December�s CPI remained high at 4.1%, although it was down 0.2 from 4.3% in November. There continues to be rising unemployment and overall economic weakness in the US. Gold tumbled for the second day in a row to a low of $875 per ounce, coming off its all time record high of $914.50 on Monday.
News and Events:
For those looking for an answer to whether the Federal Reserve will cut interest rates by up to 50 basis points at the end of the month might have got a glimpse of the answer today. December�s CPI remained high at 4.1%, although it was down 0.2 from 4.3% in November. There continues to be rising unemployment and overall economic weakness in the US which has prompted the Bernanke led Fed to look more closely at long-term economic growth instead of inflation. Investors will be listening carefully as Fed Chairman Bernanke speaks to the House Banking Committee today.
The spot price of Gold tumbled for the second day in a row to a low of $875 per ounce, coming off its all time record high of $914.50 on Monday. As the greenback creeps back up in a pullback to the prevailing downtrend, investors took an opportunity to cash-in on their inflation hedges.
Today’s Key Issues (time in GMT):
09:00 EUR ECB Publishes Jan. Monthly Report (Text)
10:00 EUR Euro-Zone Trade Balance NOV 5.5B vs 6.1B
10:00 EUR Euro-Zone Trade Balance sa NOV 3.7B vs 4.0B
10:00 EUR Construction Output SA MoM NOV - - 0.60%
10:00 EUR Construction Output WDA YoY NOV - - 2.40%
13:30 CAD Int’l Securities Transactions NOV C$1.500 vs -24.3
13:30 USD Housing Starts DEC 1145K vs 1187K
13:30 USD Building Permits DEC 1135K vs 1152K
13:30 USD Initial Jobless Claims Jan-12 334K vs 322K
13:30 USD Continuing Claims Jan-05 2705K vs 2702K
15:00 USD Philadelphia Fed. JAN -1 -5.7
The Risk Today:
EurUsd still in its uptrend, bounced off the 22-day moving average at 1.4615 with a possible target of 1.4900. On the downside, 1.4523 holds as a key support. A break below this level is bearish.
GbpUsd keeping below a strong resistance of 1.9765. Breaking this level would open the door back to 1.9900 and 2.0000. For now, there is no obstacle down to 1.9265.
UsdJpy has hit our target of 107.22 (from Jan 4th Newsletter) with an additional spike to the next support of 106.50. The pair is very bearish below 111.50 with the next targets downward to 104.22 and 102.00.
UsdChf hit rock bottom, the lower most trend line on a spike to 108.38 (also our target 108.89, mentioned in our Jan 4th Newsletter). Look for a pullback to 1.1114.
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland