US Stocks Crash on Recession Confirmation

CURRENCY TRADING SUMMARY – 2nd December 2008 (00:30GMT)

· U.S. Dollar Trading (USD) benefited from a major reversal of market mood as US stocks slumped. The drop lower was precipitated by a very weak Manufacturing PMI coming in at 36.2 in November. New Orders component fell sharply to below 30, pointing to a weakening economic climate. The numbers indicate that the US is install for a deep recession. In U.S. share markets, the NASDAQ was down 137 points (-8.95%) and the Dow Jones was down 679 points (-7.7%) Crude Oil closed down $5.15 ending the New York session at $49.28 per barrel. Looking ahead, Treasury Secretary Paulson speaks tonight.

· The Euro (EUR) came under pressure as Oil and Stocks crashed lower on recession fears. Eurozone manufacturing fell to 35.6 in November but 1.2600 provided support during the day and losses were limited. Of Concern was the slump in October German Retail Sales to -1.6% vs. +0.5% expected. Overall the EUR/USD traded with a low of 1.2583 and a high of 1.2704 before closing the day at 1.2600. Looking ahead, Eurozone PPI is expected to fall -0.3% in October.

· The Japanese Yen (JPY) made a major move lower as weak US stocks caused risk aversion to spike higher and support at 95 gave way. All the crosses moved lower as the JPY enjoyed its status as the safe haven of choice. GBP/JPY fell over 8 big figures as the Pound took a battering. Overall the USDJPY traded with a low of 92.90 and a high of 95.74 before closing the day around 93.10 in the New York session.

· The Sterling (GBP) crashed lower as risk aversion and renewed scrutiny of the UK economy hurt sentiment. UK manufacturing PMI hit a new record low at 34.4 vs. 39.9 expected and indicates the UK recession will be deeper than previously thought. Overall the GDP/USD traded with a low of 1.4810 and a high of 1.5357 before closing the day at 1.4920 in the New York session.

· The Australian Dollar (AUD) held up well considering the large equities falls but was still significantly down ahead of the RBA meeting today. The market is wary of any RBA buying given recent intervention but continued weakness in commodities and stocks will eventually overwhelm such fears. Overall the AUD/USD traded with a low of 0.6335 and a high of 0.6522 before closing the US session at 0.6350. Looking ahead the RBA is expected to cut rates from 5.25% to 4.50%. UPDATE October Retail Sales beat expectations +0.7% vs -0.4% expected.

· Gold (XAU) broke lower tracking Oil and other commodity weakness. Overall trading with a low of USD$763 and high of USD$816 before ending the New York session at USD$776 an ounce.

TECHNICAL COMMENTARY

· Euro – 1.2615

Initial support at 1.2563 (Nov 28 low) followed by 1.2423 (Nov 21 low). Initial resistance is now located at 1.2717 (Dec 1 low) at followed by 1.2968 (Nov 27 high)

· Yen – 93.65

Initial support is located at 92.49 (Nov 28 low) followed by 91.9 (Oct 27 low). Initial resistance is now at 9 (Nov 25 high) followed by 97.55 (Nov 17 high).

· Pound – 1.4895

Initial support at 1.4807 (Dec 1 low) followed by 1.4703 (Nov 21 low). Initial resistance is now at 1.5398 (Dec 1 high) followed by 1.5412 (Nov 27 high).

· Australian Dollar – 0.6370

Initial support at 0.6333 (Nov 25 low) followed by the 0.6232 (Nov 24 low). Initial resistance is now at 0.6558 (Dec 1 high) followed by 0.6618 (Nov 25 high).

· Gold – 776

Initial support at 769 (Nov 24 low) followed by 743 (Nov 21 low). Initial resistance is now at 830.5 (Nov 25 high) followed by 856 (Oct 15 high).

Source: Easy-Forex

Euro weakens ahead of ECB this week

CURRENCY TRADING SUMMARY – 1st December 2008 (00:30GMT)

· U.S. Dollar Trading (USD) finished the weak on the front foot as Euro weakness helped the USD to gain against most majors. US stocks rallied for the 4^th time this week up over 12% on optimism that aggressive world wide rate cuts in the coming week will underpin stocks. In U.S. share markets, the NASDAQ was up 3.47 points (0.23%) and the Dow Jones was up 102 points (1.17%) Crude Oil closed down $0.01 ending the New York session at $54.39 per barrel. Looking ahead, October ISM Manufacturing is expected at 37 vs. 38.9 showing a further contraction.

· The Euro (EUR) retraced a lot of the weeks up move as European data slumped. Eurozone Inflation showed a sharp slowdown to 2.1% in November vs. 3.2 in October. The ECB target rate is 2% and the fall opens up possible aggressive rate cuts. Eurozone Unemployment jumped to 7.7% vs. 7.6% helping to undermine economic sentiment. Overall the EUR/USD traded with a low of 1.2646 and a high of 1.2957 before closing the day at 1.2705. Looking ahead, October German Retail Sales are seen up 0.5% vs. -2.3% previously.

· The Japanese Yen (JPY) tracked the equities during the day although struggled to capitalize on the improved risk sentiment as crosses weighed the USD/JPY down. EUR/JPY fell sharply on the above mentioned economic data and expectations of rate cuts in the UK and Australia undermined further gains in those pairs. Overall the USDJPY traded with a low of 95.15 and a high of 95.74 before closing the day around 95.68 in the New York session.

