Following is a selection of comments from analysts on important technical developments in the foreign exchange market.
EURO AND GOLD: "Euro/dollar was probably the biggest mover overnight, perhaps struggling to sustain the over stretched rally in the face of the strength we are seeing in gold (interestingly cable dropped to and held over its equivalent channel at $1.8015 which the euro and Swiss franc broke earlier in the week.
Euro/dollar though dipped through $1.2200 and didn't quite reach our $1.2170/30 target zone before taking all the stops out back to $1.2300ish in front of the elections this weekend, while gold has pushed and pushed and pushed to now put pressure on the previous highs at $457/oz and then $464.
There seems no stopping the yellow metal at the moment and its worth knowing that there is little in the way of meaningful resistance above $464 until we reach the $490's
EURO/DOLLAR's: squeeze overnight has seen the euro cross-rates perform well too, with euro/sterling extending the gains seen post the poor UK data release to test trendline resistance this morning at 67.87 pence, with a break here opening 68.50 pence.
But EURO/YEN has been the main beneficiary and adds confirmation to our comments yesterday that this cross may just want to range around 136.00 yen for another 1-2 weeks. We are back to that pivot zone now, and with euro/dollar potentially set to push back towards its channel highs at $1.2600/$1.2700 we can see euro/yen working its way back towards 138/139 yen."
DECEMBER CANADIAN DOLLAR FUTURES: "The December Canadian dollar fell moderately in sympathy with the euro and on (the) ideas US inflation will rise, resulting in more Fed tightening. Of course, inflation favours stronger commodity prices, favouring commodity based economies like Canada.
It's too early to call a top and aggressive traders should hold long positions with a stop at $0.8269. Support (basis December): $0.8400, $0.8360, $0.8315. Resistance: $0.8500, $0.8540, $0.8585, $0.8630. Turning Points: None."
DECEMBER AUSTRALIAN DOLLAR FUTURES: "The December Australian dollar fell with the euro and (the) ideas US inflation might become a problem resulting in more US rate hikes.
Chartwise, prices need to grab hold at current levels to keep the uptrend intact. Support (basis December): $0.7600, $0.7560, $0.7515. Resistance: $0.7700, $0.7740, $0.7785, $0.7830. Turning Points: None."
DECEMBER GOLD FUTURES: "Yesterday's strong rally in December gold was very impressive in view of strength in the dollar. Basically, it looks like the hedge fund crowd expects energy inflation to spread through the economy. On the other side of the coin, a recent survey of economists saw inflation staying under control.
However, the 'hot' money is flowing into this market and the chart is bullish so it's best to look for further gains.
SUPPORT (BASIS DECEMBER): 454, 449, 444, 438, 433, 427. Resistance" 461, 472, 478, 483, 489, 494." Currency bid prices at 1:11 pm EDT (1711 GMT). All data taken from Reuters calculated from the levels at 4:30 pm EDT (2030 GMT) in the previous New York session.