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Tuesday, December 1, 2009

USD/JPY tests support at 86.55

Greenback has lost most of the gains against the Yen. USD/JPY is testing levels below a support at 86.55, if it falls below, the Yen could gain momentum. The pair declined more a hundred pips from intra-day highs to current levels at 86.51/55, that lie 0.19% above today’s opening price. Immediate support lies at 86.40 and below at 86.15 and 85.85. To the upside resistance levels lie at 87.05/87.10 and above at 87.50 session high, and 88.00 (Oct 7 low).

Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, comments on a wider view: “Through to year-end, amid generalised US dollar weakness, the Yen is expected to outperform other currencies so that Yen crosses drop towards January’s lows. If we are correct then USD/JPY will see a series of lower highs between now and March 2010, and lower lows, taking it down to 83.00 and probably the all-time low of 79.75 some time in Q1.”

EUR/USD holds near intra-day highs

Stocks continue rising in the U.S. weakening the Dollar. Greenback remains near the lows of the day against the Euro. EUR/USD trades above 1.5100 near daily high that lie at 1.5120. Gold prices trade near record highs at 1,198. If it rallies above 1,200 the Dollar could fall further across the board and the Euro could rise to test year highs.

Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, comments on a wider view: ”The Euro held up better than expected last month, the US dollar under constant pressure, and has just managed weekly and monthly closes above the psychological 1.5000 level. This might add some bullish momentum for a short-squeeze into year-end, so allow for a rally to an area of poorly defined resistance between 1.5145 and 1.5465.”

GBP/USD: Cable rises further

The Pound is extending it gains across the board. GBP/USD recently rose to 1.6645, fresh intra-day high and currently trades at 1.6637/42, 1.25% above today’s opening price. The pair is posting at the moment the biggest daily gain in more than a month. To the upside, resistance lies at 1.6650 (Nov 23 high) and above at 1.6695/1.6705 and 1.6730 (Nov 26 high).

Andrew Wilkinson, affirms: “One of the biggest gains against the dollar came today from the British pound following a further increase in home prices according to data from the Nationwide and Halifax building societies. Both companies have different composition methods for their data, but the Nationwide showed a 0.5% monthly and 2.7% year-over-year increase in prices for homes. The pound added despite data from the CIPS indicating a slower pace of manufacturing expansion during November. “

USD/CHF finds support at 0.9970

The Swiss Franc is consolidating important gains against the Dollar. USD/CHF fell below parity to 0.9966 reaching the lowest price of the day. Greenback found support at 0.9970 and currently trades at 0.9991/96, 0.60% below today’s opening price. Greenback failed to confirm last week gains and is again under pressure. EUR/CHF failed to break above 1.5100 and pulled back finding support at 1.5070.

Valeria Bednarik, affirms: “Despite all SNB (Swiss National Bank) efforts to avoid Swiss Franc appreciation, pair is right now under parity, and tending lower. The fact is that SNB is watching more closely the relationship with Euro, than with Dollar, and as long as EUR/CHF remains above 1.5050, another intervention seems unlikely.” She concludes: “bigger time frames are strongly bearish, pointing for a retest of the yearly low, around the 0.9920 area.”

U.S. markets finished with gains; Dollar consolidates losses and Gold holds near record highs

Wall Street finished in positive helped by better-than-expected economic data in the housing and construction sector that offset a positive but weak reading on manufacturing. The Dow Jones rose 1.23% and finished at the highest level in 13 months. Greenback is consolidating losses despite moving away from the lows. Gold holds near 1,200.

The analysis team affirms: “The yellow precious metal hit a record today above $1,200 an ounce as the green Benjamin lost momentum considerably throughout the currencies market since trader's appetite of risk returned and corroded accordingly the refuge appeal of the Federal currency due to mounting hopes caused by today's overall cheerful news concerning the housing sector, knowing of course that these two have an inverse strong unbreakable relation.”
Crude oil also rose but failed to break above $79 a barrel and currently trades at $77,80. Long term treasuries tumbled sending yields to the highest level in a week.

Dollar moved away from the lows of the day but is still facing important losses. EUR/USD is back below 1.5100, the pair peaked earlier at 1.5118, a few pips below year highs. USD/CHF trades near the parity level after finding support at 0.9970. GBP/USD holds above 1.6600 and currently trades at 1.6610/15, 1.08% above today’s opening price. The pair reached the highest price of the day at 1.6647.

The Yen is also lower today even against the Dollar. USD/JPY lost most of the gains during the European and the American session but still trades above the opening price. The pair found support at 86.55 and at the moment trades at 86.70/75, 0.39% above today’s opening price.