Euro and Crude trade at record highs. AUD trades above 92 cents

U.S. Dollar Trading (USD) eased further to end the week as markets pre-empt another rate cut from the Federal Reserve on October 31st. Poor data out of the U.S. gave support to this view as consumer confidence reports on Friday fell to 80.9 for the month of October from the previous 83.4 (the lowest level since May 2006), short of forecasted figures of 82. Compounding the bearish view on the USD came after Countrywide Financial Corp., the biggest U.S. mortgage lender, reported its first quarterly loss in 25 years as borrowers defaulted on loans, pushing the dollar to its third weekly decline against the Euro. In U.S. share markets the NASDAQ was up 53.33 points (1.94%) whilst the Dow Jones also gained 134.78 points (0.99%)  Record Oil prices also ensured that consumer sentiment was weighed upon, with Crude oil trading at a high of US$92.22, before closing the session having gained US$1.40 a barrel to US$91.86.
 
The Euro (EUR) traded at fresh record highs on a broadly weaker dollar following sustained credit turmoil. The Euro headed towards its third weekly gain against the greenback as consumer confidence did little to provide any relief. Overall the EURUSD traded with a low of 1.4317 and a high of 1.4394 before closing the day at 1.4385 in the New York session.
 
The Japanese Yen (JPY) failed to gain any boost from consumer price data, which fell for an eighth consecutive month in September, dousing any claims of an increase in interest rates in the near term. Overall the USDJPY traded with a low of 113.92 and a high of 114.57 before closing the day at 114.23 in the New York session.
 
The Sterling (GBP) was flat against the USD and fell versus the Euro on growing expectations the BoE will look to cut rates by the end of 2007. Private reports viewed that the British economy will slow in growth in 2008 widening the Treasury’s budget deficit, whilst the BoE confirmed that commercial property and financial markets remained vulnerable to further turmoil. Overall the GBPUSD traded with a low of 2.0483 and a high of 2.0573 before closing the day at 2.0519 in the New York session. Second tier data may hold significant importance to begin the week, with the UK economy expected to release data pertaining to consumer credit and mortgage lending.
 
The Australian Dollar (AUD) traded at fresh 23 year highs, buoyed by a weaker USD and a surge in commodities and energy prices. Overall the AUDUSD traded with a low of 0.9078 and a high of 9178 before closing the day at 0.9171 in the New York session. In the early part of the Asian session, the AUD broke through key 0.9200 levels to at a high of 0.9215.  
 
The South African Rand (ZAR) posted its biggest weekly gain in more than 3 ½ years against the dollar, boosted by a rise in commodity prices and speculation of capital inflows from abroad. Overall the USDZAR traded with a low of 6.5451 and a high of 6.5040 before closing at 6.0520.
 
Gold (XAU) traded at a fresh high since 1980 on its appeal to hedge inflationary risk. XAU traded with a low of 768.85 and a high of 784.15.

TECHNICAL COMMENTARY 

Euro 1.4410
 
Initial support at 1.4316 (Oct 26 low) followed by 1.4248 (Oct 25 low). Initial resistance is now located at 1.4469 (This week’s open + last week’s range) followed by 1.4530 (Mar 8, 1995 trend high)
                                        
Yen 114.10
 
Initial support is located at 113.78 (Oct 25 low) followed by 113.26 (Oct 22 low). Initial resistance is now at 115.04 (Oct 23 high) followed by 115.72 (Oct 18 high).
 
Pound – 2.0540
Initial support at 2.0481 (Oct 26 low) followed by 2.0427 (Oct 24 low). Initial resistance is now at 2.0574 (Oct 26 high) followed by 2.0654 (Jul 26 high)
 
Australian Dollar – 0.9200
Initial support a 0.9076 (Oct 26 low) followed by 0.9010 (Oct 25 low). Initial resistance is now at 0.9341 (This week’s open + (last week’s range * 1.618) followed by 0.9500 (Round number resistance).
                                                                                
Gold – 785.60
Initial support at 769.80 (Oct 26 low) followed by 762.00 (Oct 25 low). Initial resistance is now at 785.90 (Oct 26 trend high) followed by 790.41 (602.42 plus 542.45 – 730.40)