EUR/USD – Stops triggered through $1.2995/90 as funds add weight, traders say, with EUR/USD extending lows to $1.2978. Reported demand at $1.2975/70 so far remain untouched. A break of $1.2970 to expose next batch of stops, which if triggered to then open a deeper move toward $1.2950.
GBP/USD – Gets pulled down to $1.5604 on EUR/USD deeper corrective pullback, allowing EUR/GBP to extend lows to stg0.8315. However, the cross said to have barriers in place at stg0.8300 and at tg0.8280 which is said to be drawing support and cushioning a move lower. GBP/USD support seen down to $1.5590 with stops noted below.
EUR/JPY – Tracks EUR/USD to post fresh lows Y99.53 as the pair extends losses in thin trade. Demand seen into Y99.40/35, a break opens support from the Bollinger band at Y99.25, ahead of Y99.15/10 (Y99.10 – 2 Jan intraday low).
AUD/USD – Extends losses through $1.0320 support to post fresh lows $1.0317. Demand seen into $1.0300 with stops set on a break, through here opens $1.0260/55.
GOLD – Spot Gold is flat in Europe Wednesday, benefiting from a resurgence in physical demand, but under pressure amid declines across the broader markets, including the Euro. Other commodities were also trading lower, while the EUR was down 0.2% against the USD. Gold is priced in USD, and therefore tends to share a negative correlation with the greenback.
Commodities, equities and the EUR are under pressure Wednesday as investors book profits on recent gains ahead of key data, including the U.S. ADP employment report and industrial new orders later in the global day. Still, market analysts said physical demand is robust, particularly out of Asia, and should help to cap losses.
In an annual outlook report, Saxo Bank said it expects the price of Gold to stabilize after the market’s late-2011 correction, with fresh investment flows driving the price toward $1,800/oz during the first quarter, and even higher later in the year. Saxo said Gold, and to a certain extent silver, should benefit from continued risk aversion as investors worry over the global growth outlook.
“Supporting factors also include the negative yield environment, currently seen among more than half of the G-20 nations, combined with strong physical demand from central banks and emerging-market investors,” the bank said.
EasyForexNews Research Team