Data filled week from the US ahead. ECB and Fed officials expected to speak.
26/11/07
last week’s currency trading review
The Dollar was volatile throughout the Thanksgiving shortened week as the Euro and Swiss continued making new all-time highs against the Greenback. The focus of the week was squarely placed on the release of the FOMC minutes which the market hoped would give insight into future policy moves by the Federal Reserve. Although the minutes were not as dovish as expected, there was a mention that GDP for 2008 would be expected to slow which hampered USD gains. The G20 meeting in South Africa failed to produce any hard hitting rhetoric against the Greenback’s weakness.
The Euro made new record highs against the US dollar remaining resilient despite some pullbacks by high yielding currencies in light of lingering risk aversion in the markets. The Euro gave up some gains after ECB official Ordonez downplayed the economic growth expectations for 2008.The Euro closed last week at 1.4830 having opened at 1.4668. The Japanese Yen was again influenced by carry trade unwinding causing it to finally break the 110 level convincingly. October trade balance came in slightly less than expected, but market holiday at the end of the week saw violent swings in what was thin trading conditions. The Japanese Yen closed last week at 108.10 having opened at 109.85 earlier in the week. The GBP was choppy at best throughout the week as a light data front meant the BoE minutes from the Nov. 9 meeting took on extra significance. Voting for rates to remain unchanged was at 7-2 (6-3 consensus) however, a noted hawk in the BoE opted for a rate cut, causing a slide in cable. The GBP closed lat week at 2.0585 having opened at 2.0491. The AUD enjoyed another light data week and moved on the back of risk aversion in the markets and performances in other majors. The AUD closed last week at 0.8748 having opened at 0.8849 earlier.
The forex trading week preview
In the States in a heavy week of data for the US, Fed official Plosser’s speech on Tuesday as well as Fisher’s speech on Wednesday will be keenly followed. Also on Wednesday, Durable goods orders and existing home sales will be key. Thursday sees the important GDP Q3 and new home sales reports for possible signs of economic slowdown. Core PCE, Chicago PMI and speeches by Poole and Kroszner are expected on Friday. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone in keeping with official speeches, Trichet, Almunia, and Juncker speak in China today. Tuesday sees the release of the IFO survey with Thursday providing important CPI and GDP data. In the UK official speeches by Blanchflower and Sentence will be delivered on Tuesday with Gov. King and other BoE members testifying to the Treasury Committee on inflation on Thursday. In data specific releases, GDP also on Thursday will be keenly looked at. We will provide our previews and reviews of these data releases in the daily summary.
In Japan official speeches by Fukui and Iwata on Tuesday will be looked at for future BoJ policy decisions. Retail sales on Tuesday is the first key piece of inflation related data. This is followed by industrial production on Wednesday as well as CPI and all-household expenditure on Thursday. We will provide our previews and reviews of these data releases in the daily summary.
In Australia On Thursday CAPEX results will be released followed on Friday by RBA credit for the month of October. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
| Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
| EUR/USD |
1.4636 |
1.4776 |
1.4825 |
1.4968 |
1.5000 |
| USD/JPY |
107.00 |
107.56 |
108.30 |
109.98 |
110.58 |
| GBP/USD |
2.0457 |
2.0519 |
2.0610 |
2.0761 |
2.0846 |
| AUD/USD |
0.8606 |
0.8654 |
0.8815 |
0.8997 |
0.9073 |
| XAU/USD |
771.50 |
773.00 |
824.00 |
845.80 |
846.45 |
·Euro – 1.4825
Initial support at 1.4776 (Nov 21 low) followed by 1.4636 (Nov 20 low). Initial resistance is now located at 1.4968 (Nov 23 trend high) followed by 1.5 (Psychological resistance).
·Yen – 108.30
Initial support is located at 107.56 (Nov 23 trend low) followed by 107.00 (Round number support). Initial resistance is now at 109.98 (Nov 21 high) followed by 110.58 (Nov 20 high)
·Pound – 2.0610
Initial support at 2.0519 (Nov 23 low) followed by 2.0457 (Nov 20 low). Initial resistance is now at 2.0761 (Nov 23 high) followed by 2.0846 (Nov 14 high)
·Australian Dollar – 0.8815
Initial support a 0.8654 (Nov 21 low) followed by 0.8606 (Sep 21 low). Initial resistance is now at 0.8997 (Nov 19 high) followed by 0.9073 (Nov 14 high)
·Gold – 824
Initial support at 773.00 (Nov 20 low) followed by 771.50 (Oct 19 low). Initial resistance is now at 845.8 (Nov 7 trend high) followed by 846.45 (November open + (October range*0.618))
