U.S. Dollar Trading (USD) US traders returned on Tuesday to a looming government debt debate dubbed the ‘fiscal cliff’. In 2013 tax cuts expire and slashed government spending could combine to push the US economy back into recession. US stocks finished negative once again but markets were closed on Monday so some of this fall was just playing catch up with other Indices around the world. Looking ahead, September Retail Sales forecast at -0.2% vs. 1.1% previously. Also released, PPI forecast at 0.2% vs. 1.1% previously.
The Euro (EUR) fell below 1.2700 in Europe as Germans ZEW report to -15.7 vs. -9.9 expected. Support was found at 1.2670 and we bounced during the US session with rumors that Spain may ask for a bailout and that Greece might receive more than 30bn with multiple payments at the same time. The Sterling (GBP) spent most of the day between 1.5860-1.5900. But sellers remain in control for now with the Euro led weakness dominating the market. Strong support is seen at the 1.5850-60 where the 200 DMA is major technical level. Looking ahead, UK Claimant Count forecast at -0.5k vs. -4.0k previously. Also September UK Unemployment Rate forecast at 7.9% vs. 7.9% previously.
The Japanese Yen (JPY) USD/JPY tracked stocks lower then back up yesterday with EUR/JPY leading the market in Asia. AUD/JPY is doing well back at Y83 after being bought aggressively on dips. USD/JPY closed at Y79.50 and is likely to remain range trading. Australian Dollar (AUD) dipped under 1.0400 briefly but strong buying has seen the uptrend resume during the US session and we are close to the 1.0440 resistance. Falling expectations that the RBA would be cutting rates has changed the feel of the AUD and the soft landing for China’s economy has put the focus back on the topside. Looking ahead, Update Q3 New Zealand Retail Sales forecast at 2.1% vs. 4.8% previously.
Oil & Gold (XAU) Gold dipped below $1720 before bouncing back above $1730 in the US session before settling into the close of trade. Gold topside is in view but buyers will get impatient at the lack of progress soon. OIL/USD has been extremely weak in the last few sessions with overnight’s no exception struggling to fund support under $85. The slowing global economy forecast 2013 is weighing.
Fiscal
Cliff Debate Begins
U.S. Dollar Trading (USD) US traders
returned on Tuesday to a looming government debt debate dubbed the ‘fiscal
cliff’. In 2013 tax cuts expire and slashed government spending could combine to
push the US economy back into recession. US stocks finished negative once again
but markets were closed on Monday so some of this fall was just playing catch
up with other Indices around the world. Looking ahead, September
Retail Sales forecast at -0.2% vs. 1.1% previously. Also released, PPI forecast
at 0.2% vs. 1.1% previously.
The Euro (EUR) fell below 1.2700
in Europe as Germans ZEW report to -15.7 vs. -9.9 expected. Support was found
at 1.2670 and we bounced during the US session with rumors that Spain may ask
for a bailout and that Greece might receive more than 30bn with multiple
payments at the same time. The Sterling (GBP) spent most of the
day between 1.5860-1.5900. But sellers remain in control for now with the Euro
led weakness dominating the market. Strong support is
seen at the 1.5850-60 where the 200 DMA is major technical level. Looking ahead, UK
Claimant Count forecast at -0.5k vs. -4.0k previously. Also September UK
Unemployment Rate forecast at 7.9% vs. 7.9% previously.
The Japanese Yen (JPY) USD/JPY tracked
stocks lower then back up yesterday with EUR/JPY leading the market in Asia.
AUD/JPY is doing well back at Y83 after being bought aggressively on dips.
USD/JPY closed at Y79.50 and is likely to remain range trading. Australian
Dollar (AUD) dipped under 1.0400 briefly but
strong buying has seen the uptrend resume during the US session and we are
close to the 1.0440 resistance. Falling expectations
that the RBA would be cutting rates has changed the feel of the AUD and the
soft landing for China’s economy has put the focus back on the topside. Looking ahead, Update Q3 New Zealand Retail
Sales forecast at 2.1% vs. 4.8% previously.
Oil & Gold (XAU) Gold dipped below
$1720 before bouncing back above $1730 in the US session before settling into
the close of trade. Gold topside is in view but buyers will get impatient at
the lack of progress soon. OIL/USD has been extremely
weak in the last few sessions with overnight’s no exception struggling to fund
support under $85. The slowing global economy forecast 2013 is weighing.
Pairs to watch
EUR/USD Time for short cover?
AUD/USD Buyers to retest year highs at 1.0620?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2561
1.2690
1.2705
1.2739
1.2791
USD/JPY
79.10
79.21
79.60
79.80
80.10
GBP/USD
1.5800
1.5850
1.5870
1.5916
1.6000
AUD/USD
1.0386
1.0405
1.0430
1.0455
1.0480
XAU/USD
1711.00
1720
1726
1742
1752
OIL/USD
84.10
85.00
85.45
86.50
87.00
By Anthony Darvall (TonyD)
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
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