The Euro was set for a volatile day as traders digested the speculated EU rescue plan leaked over the weekend

<p>EUR/USD Range: 1.3361 – 1.3549 Support: 1.3400 Resistance: 1.3500   The euro/dollar pair hit a new 8 month low this morning of $1.3361 as traders […]</p>

EURUSD
EUR/USD
Range: 1.3361 – 1.3549
Support: 1.3400
Resistance: 1.3500

 

The euro/dollar pair hit a new 8 month low this morning of $1.3361 as traders continued to put cash behind the US dollar and sell the Euro. Inevitably there remains a correlation in euro demand to the progression of the sovereign debt crisis, with traders this morning refusing to count their chickens on the leaked EU rescue plan until 100% confirmation of both implementation and credibility can be attained. EU’s Rehn also hinted this morning that rate cuts could come at the ECB sooner rather than later which reinforces the view that the ECB is fast changing tact on monetary policy from tightening to easing.
AUDUSD
AUD/USD
Range: 0.9837-0.9611
Support: 0.9571
Resistance: 0.9927

 

The Aussie Dollar’s fall from grace continued on Monday, with the pair’s rate hitting a new 10 month low of 0.9611. Support could be found at the 50% retracement from the years low/high at 0.9571. The eurozone crisis and subsequent dollar demand is taking the lead in defining risk appetite and near term direction of the pair’s rate, a factor likely to continue for the rest of the week. Today we have US New Home Sales data out this afternoon (UK time) with sales expected to fall marginally to 0.295m units from a previous sales figure of 0.298m.

Gold
Range: 1662.49-1534.49
Support: 1550
Resistance: 1720

 

Golds spectacular fall from grace continued on Monday, with the precious metal price falling to a new 2 and a half month low of $1534.49. The perikious state of Gold prices in the last week has been triggered by dollar strength, which makes the price of Gold more expensive for non dollar holders, and the sharp equity falls, which has forced funds to liquidate dollar positions to cover margin calls on other asset classes as they fall sharply. Short term outlook for Gold is starting to look more bearish with prices rapidly falling below key technical support levels but nonetheless, Gold is likely to remain very volatile this week.

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