· The Sterling (GBP) tracked the Euro lower slipping below 1.53 briefly before recovering on the back on US stock gains to end the week well supported. UK data continued to be very weak with CBI retail trade survey falling to -46 to -27. Overall the GDP/USD traded with a low of 1.5259 and a high of 1.5448 before closing the day at 1.5415 in the New York session. Looking ahead,

· The Australian Dollar (AUD) continued to be supported as US stocks made record gains during the week trading in a range between 65 and 66 as USD strength capped gains. The market is focusing on the RBA meeting on Tuesday and speculation that the central bank may cut aggressively to stimulate the faltering economy. Overall the AUD/USD traded with a low of 0.6480 and a high of 0.6601 before closing the US session at 0.6554.

· Gold (XAU) continued to trade in a tight range as USD strength countered demand for the precious metal. Overall trading with a low of USD$809 and high of USD$821 before ending the New York session at USD$818 an ounce.

TECHNICAL COMMENTARY

· Euro – 1.2695

Initial support at 1.2645 (Nov 28 low) followed by 1.2568 (Nov 24 low). Initial resistance is now located at 1.2968 (Nov 27 low) at followed by 1.3081 (Nov 25 high)

· Yen – 95.45

Initial support is located at 94.61 (Nov 26 low) followed by 93.56 (Nov 20 low). Initial resistance is now at 97.43 (Nov 25 high) followed by 97.55 (Nov 17 high).

· Pound – 1.5375

Initial support at 1.5258 (Nov 28 low) followed by 1.5176 (Nov 26 low). Initial resistance is now at 1.5449 (Nov 28 level) followed by 1.5534 (Nov 25 high).

· Australian Dollar – 0.6530

Initial support at 0.6430 (Nov 26 low) followed by the 0.6333 (Nov 25 low). Initial resistance is now at 0.6618 (Nov 25 high) followed by 0.6696 (Nov 14 high).

· Gold – 818

Initial support at 786 (Nov 24 low) followed by 743 (Nov 21 low). Initial resistance is now at 830.5 (Nov 25 high) followed by 856 (Oct 15 high).

Source: Easy-Forex

4^th day of US stock gains ahead of Thanksgiving Holiday

CURRENCY TRADING SUMMARY – 27th November 2008 (00:30GMT)

· U.S. Dollar Trading (USD) was able to maintain strength even as Oil and Stocks rallied. The Economic data released was extremely weak, with Personal spending falling -1% and October Durable goods orders falling -6.2%. Also released weekly jobless claims remaining at high levels of 529K. New Homes sales were worse than expected at 433K vs. 441 forecast. In U.S. share markets, the NASDAQ was up 67 points (4.6%) and the Dow Jones was up 247 points 2.91%). Crude Oil closed up $3.67 ending the New York session at $54.44 per barrel. Looking ahead, Thanksgiving Holiday in US.

· The Euro (EUR) slipped off the 1.30 handle in Asia and remained weak for the rest of the day as the market began to focus on coming rate cuts from the ECB. Rallies in Oil and the Dow help to lift the Euro of lows into the US close. Overall the EUR/USD traded with a low of 1.2822 and a high of 1.3032 before closing the day at 1.2895. Looking ahead, German Unemployment change is expected at -4K vs. -26K previously and an unchanged Unemployment rate at 7.5% in November. Eurozone Sentiment Indicators are also released and the ECB president Trichet speaks.

· The Japanese Yen (JPY) found strength as Asian stocks were sluggish and recession concerns turned USD/JPY and crosses lower. Helping the market was the China rate cut of 108bps but this was unable to be sustained even as US stocks rallied. Overall the USDJPY traded with a low of 94.62 and a high of 95.94 before closing the day around 95.50 in the New York session. Looking ahead, BOJ meeting minutes are released and Governor Shirakawa will be speaking.

· The Sterling (GBP) was extremely volatile as low liquidity made it easy to move wildly. After starting the day near 1.55 the GBP was offer most of the day but found support as Oil and Stocks rallied. Overall the GDP/USD traded with a low of 1.5179 and a high of 1.5444 before closing the day at 1.5350 in the New York session.

· The Australian Dollar (AUD) gained support from multiple areas as commodities rallied and stocks were buoyant in the US. After losing the .6500 level in Asia the key level proved a magnet for the rest of the day although .6550 has proven too big a hurdle to jump in recent sessions. Overall the AUD/USD traded with a low of 0.6431 and a high of 0.6551 before closing the US session at 0.6510.

· Gold (XAU) traders took profit on the precious metal as German Inflation fell sharply, halting a 5 day rally. Overall trading with a low of USD$809 and high of USD$823 before ending the New York session at USD$812 an ounce.

TECHNICAL COMMENTARY

· Euro – 1.3020

Initial support at 1.2804 (Nov 25 low) followed by 1.2568 (Nov 24 low). Initial resistance is now located at 1.3081 (Nov 25 low) at followed by 1.3116 (Nov 5 high)

· Yen – 95.00

Initial support is located at 94.94 (Nov 24 low) followed by 93.62 (Nov 20 low). Initial resistance is now at 97.43 (Nov 25 high) followed by 97.55 (Nov 17 high).

· Pound – 1.5400

Initial support at 1.4984 (Nov 25 low) followed by 1.4841 (Nov 24 low). Initial resistance is now at 1.5500 (Key level) followed by 1.5535 (Nov 25 high).

· Australian Dollar – 0.6465

Initial support at 0.6298 (76.4% retrace 0.7015 to 0.6076) followed by the 0.6232 (Nov 24 low). Initial resistance is now at 0.6618 (Nov 25 high) followed by 0.6696 (Nov 14 high).

· Gold – 813

Initial support at 786 (Nov 24 low) followed by 743 (Nov 21 low). Initial resistance is now at 856 (Oct 15 high) followed by 871 (Oct 13).

Source: Easy-Forex