Non Farm Payrolls key interest, XAU at fresh 28 year highs

U.S. Dollar Trading (USD) eased further on Thursday as investors increased speculation that the Federal Reserve will cut rates by a further half a percentage point this month to prevent a recession. On the data front ADP employment, often considered as a preview to the much anticipated NFP release, came in at 40k for the month of December (Forecast: 50k) prompting traders to assume a negative release on jobs data come Friday. In U.S. share markets the NASDAQ was down -6.95 points (-0.27%) whilst the Dow Jones rebounded slightly to 12.76 points (+0.10%). Crude oil was down by US$0.47 a barrel to US$99.15. Looking ahead, Jobs data out of the U.S. continues, with the release of Non Farm Payrolls for the month of December expected to come in at 70K (Prior: 95K), whilst Unemployment rate could rise to 4.8% from the previous 4.7%. In other key releases, ISM Services is expected to come in at 53.5 for December, down from the previous release of 54.1.  

The Euro (EUR) gained against the dollar on Thursday, despite having touched a month low during the session ahead of ADP employment data from the U.S. The EURUSD traded with a low of 1.4688 and a high of 1.4782 before closing the day at 1.4745 in the New York session. Looking ahead, PMI Services out of the Eurozone is expected to come in at 53.2 (Previous: 54.1) whilst the Consumer Prices (HICP) is expected to remain flat as previous at 3.1%

The Japanese Yen (JPY) continued to strengthen versus the USD, with the USDJPY trading at a low 108.25, the lowest level since Nov. 27. Overall the USJPY traded with a low of 108.25 and a high of 109.75 before closing the session at 109.32. 

The Sterling (GBP) once again was heavily pressured trading at a fresh record low versus EUR. Much of the moves were attributed by the BoE confirming that lenders would reduce the supply of credit both privately and commercially in the first quarter of 2008, threatening to deepen the economic slow down. The GBPUSD traded at a week low of 1.9708 and a high of 1.9838 before closing the day at 1.9751 in the New York session. Key data out of the UK on Friday includes Mortgage Approvals and PMI services. 

The Australian Dollar (AUD) was range bound in light of absent data, tracking moves of other majors. Overall the AUDUSD traded with a low of 0.8788 and a high of 0.8850 before closing the day at 0.8811 in the New York session.

Gold (XAU) approached a record high on speculation rising commodity costs and a weakening dollar will boost demand for an inflation hedge. XAU traded with a low of 853.75 and a high of 869.05 setting fresh 28 year highs.
 
TECHNICAL COMMENTARY

Euro – 1.4740
Initial support at 1.4688 (Jan 3 low) followed by 1.4570 (Dec 31 low). Initial resistance is now located at 1.4785 (Nov 30 high) followed by 1.4859 (Dec 11 high).
 
Yen – 109.55
Initial support is located at 108.25 (Jan 3 low) followed by 107.23 (Nov 26 trend low). Initial resistance is now at 109.76 (Jan 3 high) followed by 112.15 (Jan 2 high)
 
Pound – 1.9735
Initial support at 1.97 (Dec 26 low) followed by 1.9653 (Aug 17 reaction low). Initial resistance is now at 1.9838 (Jan 3 high) followed by 1.9898 (Jan 2 high)
 
Australian Dollar – 0.8810
Initial support a 0.8759 (Jan 2 ) followed by 0.8690 (Dec 25 low). Initial resistance is now at 0.8852 (Jan 2 high) followed by 0.8907 (Dec 12 reaction high)
 
Gold – 862.80
Initial support at 833.90 (Jan 2 low) followed by 824.90 (Dec 28 low). Initial resistance is now at 869.50 (Jan 3 high) followed by 874.27 (Jan open + (Dec * range 0.618)