U.S. Dollar Trading (USD) remained under pressure even as US economic data picked up with investor risk appetite encouraging Dollar selling. Chicago February PMI jumped to 71.2 vs. 68.8 previously. In US stocks, DJIA +95 points closing at 12226, S&P +7 points closing at 1327 and NASDAQ +1 points closing at 2782. Looking ahead, US PMI Manufacturing February forecast at 61 vs. 60.8 previously.
The Euro (EUR) resumed its rally breaking above 1.3800 in a strong move higher. EU January Inflation remained above the 2% target rate at 2.3% albeit lower than 2.4% forecast. Some of the strength in the major is due to changing interest rate expectations but most is stemming from broad USD weakness. Overall the EUR/USD traded with a low of 1.3711 and a high of 1.3857 before closing the day around 1.3805 in the New York session. Looking ahead, February German Unemployment Change is forecast at -15k vs. -13k previously.
The Japanese Yen (JPY) a very subdued market with rally's in the crosses providing support for the USD/JPY. EUR/JPY and GBP/JPY led the crosses higher but the outlook is volatile with US jobs data and the ECB meeting later this week. Overall the USD/JPY traded with a low of 81.60 and a high of 82.00 before closing the day around 81.85 in the New York session. Update January Unemployment Rate remains at 4.9% as expected.
The Sterling (GBP) enjoyed solid gains on end of month USD selling and a break below 0.8500 for the EUR/GBP cross. The Pound has been keeping to familiar levels lately but should break out soon giving its volatile trading range historically. Overall the GBP/USD traded with a low of 1.6070 and a high of 1.6280 before closing the day at 1.6240 in the New York session. Looking ahead, February Nationwide House Prices forecast at -0.3% m/m vs. -0.1% m/m previously.
The Australian Dollar (AUD) was strong but struggled to make fresh highs with the other majors as traders noted that China downgraded its 5 year growth target. The heavy data this week is kicked off today with the RBA rate announcement where the statement will be closely scrutinized for clues on future movements. Overall the AUD/USD traded with a low of 1.0119 and a high of 1.0194 before closing the day at 1.0185 in the New York session. Looking ahead, RBA Rate announcement forecast at 4.75%. UPDATE January Retail Sales at 0.4% vs. 0.3% forecast.
Oil & Gold (XAU) Gold tested resistance at $1415 before falling on easing Libyan fears. Overall trading with a low of USD$1404 and high of USD $1417 before ending the New York session at USD$1410 an ounce. Oil eased on news that a Libyan port had reopened for exports. WTI Oil Closed -$0.86 at $97.05 a barrel.
|Currency||Sup 2||Sup 1||Spot||Res 1||Res 2|
Euro - 1.3820
Initial support at 1.3705 (Feb 24 low) followed by 1.3649 (Feb 23 low). Initial resistance is now located at 1.3862 (Feb 2 high) followed by 1.3948 (76.4% retrace of 1.4282-1.2867)
Yen - 81.95
Initial support is located at 81.13 (Feb 4 low) followed by 80.93 (Jan 3 low). Initial resistance is now at 82.07 (Feb 25 high) followed by 82.52 (Feb 24 High).
Pound - 1.6275
Initial support at 1.6187 (Feb 28 Support) followed by 1.6072 (Feb 28 low). Initial resistance is now at 1.6299 (Nov 4 high) followed by 1.6313 (Jan 21 2010).
Australian Dollar - 1.0190
Initial support at 1.0088 (Feb 25 low) followed by the 0.9982 (Feb 23 low). Initial resistance is now at 1.0200 (Feb 4 high) followed by 1.0256 (Dec 31 high).
Gold - 1410
Initial support at 1399 (Feb 25 low) followed by 1389 (Feb 21 low). Initial resistance is now at 1420 (1407.97 plus 0.618 of 1396.30-1416.68) followed by 1424 (Jan 3 high).
Oil - 97.00
Initial support at 96.50 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday Resistance) followed by 103.50 (Feb Spike High).
Written by Anthony Darvall