U.S. Dollar Trading (USD) was choppy throughout the day, as a follow through of risk aversion was prominent in the early part of the Asian session, relieving the USD of much of its recent pressure. In the later part of the day Federal Chairman Ben Bernanke mentioned in his address to a joint committee that the outlook on the economy is likely to “slow noticeably”, increasing speculation of a third rate cut this year. In U.S. share markets the NASDAQ was down – 52.76 (-1.92%) whilst the Dow Jones was also down -33.73 (-0.25%). Crude oil fell on Thursday initially post Ben Bernanke comments before regaining to trade higher at US$95.55 a barrel. Looking ahead, much of the focus will be placed on Trade Balance on Friday with economists expecting the figure to come in at -58.5 billion widening from -57.59 in the month of September.
The Euro (EUR) fell short of its previous session high despite very dovish comments from Fed chairman Bernanke. To no surprise, the ECB decided upon keeping rates hold. Although some support was seen with post comments made by Trichet which indicated that the Central Bank remained concerned with inflationary pressures in the Euro Zone. Overall the EURUSD traded with a low of 1.4615 and a high of 1.4704 before closing the session at 1.4665 in the New York session.
The Japanese Yen (JPY) traded near a three month low as risk aversion took its course throughout the Asian session of trading. Reports circulated that speculators had bought almost 20 percent more than the daily average of dollar-yen options, to hedge against a fall in the U.S. currency Overall the USDJPY traded with a low of 112.00 and a high of 113.37 before closing the session at 112.65 in New York.
The Sterling (GBP) traded at a fresh 26 year high on Thursday despite the BoE keeping rates on hold maintaining it at a six year high with policy makers resisting calls for a cut on concern that rising oil and food prices will fan inflation. Overall the GBPUSD traded with a low of 2.0974 and a high of 2.1116 before closing the day 2.1085 in the New York session.
The Australian Dollar (AUD) succumbed to selling pressure as investors looked to unwind risky carry trades, weighing on the high yielding currency. The Aussie dollar did well to pair its losses in the later part of the day on the back of bearish comments made by Fed’s Bernanke. Overall the AUDUSD traded with a low of 0.9192 and a high of 0.9320 before closing the day at 0.9280 in the New York session.
Gold (XAU) fell considerably in the early part of the day on profit taking following risk aversion market sentiment, before extended it overall rally. XAU traded with a low of 823.60 and a high of 845.50.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.4467 | 1.4554 | 1.4685 | 1.4731 | 1.4782 |
| USD/JPY | 111.61 | 112.07 | 118.70 | 114.96 | 115.93 |
| GBP/USD | 2.0861 | 2.0974 | 2.1080 | 2.1088 | 2.1200 |
| AUD/USD | 0.9109 | 0.9190 | 0.9270 | 0.9331 | 0.9400 |
| XAU/USD | 806.40 | 822.65 | 835.40 | 845.80 | 846.15 |
Euro 1.4685
Initial support at 1.4554 (Nov 7 low) followed by 1.4467 (Nov 6 low). Initial resistance is now located at 1.4731 (Nov 7 high) followed by 1.4782 (Nov open + (Oct range * 0.618)
Yen 118.70
Initial support is located at 112.07 (Nov 8 low) followed by 111.61 (Aug 17 reaction low). Initial resistance is now at 114.96 (Nov 5 high) followed by 115.93 (Nov 1 high).
Pound – 2.1080
Initial support at 2.0974 (Nov 8 low) followed by 2.0861 (Nov 7 low). Initial resistance is now at 2.1088 (Nov 7 trend high) followed by 2.1200 (Channel line)
Australian Dollar – 0.9270
Initial support a 0.9190 (Nov 8 low) followed by 0.9109 (Nov 1 reaction low). Initial resistance is now at 0.9331 (Nov 8 high) followed by 0.9400 (Nov 7 trend high).
Gold – 835.40
Initial support at 822.50 (Nov 7 low) followed by 806.40 (Nov 6 low). Initial resistance is now at 845.80 (Nov 7 trend high) followed by 846.15 (November open + (October range * 0.618)