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AUD drifts lower after USD gains on mixed economic data

The AUD eased recent gains on Friday, tumbling below US$0.7600 level in late Asian session and sank as low as US$0.7568 during the early London session. The AUD fell as the USD jumped against the EUR, building on overnight gains made after the ECB reiterated that Asian currencies should take some of the pressure off the single currency to climb against USD.

On the US economic data front, December PPI declined 0.7 per cent from 0.5 per cent rise in November against the market expectation of 0.1 per cent drop. Ex-food and energy PPI is up 0.1 per cent against the market expectation of 0.2 per cent rise. After the release of PPI, the AUD quickly crept above US$0.7600 level. Later, US December IP rose at 0.8 per cent from 0.2 per cent in November, beating market expectation of 0.5 per cent.

December capacity utilisation was up to 79.2 per cent versus the forecast of 78.9 per cent. The AUD lost ground again to drop as low as US$0.7570 before it consolidated within the US$0.7580-0.7600 range during US afternoon. Resistance is now eyed at US$0.7620 and US$0.7670, while support starts at US$0.7560 and US$0.7500.

The EUR slid more than 1 US cent after St. Louis Federal Reserve president William Poole said policy makers may drop their plan to lift interest rates at a 'measured pace' at some point. Some traders and analysts said the remarks may mean the central bank will accelerate the pace of rate increases, widening a gap with Europe. The USD also gained after ECB council member Axel Weber said higher US rate and faster US growth may support the currency. The EUR declined to an intraday low of US$1.3058 during early London session but recovered near the US$1.3100 level during most of the US afternoon. Resistance is now found at US$1.3130 and US$1.3170, while support is found at US$1.3060 and US$1.3040.

GBP followed the movement of the EUR overnight. It fell through the US$1.8700 level, dropping to intraday low of US$1.8640 during early London morning. But the pair gradually recovered towards US$1.8700 during the late US afternoon. Support level is seen at US$1.8640 and US$1.8600. Resistance begins at US$1.8730 and US$1.8770.

Japan's November machinery orders surged to 19.9 per cent month-on-month, far exceeding consensus forecasts a 3.3 per cent monthly rise. The much stronger than expected machinery orders data prompted another bout of Yen buying overnight. Also released were the November industrial output, which was upwardly revised to 1.7 per cent month-on-month from 1.5 per cent mom and capacity utilisation, which increased by 1.3 per cent month-on-month. The December domestic CPI was flat month-on-month and up 1.9 per cent year-on-year. During US afternoon session, USD/JPY broke through 102.00 level and dipped to an overnight low of 101.80 before it bounced back towards 102.00. Support is now found at 101.80 and 101.50 while resistance is found at 102.30 and 102.70.

Gold back-pedaled on Friday in holiday-shortened trade, hit by rising equities and the USD as traders focused on the prospect of accelerating US interest rate rises. It closed at US$423.00 from Thursday's closing level at US$424.50. Silver was dragged lower to end at US$6.59.

Morning Mos. Any thoughts for an early few points

mng jeff to be honest all my screens are down which helps....could be a bit volitile with the yanks off,as london prob push around a few stops,but seems pretty range bound
cable support 86.00 86.40 86.60.... res 87.30 40 87.70 88.00

Mos, thks for mails. Decided to follow mataf and short USD/JPY 102.11. Better get going for the day job, laters

Short cable at 8747

ditto @ 44

Morning, thanks for the mail Mos.

np seymore wont overegg the pudding just a few bits and bob`s
out @24

You guys have got rocks in your head if you think that you're going to successfully trade cable in Asian time. That's just not the way that it works.

TODAY'S HEDGE FUND STRATEGY
Monday, January 17, 2005 6:14 GMT
Daily Report
By Teamforex
http://www.teamforex.com


STRATEGY
Such a lot has happened since my last update in December. We have seen the dollar falling to new lows against the majors, followed by a sudden and dramatic reversal in very quick time indeed. These volatile swings will no doubt have hurt those traders who frantically boarded the North-bound Euro, Sterling and Aussie trains very late in the game.

However, the clearing out of weak and late hands was important, and (for now) the trend to dollar weakness remains intact. This month, the euro should hold above 1.3000, possibly 1.2850, and cable should try to base above 1.8400 1.8600.

There will no doubt be a bit of thrashing around at these levels and the strong, linear trend of the last few months of 2004 will probably not re-occur for a few months. Expect more of a ranging pattern, with good opportunities to trade from the outsides of the ranges aiming inwards.

The message is simple look to buy majors on good dips. On Monday I will be eyeing euro (closer to 1.3000 though), cable and eur/jpy for long positions, but will keep stops and position sizes small, being prepared to re-buy lower down if the first trades fail.

seems cable range looking like 00/50 early doors..

hilary thanks for your input,no one is suggesting we trade cable in asian time, merely adding content to the thread..afterall fx is a 24 hr market,and having traded fx for over 15 years ive got a fairly good feel for what is going on,i for one and its only personnel choice start my day @ 6am and like trading the asain europe hand over.......

this thread is all about opnions ,and seeing as you feel you are such a guru
why dont you share your thoughts with us..

mos

Signed up to fxstreet.com at the weekend (free), ticked the boxes for lots of news reports from different institutions. This morning I have 30 so far in my mail box so I will have to sort the good from the bad. Good to see that most are supporting my USD/JPY short that is about +28 at the mo.

Had 2 open triggers set overnight - one to sell at 739 the other to buy at 666. I'm with the 739 sell which triggered around 07:00 on that spike. I've now removed my buy trigger but may set a limit around 600 - which would be a nice start to the week.

MG have you contacted Scrip yet re golf? Have closed my cable short and waiting to see how strong support is at 8710.

Bobcolby. I see you closed your cable short seconds before it dipped down... glad to see I'm not the only one who does that!

Maggot. I have a knack for this sort of thing. just gone long at 93, but ready to reverse trade if drop continues.

mostrader,

If you'd bothered to read the posts, you'd have realised that trading during Asian hours is exactly what a couple of posters were proposing. With your 15 years experience, I'm sure you'd have learned that the vast majority of the Cable money changes hands between 7am and 2pm London time and the market seldom moves anywhere during Asian hours.

Bob
Not yet - one of my "Things To Do" ;)

hils , iam not getting into a slanging match yep we are all aware of that,but if you scroll back we are talking about the asian/europe handover,i.e 6am cet to london open....stick up a chart and see what movements we have. most days but not all big ben chart movements.....
but once again thks for your input.....
i would value it as would many other posters on this thread,which if we are both honest tends to die most days by 9am,but now a few more people are dipping there toes in and would probably value a constructive statement/comment from you thats all.