DirectFX : Economic Snapshot

Forex Market Update

The US Dollar is trading mostly lower against the major currencies this morning, despite the concerns surrounding the US 'fiscal cliff'. The US lawmakers over the weekend indicated that it remained possible to reach a deal to avert the fiscal cliff, but they noted that time was running short.

However, data released in the US on Friday surprise on the upside, with consumer spending in the US hitting three-year high and durable goods orders posting a rise for November.

In Europe, Italian Prime Minister, Mario Monti on Sunday said that he wouldn't actively campaign ahead of early elections set for February but said he might be willing to serve as Prime Minister in a coalition government that's committed to his agenda.

In Asia, investors witnessed fresh selling in the Japanese Yen, after the incoming premier Shinzo Abe heaped fresh pressure on the Bank of Japan (BoJ) to target annual inflation of 2%. He further stated that he would attempt to revise a Japanese law guaranteeing the central bank's independence if that inflation target is not met.

Data released earlier today by Hometrack indicated that house prices in the UK, continued to decline for December. The Nationwide house prices and BBA mortgage approvals data slated for release later this week are likely to shed more light on the domestic housing sector.

Trading volume is expected to remain low ahead of the Christmas and Boxing Day public holiday.

The greenback traded higher in the New York session on Friday, against the key currencies.

EUR USD

This morning at 10:40 GMT, the EUR is trading at 1.3216 against the USD, 0.27% higher from the New York close. However, the gains were limited amid ongoing concerns over the US budget talks. During the session, the pair traded at a high of 1.3225 and a low of 1.3171. On Friday, the EUR traded 0.16% lower against the USD in the New York session, and closed at 1.3180, slipping below the crucial 1.32 mark, as traders continued to focus on talks in Washington to avert the fiscal cliff of spending cuts and tax hikes ahead of the year-end deadline.

The pair is expected to find its first support at 1.3174 and first resistance at 1.3241.

GBP USD

At 10:40 GMT, the GBP is trading at 1.6193 against the USD, 0.16% higher from the New York close. In economic news, results of survey by Hometrack revealed that on a monthly basis, house prices in the UK fell 0.1% in December, marking the sixth consecutive monthly decline and compared to a similar decline recorded in the previous month. Additionally, the property market researcher cautioned that it expected prices to drop further in 2013. During the session, the pair traded at a high of 1.6204 and a low of 1.6142. On Friday, the British Pound traded 0.39% lower versus the Dollar in the New York session, and closed at 1.6167.

The pair is expected to find its first support at 1.6138 and first resistance at 1.6252.

USD JPY

The USD is trading at 84.42 against the JPY at 10:40 GMT this morning, 0.32% higher from the New York close. The Yen slipped against the US dollar, after incoming premier Shinzo Abe renewed pressure on the Bank of Japan to adopt a 2.0% inflation target. Ahead in the week, investors would focus on the Bank of Japan minutes of the latest monetary policy meeting for hints on whether the 2% inflation target dominated policymakers mind. Additionally, the consumer price inflation, jobless rate, retail sales and industrial production would also be keenly watched by investors. During the session, the pair traded at a high of 84.51 and a low of 84.32. In the New York session on Friday, the USD traded 0.05% higher against the JPY, and closed at 84.15.

The pair is expected to find its first support at 84.06 and first resistance at 84.65.

USD CHF

This morning at 10:40 GMT, the USD is trading at 0.9138 against the Swiss Franc, 0.32% lower from the New York close. During the session, the pair traded at a high of 0.9172 and a low of 0.9132. In the New York session on Friday, the USD traded 0.24% higher against the CHF, and closed at 0.9167.

The pair is expected to find its first support at 0.9120 and first resistance at 0.9168.

USD CAD

At 10:40 GMT, the USD is trading at 0.9929 against the CAD, marginally lower from the New York close. During the session, the pair traded at a high of 0.9947 and a low of 0.9918. On Friday, the USD traded 0.21% higher against the CAD in the New York session, and closed at 0.9932.

The pair is expected to find its first support at 0.9900 and first resistance at 0.9957.

AUD USD

The AUD is trading at 1.0401 against the USD, at 10:40 GMT this morning, 0.13% lower from the New York close. During the session, the pair traded at a high of 1.0421 and a low of 1.0386. Trading activity is expected to remain subdued, with year-end positioning driving flows and as holidays in many countries limit activity. AUD traded 0.17% lower against the USD in the New York session on Friday, and closed at 1.0415.

The pair is expected to find its first support at 1.0377 and first resistance at 1.0435.

Gold

At 10:40 GMT, Gold is trading at $1662.05 per ounce, 0.29% higher from the New York close, as the greenback weakened. This morning, Gold traded at a high of $1665.65 and a low of $1652.20 per ounce. In the New York session on Friday, the yellow metal traded 0.54% higher, and closed at $1657.25.

Gold has its first support at $1649.81 and first resistance at $1669.97.

Silver

Silver is trading at $30.23 per ounce, 0.76% higher from the New York close, at 10:40 GMT this morning, as investors continue to monitor developments in negotiations among the US lawmakers to avert the fiscal cliff. This morning, Silver traded at a high of $30.35 and a low of $29.96 per ounce. Silver traded 0.40% higher against the USD in the New York session on Friday, and closed at $30.01.

Silver has its first support at $29.83 and first resistance at $30.49.

Crude Oil

At 10:40 GMT, Oil is trading at $88.62 per barrel, 0.40% lower from the New York close, in quiet pre-holiday trade, as risk appetite for commodities weakened amid reduced hopes for a US budget deal before the year-end deadline. This morning, Oil traded at a high of $88.66 and a low of $88.44. On Friday, Oil traded 0.09% lower in the New York session, and closed at $88.94.

It has its first support at $87.91 and first resistance at $89.37.

Economic Snapshot

UK's house prices declined in December

In the UK, Hometrack reported that house prices fell 0.1% (MoM) in December, the sixth consecutive monthly decline and compared to a similar drop recorded in the previous month.

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