US Dollar rises and falls throughout the week on the back of soft data

Last week’s currency trading review

The Dollar was mixed against the majors throughout the week as data releases continue coming in on the soft side for the US. US PPI and retail sales were both less thane expected as well as CPI, industrial pruction, and net foreign security purchases. The New York Fed Survey did come in better than forecasted and the FOMC minutes releases in the middle of the week showed that the Federal Reserve members were still cautious about rising core inflation. The US ended the week on a negative note, after housing starts fell by more than 14%. Euro was well supported throughout the week with GDP, ZEW current conditions, HICP, industrial production all showing positive numbers. The Euro closed the week at 1.2813 having started the week 1.2809. The Japanese Yen benefited early in the week from a much better than expected GDP figure, however the BoJ monthly report released after rates were kept on hold at 0.25% (as expected) was considered neutral in its tone towards the Yen according to the market. Governor Fukui stated that he did not know when the next rate move would be. USD/JPY closed the week at 118.09 having started the week at 118.11. The sterling closed last week at 1.8965 having started the week at 1.9011 as inflation data such as PPI and CPI came in stronger than market expectations. However, the BoE inflation report was not as hawkish as expected, and decreased slightly the probability of another rate hike from the BoE anytime soon. The Aussie closed the week at 0.7700 having started the week at 0.7627 as

The Aussie closed the week at 0.7671 having started the week at 0.7716 as rising gold prices assisted the commodity bloc currency.

The forex trading week preview

In the States; US consumer sentiment will be looked at as well as initial jobless claims (Wednesday), with both expected to outperform ahead of the US thanksgiving holiday (Thursday) it what is a very quiet week for data releases and official speeches from the US.

We will provide our previews of these data releases in the daily summary.

In the Eurozone; ECB President Trichet will meet with Asia-Pacific central bankers and will release a statement (Tuesday) after G10 meeting over the weekend. Industrial orders (Wednesday) will be looked at also with interest as the coming week is also a light one for data releases from the Eurozone.

We will provide our previews and reviews of these data releases in the daily summary.

Technical commentary

Currency Sup 2 Sup 1 Spot Res 1 Res 2 
EUR/USD 1.2746 1.2761 1.2815 1.2901 1.2941 
USD/JPY 116.57 117.12 118.05 118.61 119.67 
GBP/USD 1.8770 1.8835 1.8970 1.8987 1.9052 
AUD/USD 0.7614 0.7642 0.7700 0.7710 0.7769 
XAU/USD 613.40 614.80 623.00 628.40 636.90

Euro 1.2815

Initial support at 1.2761 (Nov 17 low) followed by 1.2746 (Nov 8 low). Initial resistance is now located at 1.2901 (Nov 10 high) followed by 1.2941 (Aug 21 reaction high).

Yen 118.05

Initial support is located at 117.12 (Nov 13 low) followed by 116.57 (Nov 1 low). Initial resistance is now at 118.61 (Nov 9 corrective high) followed by 119.67 (Oct 24 high).

Pound – 1.8970

Initial support at 1.8835 (Nov 17 low) followed by 1.877 (61.8% retracement of the 1.8516-1.9182 rally). Initial resistance is now at 1.8987 (Nov 20 high) followed by 1.9052 (Nov 14 high).

Australian Dollar – 0.7700

Initial support at 0.7642 (Nov 16 low) followed by 0.7614 (Nov 13 corrective low). Initial resistance is now at 0.771 (Nov 9 high & 61.8% ret 0.7769 to 0.7614) followed by 0.7769 (Nov 1 high).

Gold – 623

Initial support at 614.8 (Nov 17 low) followed by 613.4 (Nov 8 low). Initial resistance is now at 628.4 (Nov 16 high) followed by 636.9 (Nov 10 high).