the ‘risk on’ rally ran out of steam overnight with some mixed US data prompting traders to take profit. Consolidation of the recent gains could continue into the weekend but the EU summit is providing plenty of headline risk. Weekly Jobless Claims jumped to 388k vs. 339k previously. The October Philly Fed improved to 5.7 vs. 1.0 previously. Looking ahead, September Existing Home Sales forecast at 4.75mn vs. 4.82mn previously.
The Euro (EUR) failed to retest the highs at 1.3160 and pulled back below 1.3100 with a sour mood sweeping the markets later in the day. The outlook is for more gains as the EU crisis wanes and new measures are introduced but some bickering remains with the size and scope of the banking regulator a main point of contention. The Sterling (GBP) was sold aggressively with US stocks as Google results were released by mistake early and badly missed forecasts. The risk sensitive Pound fell back below 1.6100 to 1.6040 and is stable in Asia so far. Earlier in the day we saw day highs above 1.6160 after September Retail Sales at 0.6% vs. 0.4% previously. Looking ahead, EU Economic Summit continues. Also September Germany PPI forecast 0.3% vs. 0.5% previously.
The Japanese Yen (JPY) the USD/JPY was very strong supported on dips to Y79 and is at fresh month highs above Y79.40 in Asia trade Friday. EUR/JPY is leading the crosses higher with the important cross hitting Y104 overnight before pulling back on profit taking and US stocks. The main level is Y80 on the topside and has been a formidable resistance in the past. Australian Dollar (AUD) the AUD/USD risk on rally stalled at 1.0400 overnight and we are seeing some selling come through in Asia Friday. China GDP came out at 7.4% as expected and is helping the Aussie which had been under pressure because of China hard landing fears. Looking ahead, no data for Asia today.
Oil & Gold (XAU) Gold failed to break past resistance above $1750 and pulled back with the rest of the market in the US session. OIL/USD was steady with support under $92 holding for now.
Pairs to watch
