Stocks Rally into the New Year

  • U.S. Dollar Trading (USD) stock markets rallied but economic data kept the USD weak. Stocks reacted positively to news that GM would receive $6bn for its car financing arm from the TARP.  December Consumer Confidence fell to 38 vs. 45 expected a new all time low. Case Shiller fell -2.2% in October vs. a milder -1.8% forecast. In U.S. share markets, the NASDAQ was up 40 points (2.67%) and the Dow Jones was up 184 points (2.17%). Crude Oil closed down -$0.99 ending the New York session at $39.03 per barrel. Looking ahead, October Case Shiller House Price index is expected to fall -1.8%. Also released, Weekly Jobless claims are seen at 565K vs. 586K previously. 

  • The Euro (EUR) found support in Asia and early Europe before again reversing direction in the US session as Oil eased and traders took profits. EUR/GBP again had a run up to the 98 level before also receding back from the lofty levels. Eurozone Private loans were at 7.1% vs. 7.8 previously. Overall the EUR/USD traded with a low of 1.3989 and a high of 1.4220 before closing the day at 1.4075.

  • The Japanese Yen (JPY) kept to a tight range against the USD but found direction with GBP weakness and EUR strength. Overall the USDJPY traded with a low of 90.03 and a high of 90.97 before closing the day around 90.30 in the New York session. Japan Markets closed today.

  • The Sterling (GBP) bounced off year lows as the EUR found strength but was under pressure and couldn’t hold above 1.45. EUR/GBP traded above 0.9800 catching the markets attention. Overall the GDP/USD traded with a low of 1.4395 and a high of 1.4548 before closing the day at 1.4450 in the New York session.

  • The Australian Dollar (AUD) had a very quiet trading day after regaining the 0.6900 level on USD weakness and buoyant stocks. Commodities were mixed with Oil down but metals up. Overall the AUD/USD traded with a low of 0.6876 and a high of 0.6940 before closing the US session at 0.6915.

  • Gold (XAU) traded in a range as USD weakness was offset by heavy Oil. Overall trading with a low of USD$864 and high of USD$881 before ending the New York session at USD$864 an ounce.

TECHNICAL COMMENTARY

Chart

  • Euro – 1.4110
    Initial support at 1.3916 (Dec 30 low) followed by 1.3824 (Dec 19 low). Initial resistance is now located at 1.4258 (76.4% retrace 1.4363 to 1.3917) at followed by 1.4166 (38.2% retrace 1.4719 to 1.3824)

  • Yen – 90.25
    Initial support is located at 89.76 (Dec 23 low) followed by 89.11 (Dec 22 low). Initial resistance is now at 90.98 (Dec 29 high) followed by 91.30 (Dec 25 high).

  • Pound – 1.4430
    Initial support at 1.4389 (Dec 30 low) followed by 1.4044 (Jan 2002). Initial resistance is now at 1.4552 (Dec 30 high) followed by 1.4771 (Dec 29 low).

  • Australian Dollar – 0.6910
    Initial support at 0.6798 (Dec 26 low) followed by the 0.6759 (Dec 24 low). Initial resistance is now at 0.6969 (Dec 29 high) followed by 0.7139 (Dec 18 high).

  • Gold – 874
    Initial support at 864 (Dec 29 low) followed by 843 (Dec 26 low). Initial resistance is now at 890 (Dec 29 high) followed by 930 (Oct 10 high).