GOLD hits record high against EURO and GBP

U.S. Dollar Trading (USD) was softer across the board after downside action on the Euro and GBP abated and commodities rallied in the US session. Stock markets struggled to hold gains but the damage to the USD was already done and fresh weakness can not be ruled out as positive sentiment prevails. In US stocks, DJIA +2 points closing at 10405, S&P +2 points closing at 1118 and NASDAQ +7 points closing at 2280. Looking ahead, February ADP employment forecast at -15k vs. -22k previously. Also released, February ISM Services PMI rose to 51 vs. 50.5 previously.

The Euro (EUR) hit new year lows under 1.3450 but then was bought for the rest of the day on positive developments from Greece. The Greece PM looking to sure up support for fresh Greek debt issuance stated he would be making 'Brave Decisions'. Overall the EUR/USD traded with a low of 1.3459 and a high of 1.3659 before closing at 1.3610. Looking ahead, German Retail Sales are forecast at -0.5% vs. 0.9% previously.

The Japanese Yen (JPY) crosses did well in the 'risk on' environment but late USD weakness saw the the USD/JPY break down to fresh 2010 lows near 88.60. EUR/JPY found solid support under Y120 and could retrace if the Eurozone Sentiment improves again today. Overall the USDJPY traded with a low of 88.54 and a high of 89.39 before closing the day around 88.75 in the New York session.

The Sterling (GBP) encountered weakness at the start of Europe but this was contained and the pair rallied with the Euro up to 1.5000 resistance. EUR/GBP resumed its uptrend and closed at the 0.9100 level. Overall the GBP/USD traded with a low of 1.4852 and a high of 1.4992 before closing the day at 1.4980 in the New York session. Looking ahead, Service PMI is forecast at 55 vs. 54.5 previously.

The Australian Dollar (AUD) found support from the rise in Interest Rates from the RBA meeting yesterday as the central bank increased by 0.25% to 4.0%. Some traders were quick to take profit however as the statement declined to comment on the pace of further rate hikes this year. Strength was seen in the US session on the back of Gold's move higher. Overall the AUD/USD traded with a low of 0.8957 and a high of 0.9060 before closing the US session at 0.9035. Looking ahead, Q4 GDP is forecast at 0.9% vs. 0.2% previously.

Oil & Gold (XAU) broke through resistance at $1130 as the bulls took control once again. Overall trading with a low of USD$1114 and high of USD$1138 before ending the New York session at USD$1114 an ounce. Crude Oil toyed with the $80 a barrel level as the Dollar weakened. Crude Oil was up +$0.91 ending the New York session at $79.68.

TECHNICAL COMMENTARY

       

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3405

1.3424

1.3610

1.3692

1.3788

USD/JPY

88.25

88.56

88.75

89.50

90.36

GBP/USD

1.4704

1.4784

1.4960

1.5209

1.5317

AUD/USD

0.8863

0.8936

0.9035

0.9071

0.9093

XAU/USD

1104.00

1111

1133.00

1137

1141.00

OIL/USD

77.00

78

79.60

80.00

82.50

Euro - 1.3610

Initial support at 1.3424 (May 18 low) followed by 1.3405 (0.618 of 1.2330-1.5144). Initial resistance is now located at 1.3692 (Feb 23 high) followed by 1.3788 (Feb 17 high)

Yen - 88.75

Initial support is located at 88.56 (Feb 4 low) followed by 88.25 (0.618 of 1.2330-1.5144). Initial resistance is now at 89.50 (Feb 26 high) followed by 90.36 (Feb 23 high).

Pound - 1.4960

Initial support at 1.4784 (Mar 1 low) followed by 1.4704 (April 30 low). Initial resistance is now at 1.5209 (Mar 1 high) followed by 1.5317 (Feb 26 low).

Australian Dollar - 0.9035

Initial support at 0.8936 (Mar 1 low) followed by the 0.8863 (Feb 26 low). Initial resistance is now at 0.9071 (Feb 23 high) followed by 0.9093 (Jan 25 high).

Gold - 1133

Initial support at 1111 (Mar 1low) followed by 1104 (Feb 26 low). Initial resistance is now at 1137 (Mar 2 high) followed by 1141.78 (Jan 20 high).

Oil - 79.60

Initial support at 78.00 (Intraday Support) followed by 77.00 (Intraday Support). Initial resistance is now at 80.00 (Intraday Resistance) followed by 82.50 (Intraday Resistance).