Light data session, currencies range bound leading into weekend. Gold reaches new highs.

Currency Trading Summary

U.S. Dollar Trading (USD) was mixed against the majors as a fall in US equities prompted market participants to further seek US treasuries as safe haven assets. In what was a quiet night for data releases for U.S. share markets the NASDAQ was down by 34.72 points (-1.47%) whilst the Dow Jones also pulled back by 171.44 points (-1.38%). Crude oil rose by US$1.30 a barrel to US$90.17 as the US economic stimulus package gave a boost to market hopes of a lift in oil demand from the world’s largest energy consumer. Looking ahead, the State of the Union address and new home sales are due today.

The Euro (EUR) was slightly weaker against the greenback as the currency was caught in a trading range in the absence of key economic data releases. Overall the EURUSD traded with a low of 1.4660 and a high of 1.4777 before closing the day at 1.4670 in the New York session.

The Japanese Yen (JPY) gained against the US dollar as the fall in US equities prompted a pullback in dollar-yen and other yen crosses. Overall the USDJPY traded with a low of 107.01 and a high of 107.90 before closing the day at 107.02 in the New York session. Looking ahead, jobless rate, household spending, and retail sales are due out tomorrow.

The Sterling (GBP) rose against dollar benefiting from trimmed expectations of rate cuts from the Bank of England after a MPC member spoke to Reuters with regards to four quarter point cuts may be overdone. Overall the GBPUSD traded with a low of 1.9746 and a high of 1.9803 before closing the day at 1.9803 in the New York session.

The Australian Dollar (AUD) was relatively unchanged as the Aussie moved in step with other majors in the absence of market moving economic data. Overall the AUDUSD traded with a low of 0.8773 and a high of 0.8853 before closing the day at 0.8799 in the New York session.

Gold (XAU) reached new highs after the top three gold producers shut down their South African gold mines due to a power crisis. Coupled with higher oil prices and expectations of further US rate cuts, gold soared to USD$923.40 an ounce. XAU finished at USD$914 an ounce.
 
TECHNICAL COMMENTARY

Euro – 1.4700
Initial support at 1.4588 (Jan 23 low) followed by 1.4507 (61.8% retracement of the 1.4366 to 1.4685 advance). Initial resistance is now located at 1.4790 (Jan 23 high) followed by 1.4859 (61.8% retracement of the 1.4922 to 1.4366 decline).
 
Yen – 106.70
Initial support is located at 104.97 (Jan 23 low) followed by 104.91 (May 11, 2005 low). Initial resistance is now at 107.89 (Jan 25 high) followed by 107.95 (Jan 16 high)
 
Pound – 1.9850
Initial support at 1.9462 (61.8% retracement of the 1.9338 to 1.9645 advance) followed by 1.9338 (Jan 22 low). Initial resistance is now at 1.9850 (Jan 23 high) followed by 1.9898 (Jan 18 high)
 
Australian Dollar – 0.8795
Initial support a 0.8513 (Jan 22 low) followed by 0.8488 (Sep 19, 2007 low). Initial resistance is now at 0.8748 (Jan 23 high) followed by 0.8768 (50% retracement of the 0.9022 to 0.8513 decline)
 
Gold – 914.50
Initial support at 876.80 (Jan 22 low) followed by 849.50 (61.8% retracement of 775.50 to 914.30 advance). Initial resistance is now at 923.70 (Jan 25 high) followed by 925.0 (Psychological round number)