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U.S. Dollar Trading (USD) Some very strong Economic data and signals from the ECB that they are close to raising rates sent investor confidence soaring and stock markets posted their biggest gains of the year. Weekly Jobless Claims improved falling to 368k vs. 398k forecast. February PMI Manufacturing improved to 59.7 vs. 59.4. In US stocks, DJIA +191 points closing at 12258, S&P +22 points closing at 1330 and NASDAQ +50 points closing at 2798. Looking ahead, February Non Farm Payrolls forecast at 185k vs. 36k previously. February Unemployment Rate Forecast at 9.1% vs. 9.0% previously.
The Euro (EUR) surged towards 1.4000 after the ECB President Trichet talked up the centrals banks ‘vigilance’ in fighting inflation. The prospect of rate rises as early as April sent the Euro higher even as this change of stance was widely expected. Overall the EUR/USD traded with a low of 1.3831 and a high of 1.3977 before closing the day around 1.3960 in the New York session. Looking ahead, ECB President Trichet Speaks again.
The Japanese Yen (JPY) was weaker across the board in a strong risk on move that sent the USD/JPY back above Y82. EUR/JPY was the best performer sky rocketing on ECB announcement. Overall the USD/JPY traded with a low of 81.71 and a high of 82.53 before closing the day around 82.35 in the New York session.
The Sterling (GBP) fell on weak Services PMI at 52.6 vs. 54.5 previously and then again on heavy EUR/GBP buying which added to the Pressure on the pound. Cable held up well but in a day which should have resulted in gains given the large stock market the pair underperformed. Overall the GBP/USD traded with a low of 1.6251 and a high of 1.6336 before closing the day at 1.6285 in the New York session. Looking ahead, February Halifax HPI forecast at -0.5% vs. 0.8% previously.
The Australian Dollar (AUD) was well supported on AUD/JPY buying and stock market support but the market was not willing to test 1.0180 and is looking fatigued after heavy gains in recent months. The RBA is well ahead of other central banks in the tightening process and given the recent flooding may be less likely to continue the cycle. Overall the AUD/USD traded with a low of 1.0112 and a high of 1.0191 before closing the day at 1.0135 in the New York session.
Oil & Gold (XAU) Gold fell due to less safe haven demand on strong economic data. Overall trading with a low of USD$1409 and high of USD $1437 before ending the New York session at USD$1418 an ounce. Oil fell on profit taking and talk that Libyan talks may emerge. WTI Oil Closed -$0.31 at $101.92 a barrel.
Euro – 1.3950
Initial support at 1.3744 (Mar 2 low) followed by 1.3705 (Feb 24 low). Initial resistance is now located at 1.4000 (Psychological Support) followed by 1.4086 (Nov 8 High)
Yen – 82.40
Initial support is located at 81.62 (Feb 28 low) followed by 81.13 (Feb 4 low). Initial resistance is now at 82.52 (Feb 24 high) followed by 82.89 (Feb 23 High).
Pound – 1.6285
Initial support at 1.6216 (Mar 2 low) followed by 1.6145 (61.8% retrace of 1.6031-1.6330). Initial resistance is now at 1.6379 (76.4% retrace of 1.7043-1.4231) followed by 1.6458 (Jan 19, 2010 high).
Australian Dollar – 1.0125
Initial support at 1.0088 (Feb 25 low) followed by the 0.9982 (Feb 23 low). Initial resistance is now at 1.0202 (Mar 1 high) followed by 1.0256 (Dec 31 high).
Gold – 1418
Initial support at 1409 (Mar 1 low) followed by 1389 (Feb 21 low). Initial resistance is now at 1442 (1392.65 plus 1418.15-1368.28) followed by 1450 (Round Figure Resistance).
Oil – 102.15
Initial support at 100.00 (Intraday Support) followed by 99.00 (Intraday Support). Initial resistance is now at 103.50 (Feb Spike High) followed by 105.00 (Big Figure resistance).
Written by Anthony Darvall