Forex - Hopes of an automaker rescue and Government spending pushed the Dollar and Yen lower.

Forex News and Events: The Dollar fell on Monday as President-elect Barack Obama's plan for massive infrastructure spending lifted global stock markets, spurring investors to reduce holdings of safe-haven Dollars and take on more risk. Congressional Democrats had sent on Monday a $15 billion auto sector rescue package proposal to the White House for consideration. This also helped global risk appetite, pushing the Dollar and Yen lower at the expense of higher-yielding currencies such as the Euro, Sterling and Australian dollar. Analysts said the twin hopes of an automaker rescue and more government spending calmed market turmoil that had sent yields on 3-month Treasury bills to near zero. Obama, who takes office Jan. 20, has talked of plans to create 2.5mio new jobs by 2011 and to launch the largest infrastructure investment since the 1950s. EurUsd rose 1.46% to 1.2914, its best daily gain in two weeks. EurJpy rose 1.67% to 120.08 after hitting 121 high. UsdJpy was little edge up 0.22% to 92.99 having hit 93.91 high. GbpUsd gained 1.15% to 1.4872 after posting 1.5048 intraday high. GbpJpy was up 1.39% at 138.30. UsdChf fell 0.99% to 1.2064. NzdUsd was up 1.94% to 0.5453. AudUsd was up 2.36% to 0.6628.

Today's Key Issues (time in GMT): 06:45 CHF October Unemployment rate adj. 2.7% vs 2.6% 06:45 CHF October Unemployment rate unadj. 2.7% vs 2.5% 07:00 EUR October German Exports -0.5% vs 0.7% (mom) 07:00 EUR October German Imports -3.5% vs 0.9% (mom) 07:00 EUR October German Trade balance €15.8b vs €13.7b 07:45 EUR October French Trade balance approx -€7.07b vs -€6.25b 08:30 SEK November CPI -0.8% vs 0.2% (mom) 08:30 SEK November CPI 2.5% vs 4% (yoy) 09:30 GBP October industrial output -1.7% v -0.2% (mom) 09:30 GBP October industrial output -5.2% v -2.2% (yoy) 09:30 GBP October Manufacturing output -1.4% v -0.8% (mom) 09:30 GBP October Manufacturing output -4.9% v -3.2% (yoy) 09:30 GBP October Trade Balance -£7.75b v -£7.48b 10:00 EUR December German ZEW current conditions -64 vs -50.4 10:00 EUR December German ZEW sentiment -45.2 vs -53.5 14:00 CAD BoC rate decision 1.75% vs 2.25% 14:30 GBP BoE’s Sentence speaks in London 15:00 USD October Pending Home sales change -3.2% vs -4.6% 17:00 EUR France’s Jouyet speaks to EU Parliament Panel 21:45 NZD Q3 Terms of trade -2.1% vs -0.5% 21:45 NZD Q3 Terms of trade Import 5.9% vs 4.8% 21:45 NZD Q3 Terms of trade Export 4.6% vs 4.4% 22:00 USD weekly ABC CCI -55 vs -54

The Risk Today: EurUsd Market is trading in the last 6-week trading range 1.2330 – 1.3298 but trying to break 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, recent 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 1.4471 last Thursday in current 5-month downtrend dropping from Mid-July 2.0158 high. Strong supports hold 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). Trading range is set between Tuesday 25th 1.5534 high and 1.4471 December low, respectively initial resistance and support. UsdJpy UsdJpy remains under pressure hitting 91.60 low on Friday. Strong support holds 90.91 24th October low. Further downtrend may open 79.70 April 1995 low. On the upside, strong resistance holds 100 pivot point, but only a recovery over 103 upper trendline and 105 pivot point will put focus again on 108 and 110.67 15th August high. Initial resistance holds 97.43 24th November high. UsdChf Market hit 1.2298 high on 21st November. 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 97.43 M 1.2298 M 1.2865 1.4675 92.50 1.2110 1.2490 T 1.4470 M 92.00 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