Daily Outlook - Dollar Rallies on Hawkish FEDspeak

By @ibtimes on

U.S. Dollar Trading (USD) stocks markets continued to rally on strong economic data with Q4 GDP revised to 3.1% vs. 2.8% previously. Also helping the USD was hawkish comments from FED member Plosser that rates would have to rise in the not too distant future. High Oil prices did dent US consumer Sentiment with the UoM index dropping to 67.5 vs. 68.2 previously. In US stocks, DJIA +50 points closing at 12220, S&P +4 points closing at 1313 and NASDAQ +6 points closing at 2742. Looking ahead, February Pending Home Sales -0.8% vs. -2.8% previously.

The Euro (EUR) ended the week on the back foot as the Portugal issue festered and refused to go away with many pricing in a bailout over the next couple of weeks. March German IFO fell slightly to 111.1 vs. 111.3 previously. Overall the EUR/USD traded with a low of 1.4052 and a high of 1.4193 before closing the day around 1.4063 in the New York session. Looking ahead, ECB President Trichet speaks.

The Japanese Yen (JPY) USD/JPY started to rally on Friday as the USD moved higher on the FED speak from Plosser. EUR/JPY and GBP/JPY held up well even as the majors fell and could be set for moves higher over the medium term as they edge closer to raising rates themselves. Overall the USD/JPY traded with a low of 80.87 and a high of 81.49 before closing the day around 81.40 in the New York session.

The Sterling (GBP) fell back to the 1.6000 major level as Cable fell in sympathy with the EURO. EUR/GBP fell back slightly from the 0.8800 level and is developing into a closely watched gauge of GBP relative strength. Overall the GBP/USD traded with a low of 1.6021 and a high of 1.6142 before closing the day at 1.6021 in the New York session.

The Australian Dollar (AUD) the Aussie hit all time post float highs up near 1.0300 before coming under profit taking pressure and succumbing to USD strength. AUD/JPY crept higher as the uptrend continued post Japanese Earthquake sell off. Overall the AUD/USD traded with a low of 1.0184 and a high of 1.0294 before closing the day at 1.0252 in the New York session.

Oil & Gold (XAU) Gold continued to suffer from bouts of profit taking. Overall trading with a low of USD$1438 and high of USD $1422 before ending the New York session at USD$1428 an ounce. Was slightly lower on the day but supported at highs on middle east tensions. WTI Oil Closed -$0.20 at $105.25 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3981

1.4053

1.4060

1.4215

1.4249

USD/JPY

78.83

80.00

81.65

82.01

82.45

GBP/USD

1.5964

1.5984

1.6020

1.6267

1.6401

AUD/USD

1.0038

1.0113

1.0265

1.0302

1.0333

XAU/USD

1400.00

1419

1426

1447

1450

OIL/USD

100.00

103.50

105.35

107.00

110.00

Euro - 1.4060

Initial support at 1.4053 (Mar 24 low) followed by 1.3981 (Mar 18 low). Initial resistance is now located at 1.4215 (Mar 23 high) followed by 1.4249 (Mar 22 high)

Yen - 81.65

Initial support is located at 80.00 (Major Level) followed by 78.83 (Mar 18 low). Initial resistance is now at 82.01 (Mar 15 high) followed by 82.45 (Mar 14 High).

Pound - 1.6020

Initial support at 1.5984 (Mar 18 low) followed by 1.5964 (Feb 11 low). Initial resistance is now at 1.6267 (Mar 24 high) followed by 1.6401 (Mar 22 high).

Australian Dollar - 1.0265

Initial support at 1.0113 (Mar 24 low) followed by the 1.0038 (Mar 22 low). Initial resistance is now at 1.0302 (1.0187 plus 1.0114-1.0226) followed by 1.0333 (July 1982 high).

Gold - 1426

Initial support at 1419 (Mar 22 low) followed by 1400 (Round Number). Initial resistance is now at 1448 (Mar 24 high) followed by 1450 (Round Number).

Oil - 105.35

Initial support at 103.50 (Intraday Support) followed by 100.00 (Intraday Support). Initial resistance is now at 107.00 (Intraday resistance) followed by 110.00 (Year High).

Written by Anthony Darvall

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