Markets Searching For Direction

Daily Forex Fundamentals | Written by Easy Forex | Jan 19 09 01:21 GMT |

U.S. Dollar Trading (USD) had a volatile trading session initially weakening throughout the day as markets gained confidence and equities markets rallied in Europe and Asia. Weak US data and concerns about Citibank and Bank of American sent US stocks lower at the start of the session which helped the Dollar to strengthen but a late rally allowed this safe haven demand to subside. December CPI fell -0.7% broadly as expected while the core was flat. Of concern was Industrial Production which fell 2% in December while Capacity Utilization dropped to 73.6%. In U.S. share markets, the NASDAQ was up 17 points (1.16%) and the Dow Jones was up 68 points (0.84%). Crude Oil closed up $1.11 ending the New York session at $36.51 per barrel. Looking ahead, Public Holiday in the US. The Euro (EUR) found strength on the downbeat US data gaining across the board. EUR/JPY surged higher on decreased risk aversion. Helping support the Euro was reported comments from Trichet that he had no plans for a zero interest rate policy. Overall the EUR/USD traded with a low of 1.3110 and a high of 1.3345 before closing the day at 1.3180. The Japanese Yen (JPY) was sold as stock markets rallied across the world. Many market participants expect an Obama rally this week and this prompted short covering into the weekend. Overall the USDJPY traded with a low of 89.76 and a high of 90.91 before closing the day around 90.58 in the New York session. Looking ahead, November Industrial Output expected to be confirmed at -8.1%. The Sterling (GBP) rallied into the weekend but reaction to a new Banking bailout plan was mixed and EUR/GBP rallied into the close. The cable rally ran into resistance at the key 1.5000 level and selling was intensified as equities fell in early US trade. Overall the GDP/USD traded with a low of 1.4653 and a high of 1.4980 before closing the day at 1.4702 in the New York session. The Australian Dollar (AUD) was volatile testing both the topside and downside as the market searched for new direction. AUD/JPY buying and a large rally in Gold helped to support the pair into the weekend although it ended well off its highs. Overall the AUD/USD traded with a low of 0.6648 and a high of 0.6796 before closing the US session at 0.6684. Gold (XAU) rallied hard on poor US data and strong demand for an alternative investment. Overall trading with a low of USD$816 and high of USD$840 before ending the New York session at USD$839 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products