Stock prices influence FX markets once again. Aussie PPI to be released ahead of RBA rate hike expectations next month.

Currency Trading Summary

U.S. Dollar Trading (USD) was mixed versus a number of majors on Friday on a relatively quiet day of trading when compared to recent sessions. The Michigan sentiment survey proved to be key piece of data to end the week coming in at 80.5 for January better then expectations of 74.5. In U.S. share markets the NASDAQ was down -6.88 points (-0.29%) whilst the Dow Jones was also down by -59.91 points (-0.49%). Crude oil did well to rebound as demand for heating oil increased following the recent cold snap in the North Americas.

The Euro (EUR) fell to its lowest level since Jan 2 touching 1.4589 in the New York session. The EUR traded with a low of 1.4589 and a high of 1.4695 before closing the session at 1.4619 in the New York trade.  

The Japanese Yen (JPY) once again tracked equity prices throughout the day of trade. The Yen headed for a weekly gain against the Dollar and Euro on speculation economic stimulus measures proposed by U.S. President George W. Bush will fail to avert a recession. Bush said an economic growth package of about $140 billion was needed “as soon as possible” to keep the U.S. economy growing. Ensuring that the package totaled almost 1% of gross domestic product. Overall the USDJPY traded with a low of 106.36 and a high of 107.59 before closing the day at 106.84 in the New York session. 

The Sterling (GBP) fell against the dollar and the Euro after a government report showed U.K. retail sales unexpectedly fell in December by the most in 11 months, adding to evidence the economy is faltering. Retail Sales for the month of December were released below forecast at -0.4%/2.7% as opposed to 0.2%/3.3%. Overall the GBPUSD traded with a low of 1.9515 and a high of 1.9727 before closing the day at 1.9555. 

The Australian Dollar (AUD) tracked other majors as emphasis was placed on equity markets pushing the AUDJPY pair lower to 92.79. Overall the AUDUSD traded with a low of 0.8701 and a high of 0.8850 before closing the day at 0.8793 in the New York session. Looking ahead, PPI data is scheduled for release on Monday

Gold (XAU) was volatile once again, tracking energy prices. XAU slid to 870.10 an ounce during the Asian session before rebounding to trade at a high of 888.20 
 

TECHNICAL COMMENTARY

Euro – 1.4600
Initial support at 1.4590 (Jan 17 low) followed by 1.4570 (Dec 31 reaction low). Initial resistance is now located at 1.4716 (Jan 17 high) followed by 1.4859 (Jan 16 high).
 
Yen – 106.70
Initial support is located at 106.36 (Jan 18 low) followed by 105.92 (Jan 16 low). Initial resistance is now at 107.95 (Jan 16 high) followed by 108.52 (61.8% retracement of the 110.12 to 105.92 decline)
 
Pound – 1.9570
Initial support at 1.9484 (Jan 11 low) followed by 1.9432 (Mar 20 low). Initial resistance is now at 1.9727 (Jan 18 high) followed by 1.9793 (Jan 8 high)
 
Australian Dollar – 0.8785
Initial support a 0.8684 (Jan 7 reaction low) followed by 0.8580 (Dec 21, 2007 low). Initial resistance is now at 0.8881 (Jan 17 high) followed by 0.9022 (Jan 15 high)
 
Gold – 882.80
Initial support at 870.40 (Jan 18 low) followed by 866.5 (Jan 10 low). Initial resistance is now at 890.30 (Jan 17 high) followed by 899.75 (Jan 16 high)