US ISM Manufacturing records its lowest reading since January. UK and AUS release there retail sales figures

U.S. Dollar Trading (USD) was mixed against a number of majors as reports surrounding Manufacturing ISM eased slightly from 50.9 to 50.8 for the month of Nov, yet higher than the mean forecast pf 50.4. The data confirmed its fifth consecutive decline and it lowest reading since January. In U.S. share markets the NASDAQ was down -23.83 points (-0.90%) whilst the Dow Jones -57.15 points (-0.43%). Crude Oil was up by US$0.91 a barrel to US$89.48.    

The Euro (EUR) rebounded from its previous session of declines as manufacturing data out of the U.S. confirmed it grew at it’s slowest pace in 10 months. Coupled with the Eurozone manufacturing accelerating for the month of November as PMI was above expectations of 52.6, coming in at 52.8 (Previous: 51.7). The EURUSD traded with a low of 1.4621 and a high of 1.4708 before closing the session at 1.4659 at the end of the New York session. PPI for the month of October is scheduled for release out of the Eurozone on Tuesday with forecasts at 0.4%/3.1% for the m/m and y/y.   

The Japanese Yen (JPY) was able to gain against a number of majors during the session as concerns continue to surround the market that losses in credit markets may worsen further. As a result the low interest bearing Japanese currency was reprieved of much of its role in funding more attractive yield currencies. The Japanese yen was able to rebound from two week lows against the dollar as Moody's Investors Service said it is preparing the biggest credit-rating cuts since sub-prime mortgages first shook the financial markets. Overall the USDJPY traded with a low of 110.14 and a high of 111.05 before closing the session at 110.43 at the end of New York.

The Sterling (GBP) edged higher versus the dollar on speculation that the UK economy had not slowed enough to warrant a rate cut by the BoE. In data news, the Sterling Pound was buoyed by reports which had shown manufacturing had quickened unexpectedly for the month of November (Actual: 54.4; Forecast: 52.5) adding further support to the likelihood that the BoE would look to hold rates for the remaining part of 2007. The GBPUSD traded with a low of 2.0526 and a high of 2.0679 before closing the session at 2.0666 at the end of New York. Retail Sales for the UK was released at 1.2% above the previous 1% during the early part of the Asian Session.

The Australian Dollar (AUD) rose from levels below the key 88 cent mark despite carry trades being out of favor with the investors. Nonetheless, the Aussie traded within tight ranges having a low of 0.8788 and a high of 0.8854 before closing the day at 0.8842 in the New York session. Retail sales for the month of October were released at 0.2% below the consensus of 0.6% (Previous: 0.8%)

Gold (XAU) bounced of key support levels once again failing to break 800 marks. XAU traded with a low of 777.80 and a high of 791.40.  
 
TECHNICAL COMMENTARY

Euro – 1.4665
Initial support at 1.4617 (Nov 19 low) followed by 1.4602 (61.8% retracement of the 1.4010 to 1.4968 advance). Initial resistance is now located at 1.4859 (Nov 28 high) followed by 1.4908 (Nov 27 high).
 
Yen – 110.50
Initial support is located at 109.48 (Nov 28 low) followed by 108.27 (Nov 26 low). Initial resistance is now at 111.33 (38.2% retracement of the 117.95 to 107.23 decline) followed by 111.14 (Nov 14 high)
 
Pound – 2.0640
Initial support at 2.0534 (Nov 30 low) followed by 2.0519 (Nov 23 low). Initial resistance is now at 2.0833 (Nov 28 high) followed by 2.0846 (Nov 14 high)
 
Australian Dollar – 0.8795
Initial support a 0.8776 (Nov 29 low) followed by 0.8720 (Nov 28 low). Initial resistance is now at 0.8921 (Nov 28 high) followed by 0.8939 (38.2% retracement of the 0.9400 to 0.8654 decline)
 
Gold – 792.10
Initial support at 778.90 (Nov 30 low) followed by 773.0 (Nov 20 low). Initial resistance is now at 808.05 (Nov 29 high) followed by 815.70 (November 27 high)