Australian FOREX Daily Outlook 12/01/2009

US Unemployment hits 15 year high in December

CURRENCY TRADING SUMMARY – 12th January 2009 (00:30GMT)

·                U.S. Dollar Trading (USD) gained into the weekend as Unemployment figures came in poor but not as bad as some had feared. The USD had been under pressure since Wednesday on the back of terrible ADP employment numbers so the market was relieved at -525K. The December Unemployment rate jumped to 7.2% vs. 7.0% expected. In U.S. share markets, the NASDAQ was down 45 points (-2.81%) and the Dow Jones was down 143 points (-1.64%). Crude Oil closed down $0.62 ending the New York session at $41.08 per barrel.

·                The Euro (EUR) dropped after the US jobs data was released falling heavily from the 1.3700 level to slide under 1.3500. European Retail Sales beat forecasts at 0.6% vs. 0.1% expected in November. German Industrial Production continued to deteriorate to -3.1% vs. -2.0% expected in November. Overall the EUR/USD traded with a low of 1.3416 and a high of 1.3757 before closing the day at 1.3431.

·                The Japanese Yen (JPY) strengthened considerably as economic fundamentals and investor sentiment soured. In focus is the key 90 level on the USD/JPY which will provide short term direction. EUR/JPY was especially heavy, falling multiple big figures. Overall the USDJPY traded with a low of 90.15 and a high of 91.65 before closing the day around 90.47 in the New York session.  

  ·              The Sterling (GBP) was better supported than the EURO but did come under pressure falling from 1.53 to 1.51 as the USD was bought up after the employment data. GBP/JPY selling saw that cross drop from 140 to 136 yen. December PPI input was down -2% and Output PPI was flat at 0.0%. Overall the GDP/USD traded with a low of 1.5118 and a high of 1.5348 before closing the day at 1.5139 in the New York session.

·                The Australian Dollar (AUD) traded between 0.71 and 70 although was better offered than bought against the greenback. Commodities were generally weaker as recession fears hurt demand. Overall the AUD/USD traded with a low of 0.7013 and a high of 0.7125 before closing the US session at 0.7044.

·              Gold (XAU) was mixed trading lower as the USD strengthened before equities weakness allowed the precious metal to rally. Overall trading with a low of USD$845 and high of USD$868 before ending the New York session at USD$854 an ounce.

·                Euro – 1.3470

Initial support at 1.3312 (Jan 6 low) followed by 1.3241 (0.618 of 1.2337-1.4719). Initial resistance is now located at 1.3752 (Jan 9 high) at followed by 1.3799 (Jan 8 high)

·                Yen – 90.05

Initial support is located at 90.01 (61.8% retrace 87.14 to 94.64) followed by 89.08 (Dec 22 low). Initial resistance is now at 91.67 (Jan 9 high) followed by 92.92 (Jan 8 high).

·                Pound – 1.5125

Initial support at 1.5117 (Jan 9 low) followed by 1.4984 (Jan 8 low). Initial resistance is now at 1.5374 (Jan 8 high) followed by 1.5616 (Dec 18 high).

·                Australian Dollar – 0.6990

Initial support at 0.6957 (Jan 8 low) followed by the 0.6919 (Jan 2 low). Initial resistance is now at 0.7142 (Jan 8 high) followed by 0.7269 (Jan7 high).

·                Gold – 855

Initial support at 836 (Jan 8 low) followed by 830 (Dec 19 low). Initial resistance is now at 870 (Jan 6 high) followed by 884 (Jan 5 high).

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