Profit Taking Halts U.S. Market Rally

stocks rallied in Europe but some weak US housing data prompting a reversal in the New York session on profit taking across the markets. December New Home Sales fell -2.2% vs. a 2.3% forecast. The weekly jobless claims came in near forecasts at 377k vs. 370k expected. In US stocks, DJIA -22 points closing at 12734, S&P -7 points closing at 1318 and NASDAQ -13 points closing at 2805.  Looking ahead, Q4 GDP forecast at 3% vs. 1.8% previously. January Consumer Sentiment forecast at 74.1 vs. 74 previously.

The Euro (EUR) the EUR/USD moved to the 1.3180 resistance level in Europe overnight buoyed higher by reports of some progress in the Greece debt deal negotiations and the large rally in US stocks the post FOMC meeting. Profit taking hit during the US session and the major retreated back to 1.3100 support. Looking ahead, ECB President Draghi speaks.

The Japanese Yen (JPY) the USD/JPY continued to retreat in the risk off environment overnight with Y77.50 support giving way and the major sliding to Y77.30. EUR/JPY topped out above Y102 before falling back under Y101.50. AUD/JPY performed well in Europe with the market moving to Y82.75 highs before finding support at Y82 in Asia this morning. UPDATE January CPI at -0.4% vs. -0.3%.

The Sterling (GBP) Cable enjoyed new highs above 1.5700 but came under pressure after weaker than expected December CBI Retail Sales data showed a slump to -22 vs. +6 in previously. The weakness in the consumer outlook is making the UK recovery outlook more uncertain going forward. EUR/GBP rallied to month highs on the weak data but reversed with the EUR/USD back to 0.8350 support.

Australian Dollar (AUD) the AUD/USD made an attempt at the 1.0700 key resistance before reversing back to lower 1.0600 region in the US session. The Asia session was very quiet with the Chinese markets still away on New Year holidays and the Australian market closed for Australia Day celebrations. Support is seen at 1.0580 previous resistance.

Oil & Gold (XAU) Gold dipped towards $1700 before rallying to $1730 fresh highs in the US session. Oil broke above $100 but a sharp rally to $101 was reversed back below $100 by the end of the trading session.