EURO at record high, AUD at 23 high, as FOMC rate announcement looms

U.S. Dollar Trading (USD) fell further against a number of majors as the much anticipated October 31 Fed meeting grows nearer. Relief was seen on the dollar however as speculation that a 50 basis point rate cut, may not eventuate. In U.S. share markets the NASDAQ was up 13.25 points (+0.47%) whilst the Dow Jones was also up 63.56 points (+0.46%). Crude oil reached a fresh record high once again on Monday, gaining US$1.67 a barrel to US$93.53, having traded earlier at US$93.80. Consumer confidence will be released out of the U.S. on Tuesday. (Forecast: 99, Previous: 99)    
 
The Euro (EUR) traded at a fresh record high in yesterdays session, before any further upside moves were limited on views that the FOMC may not look to slash rates by 50 bp. The EURUSD traded with a low of 1.4378 and a high of 1.4438 before closing the day at 1.4424 in the New York session. The Euro zone’s largest economy in Germany will release a heavy slate of Jobs data on Tuesday.
 
The Japanese Yen (JPY) failed to gain any boost from a positive retail sales figure. The JPY eased to its lowest level in 4 weeks as rebounding stock prices enticed speculators back into the high yielding carry trade. Overall the USDJPY traded at a low of 114.01 and a high of 114.90 before closing the session at 114.59. Unemployment rate in Japan for the month of September did little to spur Yen strength on Tuesday morning with the figure being released at 4%, higher than the previous and forecasted 3.8% reading.  
 
The Sterling (GBP) returned to a near 26 year high versus the USD ahead of the Wednesdays FOMC meeting, in which the Fed may cut, whilst the BoE is likely to hold in November. Despite a decline in mortgage lending for September down to 102K from the previous 108K, the lowest level in 26 months. Overall the GBPUSD traded with a low of 2.0531 and a high of 2.0631 before closing the day at 2.0617 in the New York session. 
 
The Australian Dollar (AUD) broke through key levels of 92 cents upon the Asian session, once again trading at a fresh 23 year high. The AUDUSD traded with a low of 0.9190 and a high of 0.9272 before closing the session at 0.9208 in the New York session.
 
The Swiss Franc (CHF) fell against the Euro as a rally in global stocks and rising commodity prices stoked investor appetite for riskier, higher-yielding currencies. Overall the USDCHF traded with a low of 1.1608 and a high of 1.1670 before closing the day at 1.1649 in the New York session.
 
Gold (XAU) traded at a fresh 27 year high, within striking distance of the key $800 level, aided by record price in Oil, and a market in anticipation of a rate cut out of the U.S. XAU traded with a low of 784.90 and a high of 794.40 

TECHNICAL COMMENTARY

Euro 1.4415
 
Initial support at 1.4316 (Oct 26 low) followed by 1.4248 (Oct 25 low). Initial resistance is now located at 1.4439 (Oct 29 trend high) followed by 1.4469 (This week’s open + last week’s range)
                                        
Yen 114.70
 
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 – 2.0610
Initial support at 2.0481 (Oct 26 low) followed by 2.0427 (Oct 24 low). Initial resistance is now at 2.0643 (Oct 29 high) followed by 2.0654 (Jul 24 trend high)
 
Australian Dollar – 0.9225
Initial support a 0.9076 (Oct 26 low) followed by 0.9010 (Oct 25 low). Initial resistance is now at 0.9272 (Oct 29 trend high) followed by 0.9341 (This week’s open + (last week’s range * 1.618).
                                                                                
Gold – 789.60
Initial support at 769.80 (Oct 26 low) followed by 762.00 (Oct 25 low). Initial resistance is now at 794.70 (Oct 29 trend high) followed by 800.00 (Round number resistance)