Rebounding stock prices prompt traders to re-enter carry trades. BoJ keep rates on hold

U.S. Dollar Trading (USD) eased capping its two previous session of rallies against a basket of majors. Reports circulated that the U.A.E may look to offload the Dirham’s peg with the dollar according to one of the central bank officials. The U.S. dollar suffered as rebounding stock prices placed high yielder’s back in favor. In U.S. share markets the NASDAQ was up +89.52 (+3.46) whilst the Dow Jones also gained by +319.54 (2.46%). Crude oil fell by US$3.35 a barrel to US$91.30. Looking ahead, Retail Sales, and PPI appear to be key data releases today. Whilst Ben Bernanke is scheduled to speak today.
 
The Euro (EUR) was able to gain 0.5% throughout the day following views that the UAE would cease its ties with the USD and was further buoyed by rebounding stock prices. Overall the EURUSD traded with a low of 1.4522 and a high of 1.4633 before closing the day at 1.4607 in the New York session. GDP data out of the EZ will accompany talks scheduled by ECB president Trichet.
 
The Japanese Yen (JPY) fell across the board as rebounding stock prices re-instated traders appetite for risk. Further more the BoJ kept rates unchanged with an 8 to 1 vote, with Mizuno the dissenter once again voting for a rate hike. In Accompanying statements Governor Toshihiko Fukui gave no indication of when the central bank would increase interest rates following Tuesday’s policy meeting. The decline was compounded following Prime Minister Yasuo Fukuda warnings about the pace of the Yen's advance. Overall the USDJPY traded with a low of 109.23 and a high of 110.52 before closing the day at 110.17 in the New York session. 
 
The Sterling (GBP) was buoyed by strong CPI readings coming in well above expectations at 2.1% figure for the year, above the BoE target of 2%. The GBP was also buoyed by a return to carry trades favoring its role as a high yielding currency. Overall the GBPUSD traded with a low of 109.23 and a high of 110.52 before closing the day at 110.70 in the New York session.
 
The Australian Dollar (AUD) paired its previous session losses to trade higher as speculators returned to risky carry trades. Overall the AUDUSD traded with a low of 0.8754 and a high of 0.8949 before closing near day highs of 0.8964 in the New York session. 
 
Gold (XAU) fell for a third straight session after a drop in energy costs reduced the appeal of the precious metal as a hedge against inflation. XAU traded with a low of 791.60 and a high of 808.70. 
 
TECHNICAL COMMENTARY

Euro 1.4620
Initial support at 1.4467 (Nov 6 low) followed by 1.4419 (Nov 2 low). Initial resistance is now located at 1.4731 (Nov 7 high) followed by 1.4782 (Nov open + (Oct range * 0.618)
                                        
Yen 111.20
Initial support is located at 109.13 (Nov 12 low) followed by 108.99 (May 17, 2006 reaction low). Initial resistance is now at 112.88 (Nov 9 high) followed by 113.38 (Nov 1 high).
 
Pound – 2.0750
Initial support at 2.0427 (Oct 24 low) followed by 2.0304 (Oct 23 low). Initial resistance is now at 2.0922 (Nov 12 high) followed by 2.1161 (Nov trend line)
 
Australian Dollar – 0.9005
Initial support a 0.8749 (Oct 22 low) followed by 0.8714 (Nov 1 reaction low). Initial resistance is now at 0.9331 (Nov 8 high) followed by 0.9400 (Nov 7 trend high).
                                                                                
Gold – 803.20
Initial support at 788.40 (Nov 2 low) followed by 784.40 (Nov 1 low). Initial resistance is now at 845.80 (Nov 7 trend high) followed by 846.15 (November open + (October range * 0.618)