Focus Shifts to Next Week s EU Summit

Euro-dollar closed in New York at 1.3440, as the rate settled back from recent highs of 1.3534, seen after the announced Fed cut in the cost of dollar swaps, coordinated through several major central banks. The rate was seen recovering off pullback lows of 1.3420 however. The rate marked lows in early Asian trade at 1.3430 before edging higher through the session, the move up aided by the better than rumoured China PMI data as well as reserve manager demand seen from around 1.3445. The rate pushed to an overnight high of 1.3473 in fairly dull trade, settling between 1.3445-1.3465 into the European open. Bids seen placed between 1.3430-1.3420, a break to open a deeper move toward 1.3400, with stops placed on as break of 1.3390. Further demand seen at 1.3370-1.3360, ahead of 1.3325-1.3320. Resistance remains at 1.3473, with a break to open a move toward 1.3500 and then 1.3534.

Cable closed in New York at 1.5700 after the rate pulled back from session highs of 1.5780 as risk appetite was given an added boost by the Fed action to cut the cost of dollar swap lines, coordinated with several major European central banks. Trade in Asia was contained within a range of 1.5674-1.5717 as the rate consolidated Wednesday’s gains, opening Europe around 1.5690. Local focus is seen on the CIPS manufacturing PMI, ahead of the release of the BoE’s Financial Stability Report. Developments in the eurozone remain the main drivers in the markets, with attention turning to focus on the December 9 meeting, with comments ahead to be watched. Cable support is seen at 1.5675-1.5670, ahead of 1.5660-1.5640, with stops below. Resistance at 1.5720, 1.5750-1.5755 ahead of 1.5780.

Gold saw another strong move higher yesterday after opening the day at 1,715.60. An early move up in Asia to 1,726.75 was initially reversed in Europe to a low of 1,700.90. As New York opened, the major central banks of the world announced a joint lowering of prices in US dollar swaps by 50 basis points, which led a massive risk-on rally in the euro and equity indices. New pricing adjustments will be in place until February 2013 and the Fed stated that further measures could and would be taken if required. Gold surged to 1,750.20 and remained firm into the close at 1,746.50. Asian markets have seen a retest of yesterday’s highs but stalling just above at 1,750.60 before easing back on some light profit taking to 1,743. Today’s support is at 1,700 and 1,682.40, with resistance at 1,767.10 and 1,779.50.