U.S. Dollar Trading (USD) risk assets gained overnight at the expense of theDollar after US Q4 company earnings continued to beat estimates. S&P500rallied to fresh five year highs ahead of the FOMC rate decision later today. Therecent run of good economic data and climbing Treasury yields is leading someanalysts to bring forward their FED timetable to normalize US monetary policy. Looking ahead, FOMC Rate announcement forecast at hold at 0.25%. AlsoQ4 GDP Advance forecast at 1.1% vs. 3.1% previously.
The Euro (EUR) the EUR/USD stalled at 1.3500 unable to break abovethe key psychological resistance and letting other currencies play catch up.EUR/GBP fell back to lower 0.8500 region as the GBP/USD bounced but the uptrendis still strong and if the EUR/USD break 1.3500 we may see all the Euro crossessurge higher. The Sterling (GBP) the Pound spent most of the day in recovery moderebounding from 1.5700 to 1.5760 in a quiet grind higher. The recent selling inthe Pound is anticipating of further QE from the BOE or at least Jawboning fromthe BOE Members and new BOE Governor Carney (starts July 2013). Looking ahead, December UK Mortgage Approvals forecast at 54.5k vs. 54k previously.
The Japanese Yen (JPY) USD/JPY spent another day consolidating falling backto Y90.30 before strong buying emerged and we once again finished near Y91highs. EUR/JPY had a similar chart pattern for the day but exaggerated therange down to Y121.50 before reversing to Y122.50. Market chatter suggests that there are large buyorders in the lower Y90 region and large unfilled Japanese exporters above Y91. Australian Dollar (AUD)the Aussie had apositive day rising with the US stock markets and taking a break from theconstant selling seen on Friday and Monday. NAB Business Confidence gained 10points in a good sign that the economy was picking up and recent RBA rate cutswere taking effect.Looking ahead, December Japanese Retail Sales forecastat 0.4% vs. 1.2% previously.
Oil & Gold (XAU) Gold was able to bounce off lows for small gainsthat where capped at $1666. Today’s FOMC announcement is extremely importantfor the precious metal. OIL/USD is perhaps the strongest trend in the market withbuyers pushing through resistance daily. Overnight we closed at $97.50/b with$100/b a natural target for the bulls from here.
Pairs to watch
USD/JPY the mostsensitive currency to US FOMC changes
XAU/USD hedges againstUS FED Bond Buying to be unwound?
Daily Outlook 00:00 GMT 30-January-2013
US FOMC and Q4 GDP Ahead
U.S. Dollar Trading (USD) risk assets gained overnight at the expense of theDollar after US Q4 company earnings continued to beat estimates. S&P500rallied to fresh five year highs ahead of the FOMC rate decision later today. Therecent run of good economic data and climbing Treasury yields is leading someanalysts to bring forward their FED timetable to normalize US monetary policy. Looking ahead, FOMC Rate announcement forecast at hold at 0.25%. AlsoQ4 GDP Advance forecast at 1.1% vs. 3.1% previously.
The Euro (EUR) the EUR/USD stalled at 1.3500 unable to break abovethe key psychological resistance and letting other currencies play catch up.EUR/GBP fell back to lower 0.8500 region as the GBP/USD bounced but the uptrendis still strong and if the EUR/USD break 1.3500 we may see all the Euro crossessurge higher. The Sterling (GBP) the Pound spent most of the day in recovery moderebounding from 1.5700 to 1.5760 in a quiet grind higher. The recent selling inthe Pound is anticipating of further QE from the BOE or at least Jawboning fromthe BOE Members and new BOE Governor Carney (starts July 2013). Looking ahead, December UK Mortgage Approvals forecast at 54.5k vs. 54k previously.
The Japanese Yen (JPY) USD/JPY spent another day consolidating falling backto Y90.30 before strong buying emerged and we once again finished near Y91highs. EUR/JPY had a similar chart pattern for the day but exaggerated therange down to Y121.50 before reversing to Y122.50. Market chatter suggests that there are large buyorders in the lower Y90 region and large unfilled Japanese exporters above Y91. Australian Dollar (AUD)the Aussie had apositive day rising with the US stock markets and taking a break from theconstant selling seen on Friday and Monday. NAB Business Confidence gained 10points in a good sign that the economy was picking up and recent RBA rate cutswere taking effect.Looking ahead, December Japanese Retail Sales forecastat 0.4% vs. 1.2% previously.
Oil & Gold (XAU) Gold was able to bounce off lows for small gainsthat where capped at $1666. Today’s FOMC announcement is extremely importantfor the precious metal. OIL/USD is perhaps the strongest trend in the market withbuyers pushing through resistance daily. Overnight we closed at $97.50/b with$100/b a natural target for the bulls from here.
Pairs to watch
USD/JPY the mostsensitive currency to US FOMC changes
XAU/USD hedges againstUS FED Bond Buying to be unwound?
TECHNICALCOMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.3349
1.3410
1.3495
1.3527
1.3550
USD/JPY
88.17
89.15
90.95
91.82
92.03
GBP/USD
1.5678
1.5706
1.5750
1.5852
1.5905
AUD/USD
1.0375
1.0395
1.0470
1.0485
1.0505
XAU/USD
1633.00
1652
1665
1666
1685
OIL/USD
95.00
96.00
97.50
97.80
98.00
By Anthony Darvall (TonyD)
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
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