U.S. Dollar Trading (USD) had a mixed day losing plenty of ground against the Euro but gaining against many of the risk currencies as stock markets floundered. Hurting investor sentiment in the US session was the reports of a South Korean naval ship sinking near the North Korean coast. In US stocks, DJIA +9 points closing at 10850, S&P +1 points closing at 1166 and NASDAQ -2 points closing at 2395. Looking ahead, February Core PCE forecast at 0.1% vs. 0.0% previously.
The Euro (EUR) enjoyed a solid relief rally on short covering for most of the day as a clearer bailout picture for Greece emerged. EUR/USD broke above 1.3400 and EUR/JPY crept to the Y124 level. Further gains are possible as the market finds itself very short and in a solid risk taking mood. Overall the EUR/USD traded with a low of 1.3268 and a high of 1.3425 before closing at 1.3420. Looking ahead, March Consumer Sentiment is forecast at -17.
The Japanese Yen (JPY) was relatively contained in a 50 pip range against the Dollar but weakened against the Euro on the Greece news. AUD/JPY fell back below Y84 on Korean Concerns but is expected to be supported on dips as the interest rate differential supports. Overall the USDJPY traded with a low of 92.31 and a high of 92.89 before closing the day around 92.48 in the New York session. Looking ahead, February Retail Sales are forecast at 1.8% vs. 2.6% previously y/y. UPDATE Actual 4.2% y/y.
The Sterling (GBP) ended higher on the day but failed to replicate the solid gains seen on the Euro. EUR/GBP pushed above 0.9000 in response and this level has proven critical in recent weeks providing a solid pivot for the pair. Overall the GBP/USD traded with a low of 1.4808 and a high of 1.4923 before closing the day at 1.4899 in the New York session. February Mortgage Approvals are forecast at 48k.
The Australian Dollar (AUD) in a weak day for the risk currency the Aussie tested 0.9000 in the US session on a combination of geopolitical concerns and heavy EUR/AUD unwinding. The Aussie fell against nearly all pairs on speculation that recent gains across the board were unsustainable. Overall the AUD/USD traded with a low of 0.9002 and a high of 0.9116 before closing the US session at 0.9040.
Oil & Gold (XAU) regained the $1100 level on a combination of Euro strength and Korean Geopolitical concerns. Overall trading with a low of USD$1088 and high of USD$1110 before ending the New York session at USD$1107 an ounce. Oil closed at the Key $80 level in a volatile day of trading. Crude Oil was down -$0.53 ending the New York session at $80.00.
Euro - 1.3435
Initial support at 1.3270 (March 26 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3507 (Mar 24 high) followed by 1.3569 (Mar 23 high)
Yen - 92.40
Initial support is located at 91.77 (Mar 25 low) followed by 91.09 (Mar 24 low). Initial resistance is now at 92.96 (Mar 25) followed by 93.77 (Jan 8 high).
Pound - 1.4910
Initial support at 1.4784 (Mar 1 low) followed by 1.4704 (April 30 low). Initial resistance is now at 1.5049 (Mar 24 high) followed by 1.5113 (Mar 23 low).
Australian Dollar - 0.9050
Initial support at 0.8978 (Mar 4 low) followed by the 0.8936 (Mar 1 low). Initial resistance is now at 0.9139 (Mar 25 high) followed by 0.9199 (March 23 high).
Gold - 1107
Initial support at 1085 (Mar 24 low) followed by 1078 (Feb 12 low). Initial resistance is now at 1109 (Mar 22 high) followed by 1124 (0.618 of 1144.98-1092.47).
Oil - 80.00
Initial support at 79.50 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 82.00 (Intraday Resistance) followed by 83.20 (March high).