Closed in NY at $1.6320, with initial sales into early Asia taking rate back to $1.6316

<p>  GBP/USD Range: 1.6318 – 1.6408 Support: 1.6300 Resistance: 1.6420 Closed in NY at $1.6320, with initial sales into early Asia taking rate back to […]</p>


Range: 1.6318 – 1.6408
Support: 1.6300
Resistance: 1.6420
Closed in NY at $1.6320, with initial sales into early Asia taking rate back to $1.6316. Strong cross yen demand post Tokyo fix provided the reversal momentum, cable trading off lows and trading through resistance at $1.6450, which triggered stops above here and above $1.6364 taking the rate on to a high of $1.6394. However, rally lagged euro-dollar’s stronger move and allowed euro-sterling to push up from early lows of stg0.8760 to stg0.8788, with the cross pressing on highs into early Europe. Cable was seen meeting decent resistance on approach to recent highs at $1.6403, though pullbacks so far have remained supported above $1.6370. Rate currently trades around $1.6380. Offers seen placed between $1.6400/10, a break to open a move toward $1.6430 ahead of stronger interest between $1.6450/60. UK input/output prices due for release at 0830GMT while US calendar looking light.
Range: 1.4292 – 1.4405
Support: 1.4200
Resistance: 1.4430
Concern over a possible US government shutdown, due to ongoing failure to agree the Budget, was seen weighing heavily on the dollar and added to euro-dollar’s rapid rise, the break of $1.4350 triggering stops to take rate on to $1.4375 where it initially stalled. The dip under $1.4350 was greeted by Asian sovereign demand with the second attempt higher taking out a suggested barrier at $1.4375 and taking rate on to an eventual high of $1.4405 (note a German name was a heavy buyer of overnight strikes at $1.4400 Thursday). Rate backed off highs, as spec traders pared back longs ahead of the European open, but underlying buoyant tone remains in place into early Europe with traders noting Asian central bank interventions to buy dollars overnight which should lead to euro-dollar demand for reserve balancing into Europe.
Range: 1457 – 1466.90
Support: 1447
Resistance: 1470


Spot gold opened yesterday at $1459.70 and closed lower on the day at $1458.20 despite recording a new all time high of $1465.25 after comments from ECB Trichet, kept the euro-dollar buoyed and the dollar on the back foot. Further gains were seen in Asia this morning with a new all time high of $1467.20 as euro-dollar rallied strongly. Silver had a more sideways trading day opening at $39.55 but failed to break through the previous 31 yr high set on Wednesday stalling at $39.70 and closing the day out at $39.63. Asia however has seen the metal break higher through the psychological $40 level to a new 31 year high of $40.12. Both metal shrugged off the ECB rate hike and news of a further large earthquake in Japan, siding more with a rally in crude oil prices which is continuing to support prices in the bullion market along with concerns over a possible shutdown of the US Federal Government.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.