ECB Officials hint at slowing growth, as US CPI figures remain stable

U.S. Dollar Trading (USD) saw key inflationary measures released on expectations, with Core CPI coming in at 0.2%, whilst headline figures were released at 0.3% (Forecast: 0.2%). In other data news TIC Flows increased to 150 billion. In U.S. share markets the NASDAQ was down -98.74 points (-1.08%) whilst the Dow Jones -34.95 points (-0.28%). Crude oil fell by US$1.04 a barrel to US$ 90.86 as data revealed a large rise US inventory stocks. A heavy data day is expected from the US tonight as Housing Starts, Philly Fed and Fed reserve Bernanke, Fischer and Lockhart are scheduled to discuss the economic outlook. In key profit earnings releases, Merrill Lynch proves to be the largest bank scheduled on Thursday.  

The Euro (EUR) was volatile as ECB officials warned that growth could be slower than expected. CPI figures out of the Eurozone were flat on yearly expectations whilst the monthly figures grew a faster pace. Overall the EURUSD traded with a low of 1.4594 and a high of 1.4860 before closing the day at 1.4647 in the New York session. Trade Balance data as well as comments from Trichet and Almunia in Cyprus will prove key to the Euro in Thursday’s session of trading. 

The Japanese Yen (JPY) returned to its pressured nature as carry trades were rebuilt. Overall the USDJPY traded with a low of 105.93 and a high of 107.93 before closing the day at 107.80 in the New York session.

The Sterling (GBP) saw unemployment figures come in at an expected 5.3%. Overall the GBPUSD traded with a low of 1.9533 and a high of 1.9709 before closing the day at 1.9634 in the New York session.

The Australian Dollar (AUD) eased from highs after rebounding in the Asian session, following the previous days sell off. The AUDUSD traded with a low of 0.8761 and a high of 0.8848 before closing the day at 0.8807 in the New York session. Unemployment rate for December was released at 4.3% on Thursday morning.

Gold (XAU) fell for its second consecutive session, as prices tumbled by US$16.10 an ounce to US$886.50 in response to lower oil prices and sturdy dollar 
 
TECHNICAL COMMENTARY

Euro – 1.4675
Initial support at 1.4570 (Dec 31 reaction low) followed by 1.4544 (61.8% retracement of the 1.4311 to 1.4922 advance). Initial resistance is now located at 1.4859 (Jan 16 high) followed by 1.4922 (Jan 14 high).
 
Yen – 106.65
Initial support is located at 105.92 (Jan 16 low) followed by 105.00 (Round Number Support). Initial resistance is now at 107.95 (Jan 16 high) followed by 108.52 (61.8% retracement of the 110.12 to 105.92 decline)
 
Pound – 1.9630
Initial support at 1.9484 (Jan 11 low) followed by 1.9432 (Mar 20 low). Initial resistance is now at 1.9720 (Jan 16 high) followed by 1.9742 (Jan 15 high)
 
Australian Dollar – 0.8820
Initial support a 0.8732 (61.8% retracement of the 0.8553 0.9022 advance) followed by 0.8684 (Jan 7 reaction low). Initial resistance is now at 0.9022 (Jan 15 high) followed by 0.9076 (61.8% retracement of the 0.9400 to 0.8553 decline)
 
Gold – 896.60
Initial support at 874.85 (Jan 16 low) followed by 866.5 (Jan 10 low). Initial resistance is now at 899.75 (Jan 16 high) followed by 914.27 (Jan 14 high)