U.S. Dollar Trading (USD) the market had been waiting for clarification from the FED in recent weeks since the rally in Bonds suggested there was a fresh debate on future US monetary policy. The FED Chairman squashed this debate overnight suggesting even more easing is possible to ensure that US economy has strong growth going forward. Looking ahead, Jan Case Shiller house prices forecast -0.6 vs. -1.1% previously m/m.
The Euro (EUR) The EUR/USD bulls seized the Bernanke comments to rally past 1.3300 and tested 1.3360 before consolidating the gains. The outlook is strong now with the USD strength all based on the US FED changing its course on monetary policy earlier than forecast. 1.3500 is the next major target. The Sterling (GBP) the GBP/USD broke back above 1.5900 retested the 1.5975 year highs. The 1.6000 key big figure is within striking distance and should be tested in the next 24 hours in the absence of fresh negative news. Looking ahead, UK March CBI distributive Trades forecast at -6 vs. -2 previously.
The Japanese Yen (JPY) USD/JPY grinded higher against the USD weakness with the Yen crosses roaring higher overnight. The Crosses are providing much of the Yen Weakness pushing the major up toward Y83 but the outlook is for range trading as the two safe havens are evenly matched. Australian Dollar (AUD) the AUD/USD buyers are cautious although we broke above the 1.0500 with last week China related selling still fresh in trader’s minds. The AUD/JPY is on the rally and will support if a fresh stock rally begins from Bernanke’s comments. Looking ahead, RBA Governor Speaks to Parliament.
Oil & Gold (XAU) Gold soared as the QE3 door reopened and is the most bullish news the precious metal could have received with it trading now back above $1680. Oil struggled to take full advantage of the bullish stocks and weak USD as the price is already elevated on Middle Eastern concerns.
Pairs to watch
XAU/USD $1700 today?
AUD/USD the Risk Currency a buy again?
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.3134 1.3192 1.3360 1.3380 1.3486
USD/JPY 81.97 82.38 82.90 84.26 85.00
GBP/USD 1.5771 1.5801 1.5965 1.6000 1.6090
AUD/USD 1.0336 1.0427 1.0525 1.0596 1.0637
XAU/USD 1605.00 1625 1688 1690 1709
OIL/USD 105.00 106.00 107.10 107.50 108.00