Forex - Currency market stayed in tight range on Thanksgiving day

Forex News and Events: The Yen gained against the Dollar and Euro on Thursday as worries about the cost of fiscal stimulus packages and whether they would succeed in limiting a global recession kept the low-yielding currency supported. The Dollar, normally a beneficiary of risk-averse sentiment, eased against a basket of major currencies as concern over the weak US economy and the impact of fiscal stimulus measures on the nation's balance sheet weighed. Major currencies were confined to tight ranges however and liquidity was lighter than usual due to the US Thanksgiving holiday. Some Dealers said attacks in Mumbai overnight which claimed over 100 lives heightened geopolitical fears, feeding into risk-reduction trades which benefitted the Yen. Traders also cited talk of repatriation flows from Japanese life insurers, giving a boost to the Japanese currency. Yesterday, German data showed a 3-1/2 year labor market boom is fading as recession bites. Germany is also set to tell the European Union it will record a budget deficit of 0.5% of GDP next year, and post a shortfall of 1.5% pct in 2010, a finance ministry source said. Yesterday, UsdJpy fell 0.21% to 95.44, while EurJpy dropped 0.22% to 123.06. EurUsd was steady at 1.289. GbpUsd rose 0.44% to 1.5400. UsdChf was 0.16% lower to 1.2006. Currency movements were small with most investors choosing to stay on the sidelines during the US holiday. Investors were continuing to digest Tuesday's $800 billion stimulus plan in the US to support mortgage and other debt markets, as well as Europe's plan for a 200 billion Euro package announced Wednesday.

Today's Key Issues (time in GMT): 07:45 EUR October French Producer prices -0.9% vs -0.4% 08:30 SEK Q3 GDP -0.1% vs 0% (qoq) 08:30 SEK Q3 GDP 0.4% vs 0.7% (yoy) 08:30 SEK October Retail Sales -0.6% vs -0.5% (mom) 08:30 SEK October Retail Sales 0.5% vs -0.6% (yoy) 10:00 EUR November Euro-zone Inflation 2.3% vs 3.2% (yoy) 10:00 EUR November Euro-zone Unemployment rate 7.6% vs 7.5% 10:30 CHF KOF Indicator 0.19 vs 0.35 11:00 GBP November CBI distributive trades -35 vs -27 13:30 CAD Q3 Current account C$5.1B vs C$6.76b 13:30 CAD October Producer prices -1.2% vs -1.2% (mom) 13:30 CAD October Raw materials prices -7.8% vs -7.2% (mom)

The Risk Today: EurUsd Market is still trading in the last 3-week trading range 1.2330 – 1.3298 but breaking up the triangle consolidation pattern. This may open the way to 1.3500 target equal to 1.3302-1.2334 spread. On the further upside, only a return over 1.4000 (former trendline support) and 1.5000 will release actual pressure and may put key resistance 1.6000 into focus. Resistance holds 1.4002 former trendline support. Initial resistance holds 1.3298 end October high. On the downside, weakness below 1.2690 may open the way down to trendline support 1.2208. Next long-term support holds 1.1640 November 2005 low. Further support holds 1.0739 September 2003 low. GbpUsd Market dropped as low as 1.4558 on November 13th in current 3-month downtrend dropping from late October 1.6673 high. Strong supports hold 1.4560 trendline and 1.3682 March 2001 low. On the upside, strong resistance holds 1.6673 30th October high ahead of 1.7080 (38.2% retracement of 2.1161 – 1.4558). Further resistance holds 1.7860 (50% retracement). Tuesday volatile market hit 1.5534 high and actual initial resistance. UsdJpy Market has been holding slightly below 99.80 September-October trendline resistance in the latest weeks and even dropping to 93.56 low last week. Initial resistance holds 97.43 Monday high. On the upside, only a recovery over 103 upper trendline and 105 pivot point will put focus again on 108 and 110.67 15th August high. Meanwhile, strong resistance holds 100 pivot point. Further pressure in the current downtrend might open the way down to 94.80 13th November low and then 79.70 April 1995 low. Strong support holds 90.91 24th October low. UsdChf Market hit 1.2298 high on Friday. Further strength may look for 1.2463 strong resistance ahead of 1.2506 (61.8% retracement of 1.4278 – 0.9639 decline). On the downside, renewed weakness below 1.1605 initial support and 1.1203 30th October low would undermine the current uptrend and reverse through 1.0692 22nd September low and down to 1.0500 and 1.0375. Such a move may look for 1.0013 15th July low in front of 0.9637 17th March low.

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.5000 S 1.7080 S 103.07 T 1.2506 S 1.3500 P 1.6673 S 100.00 P 1.2470 T 1.2960 M 1.5534 M 99.48 M 1.2298 M 1.2940 1.5405 95.30 1.1970 1.2490 T 1.4558 T 94.80 M 1.1605 M 1.2308 M 1.4042 S 92.77 S 1.0692 S 1.1640 T 1.3682 T 90.91 S 1.0500 K S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot