) gold was the one of the biggest gainers on Friday breaking higher as Oil surged and concerns over India/Pakistan kept the pair supported. Overall trading with a low of USD$842 and high of USD$873 before ending the New York session at USD$872 an ounce.
  

TECHNICAL COMMENTARY

• Euro – 1.4080
  Initial support at 1.3903 (Dec 22 low) followed by 1.3824 (Dec 19 low). Initial resistance is now located at 1.4132 (Dec 25 High) at followed by 1.4166 (38.2% retrace 1.4719 to 1.3824)

• Yen – 90.70
  Initial support is located at 89.08 (Dec 22 low) followed by 88.43 (Dec 19 low). Initial resistance is now at 90.99 (Dec 24 high) followed by 91.57 (Dec 12 high).

• Pound – 1.4670
  Initial support at 1.4659 (Dec 24 low) followed by 1.4500 (Key Level). Initial resistance is now at 1.4897 (Dec 23 high) followed by 1.4993 (Dec 22 high).

• Australian Dollar – 0.6845
  Initial support at 0.6663 (Dec 16 low) followed by the 0.6490 (Dec 12 low). Initial resistance is now at 0.6927 (Dec 19 high) followed by 0.7139 (Dec 18 high).

• Gold – 870
  Initial support at 830 (Dec 23 low) followed by 802 (Dec 11 low). Initial resistance is now at 882 (Dec 17 high) followed by 900 (Key level).

Published on  Mon, Dec 29 2008, 01:03 GMT