U.S. Dollar Trading slid somewhat against the majors in the overnight foreign exchange trading session

CURRENCY TRADING SUMMARY
U.S. Dollar Trading (USD) slid somewhat against the majors in the overnight foreign exchange trading session as former Federal Reserve Chairman Greenspan warned of US dollar weakness. Alan Greenspan warned investors to expect “a few years of dollar weakness.” In other markets, the Dow Jones index rose 20pts and the NASDAQ gained 5pts as the market awaits the decision on interest rates by the FOMC. Crude oil fell by US66c to US$61.37 a barrel as the market awaits for possible cuts this week. Looking ahead, US trade balance is due out tonight as well as the FOMC interest rate decision.

The Euro (EUR) traded within a low of 1.3131 and a high of 1.3262, before closing at 1.3250 in the New York session. Looking ahead, the ZEW survey is due out today.

The Japanese Yen (JPY) traded within a low of 116.18 and a high of 117.23 versus the dollar, before closing at 116.87 in the New York session. On the data front, consumer confidence came in at 48.7 for November compared to 48.2 previously. Looking ahead, current account is due out tomorrow. 

The Sterling (GBP) traded within a low of 1.9469 and a high of 1.9593, before closing at 1.9585 in the New York session. On the data front, core PPI came in at 0.2% compared to a 0.1% estimate. UK trade balance came in better at -6.33% compared to a -6.6% estimate. Looking ahead, CPI is due out tonight.

The Australian Dollar (AUD) traded within a low of 0.7815 and a high of 0.7868, before closing at 0.7849 in the New York session.

Gold (XAU) rose by US$2.80 to US$633.80 an ounce as bargain hunters entered the market despite a drop in oil prices.

Euro 1.3250
Initial support at 1.313 (Dec 11 low) followed by 1.303 (38.2% retracement of the 1.2483 to 1.3368 advance). Initial resistance is now located at 1.3368 (Dec 4 high) followed by 1.344 (Mar 16, 2005 high).

Yen 116.90
Initial support is located at 116.17 (Dec 11 low) followed by 114.89 (Dec 8 low). Initial resistance is now at 117.26 (Dec 11 high) followed by 117.62 (76.4% retracement of the 118.61 to 114.43 decline).

Pound  1.9600
Initial support at 1.9463 (38.2% retracement of the 1.8838 to 1.9849 advance) followed by 1.9434 (Nov 29 reaction low). Initial resistance is now at 1.9729 (Dec 8 high) followed by 1.9849 (Dec 1 high).

Australian Dollar  0.7855
Initial support at 0.7811 (38.2% retracement of the 0.7614 to 0.7933 advance) followed by 0.7769 (Former resistance from Nov 1). Initial resistance is now at 0.7933 (Dec 8 trend high) followed by 0.799 (Mar 8, 2005 high).

Gold  629
Initial support at 621.0 (Nov 20 low) followed by 614.8 (Nov 17 reaction low). Initial resistance is now at 638.1 (Dec 8 high) followed by 650.2 (Dec 1 high).