Hurricane 'Sandy' Keeps US Markets Shut Monday

Fresh European bickering and concerns that Hurricane Sandy will devastate the east coast of the US kept risk off most of Monday. Demand for the safe haven dollar was strong and gained across the board in light trading volume. Looking ahead, August Case Shiller forecast at 0.5% vs. 0.4% previously. October Consumer Confidence forecast at 72.5 vs. 70.3 previously.

The Euro (EUR)
Support was found under 1.2900 and we closed at the figure with risk off trade encouraging the bears to test downside. Spanish PM Rajoy stated he was personally against the idea of a budget commissioner and would call for rescue package if it is in the best interest of Spaniards.

The Sterling (GBP)
The GBP/USD fell back to the lower 1.60’s with little news and activity given the US Traders away. Some attention was paid to BOE Dale comments that Q4 GDP will likely be a lot lower than the positive Q3 print. Looking ahead, October CBI Realized Sales forecast at 7 vs. 6 previously. Also ECB President Draghi speaks.

The Japanese Yen (JPY)
The USD/JPY found support at the 200DMA and we bounced to Y79.80 into the close ahead of the BOJ today. Expectations are high that the BOJ will further expand its easing policies and help stimulate the economy through the weakening of the yen. EUR/JPY has been idle near the Y103 but is closely watched.

Australian Dollar (AUD)
The sour mood flowed into the Aussie with selling steady throughout the day. Support was found in the lower 1.0300 region and range trading is forecast while we the RBA meeting next Tuesday approaches. Looking ahead, BOJ Meeting forecast to hold at 0.1%.

Oil & Gold (XAU)
Gold retested $1714-18 resistance which held once again and we have fallen back to the familiar $1710 level. OIL/USD remained pressured on rallies and remained on the $85 big figure.

Pairs To Watch
USD/JPY: BOJ to allow Y80 test?

OIL/USD: Support at $85 to hold?

TECHNICAL COMMENTARY