Profit taking Helps USD

U.S. Dollar Trading (USD) gained across the board as profit taking hit the majors after stock markets stalled and Gold slipped back on decreasing sovereign credit risk. US stocks stayed in a very tight range but ended slightly weak. In US stocks, DJIA -13 points closing at 10552, S&P -1 points closing at 1138 and NASDAQ +5 points closing at 2332.

The Euro (EUR) tested 1.3700 in Asia after weekend reports from French President Sarkozy that Greece would be given financial support if it needed it. The pair was weak for the rest of the day as profit taking set in and support at 1.3620 was tested. March Sentix was -7.5 vs. -8.2 in February. Overall the EUR/USD traded with a low of 1.3604 and a high of 1.3706 before closing at 1.3625.

The Japanese Yen (JPY) was unchanged against the USD trading sideways in a 30 pip range but most of the crosses slipped back in US trading. GBP/JPY and EUR/JPY were the biggest losers as the pairs tracked their majors lower. Overall the USDJPY traded with a low of 90.13 and a high of 90.68 before closing the day around 90.25 in the New York session. Looking ahead, January Leading Indicators previously at 3.

The Sterling (GBP) traded up to just under the 1.5200 level in the European session but then heavy EUR/GBP buying and general USD strength sent the pair skidding towards the key 1.500 level once again. Overall the GBP/USD traded with a low of 1.5029 and a high of 1.5198 before closing the day at 1.5040 in the New York session. Looking ahead, January Trade Balance forecast at -7bn vs. -7.28bn previously.

The Australian Dollar (AUD) tapped out at 0.9130 on multiple occasions before slipping back to 0.9080 support as the Dollar strengthened in the US session. Hurting the pair was the falls in Gold, AUD/JPY and the AUD/NZD which slipped below 1.3000. Overall the AUD/USD traded with a low of 0.9073 and a high of 0.9135 before closing the US session at 0.9090. Looking ahead, February Business Confidence previously at 15.

Oil & Gold (XAU) slipped back on USD strength and tightening Sovereign CDS. Overall trading with a low of USD$1118 and high of USD$1138 before ending the New York session at USD$1122 an ounce. Crude Oil finished roughly flat after testing both the resistance and support throughout the day. Crude Oil was up +$0.10 ending the New York session at $81.80.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3436

1.3531

1.3630

1.3736

1.3788

USD/JPY

88.14

88.98

90.30

90.96

91.90

GBP/USD

1.4959

1.4994

1.5065

1.5209

1.5422

AUD/USD

0.8936

0.8979

0.9090

0.9147

0.9211

XAU/USD

1111.00

1118

1125.00

1144

1161.00

OIL/USD

78.00

80

81.80

82.00

82.50

Euro - 1.3630

Initial support at 1.3531 (Mar 5 low) followed by 1.3436 (Mar 2 low). Initial resistance is now located at 1.3736 (Mar 3 high) followed by 1.3788 (Feb 17 high)

Yen - 90.30

Initial support is located at 88.98 (Mar 5 low) followed by 88.14 (Mar 4 low). Initial resistance is now at 90.96 (0.5 of 93.77-88.14) followed by 91.90 (Feb 22 high).

Pound - 1.5065

Initial support at 1.4994 (Mar 5 low) followed by 1.4959 (Mar 3 low). Initial resistance is now at 1.5209 (Mar 1 high) followed by 1.5422 (Feb 25 low).

Australian Dollar - 0.9090

Initial support at 0.8979 (Mar 4 low) followed by the 0.8936 (Mar 1 low). Initial resistance is now at 0.9147 (Jan 21high) followed by 0.9211 (Jan 20 high).

Gold - 1125

Initial support at 1118 (Mar 8 low) followed by 1111 (Mar 1 low). Initial resistance is now at 1144 (Mar 3 high) followed by 1161 (Jan 11 high).

Oil - 81.80

Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 82.00 (Intraday Resistance) followed by 82.50 (Intraday Resistance).