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U.S. Dollar Trading (USD) stocks moved higher in the US session after hitting day lows in Europe on fears Greece may not reach a debt deal. The mood brightened on reports that negotiations were continuing and that Greece politicians have agreed to fresh austerity measures. The Euro (EUR) the EUR/USD found support at 1.3100 and surged to 1.3270 on the Greece austerity news before consolidating the gain in Asia. The mood is improving and we are looking to the topside as fears continue to ease that the debt crisis will spread to other larger European countries. In US stocks, DJIA +33 points closing at 12878, S&P +2 points closing at 1347 and NASDAQ +2 points closing at 2904. Looking ahead, Greece negotiations are expected to produce fresh headlines.

The Japanese Yen (JPY) The USD/JPY grinded higher with Yen crosses in rally mode led by the EUR/JPY which moved above Y102 for the first time in 2 weeks. A USD/JPY move above the Y77 level would be bullish technically but gains are expected to be slow and steady in any event. The Sterling (GBP) moved up against the USD but lost ground against the Euro which moved higher on the positive Greece developments. GBP/USD is above 1.5900 and could easily test 1.6000 in coming sessions. Australian Dollar (AUD) The AUD/USD was the strongest currency in the market when the RBA shocked traders leaving interest rates at 4.25% vs. a 0.25% most expected. AUD/USD broke above 1.0800 and is eyeing all-time highs at 1.1000 seen last year. Looking ahead, Q4 NZD Employment Change forecast at 0.4% vs. 0.2% Q/Q. January Chinese CPI forecast at 4.0% vs. 4.1% y/y.

Oil & Gold (XAU) Gold move sharply higher in the US session from $1710 to $1750 before consolidating at the resistance level. OIL/USD tracked the Euro and Gold higher up to $99 as the USD came under pressure.

Pairs to watch

EUR/USD to continue pushing higher?

XAU/USD back to $1763?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3026

1.3089

1.3280

1.3335

1.3386

USD/JPY

76.49

76.75

77.10

77.15

77.42

GBP/USD

1.5730

1.5789

1.5920

1.5947

1.6096

AUD/USD

1.0672

1.0702

1.0840

1.0880

1.1007

XAU/USD

1702.00

1710

1750

1763

1786

OIL/USD

97.00

98.50

99.40

100.00

101.00