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U.S. Dollar Trading (USD) stock markets around the world reacted to the 5%+ fall in Japanese stocks but the USD was on the back foot as the EURO helped most pairs to rally for a second day. Today the FOMC meet and this will be closely watched given their European Counterparts have focused on inflation threats and recent US data has improved somewhat. In US stocks, DJIA -51 points closing at 11993, S&P -7 points closing at 1296 and NASDAQ -14 points closing at 2700. Looking ahead, FOMC Forecast to hold at 0.0-0.25% band.
The Euro (EUR) the market rally continued from Friday with the EUR/USD testing the significant 1.4000 level on optimism that the new bailout plan will ease the debt crisis. Also helping was hawkish comments from ECB members about raising rates as early as next meeting. February Industrial Production was at expectations of 0.3% m/m. Overall the EUR/USD traded with a low of 1.3900 and a high of 1.4005 before closing the day around 1.3985 in the New York session. Looking ahead, March Economic Sentiment forecast at 15.7.
The Japanese Yen (JPY) opened the week extremely volatile until the BOJ helped stabilize the market with some calming money injections into the market causing a sharp rebound from below Y81 to above Y82. Concerns about nuclear meltdowns have added to uncertainty and volatility. The BOJ held at 0.1%. Overall the USD/JPY traded with a low of 80.61 and a high of 82.48 before closing the day around 81.80 in the New York session. Looking Ahead, Attention of the ongoing Nuclear Plant meltdown risk.
The Sterling (GBP) strong with the Euro grinding higher to test 1.6200 before settling in quiet trade. Traders have been selling the Pound in recent session as the weakness of the recovery overpowers the inflation risk/rate hikes risks. Overall the GBP/USD traded with a low of 1.6025 and a high of 1.6202 before closing the day at 1.6180 in the New York session.
The Australian Dollar (AUD) the Aussie was hit hard in the risk off trade falling from 1.0150 to 1.0050 in quiet trade. AUD/JPY was wild with the USD/JPY moves but is struggling while stock remain under pressure. Overall the AUD/USD traded with a low of 1.0045 and a high of 1.0114 before closing the day at 1.0090 in the New York session. Looking ahead, RBA March Minutes released.
Oil & Gold (XAU) Traded in a $10 range with markets edgy on next move. Overall trading with a low of USD$1417 and high of USD $1431 before ending the New York session at USD$1424 an ounce. Found support and rallied in $3 a barrel from lows. WTI Oil Closed $0.50 at $101.50 a barrel.
Euro – 1.3990
Initial support at 1.3744 (Mar 2 low) followed by 1.3705 (Feb 24 low). Initial resistance is now located at 1.4036 (Mar 7 high) followed by 1.4086 (Nov 8 high)
Yen – 81.85
Initial support is located at 80.62 (Mar 14 low) followed by 80.00 (Big Figure Support). Initial resistance is now at 83.54 (Feb 22 high) followed by 83.98 (Feb 16 High).
Pound – 1.6175
Initial support at 1.5962 (38.2% retrace of 1.5345-1.6344) followed by 1.5845 (50% retrace of 1.5345-1.6344). Initial resistance is now at 1.6243 (March 9 low) followed by 1.6344 (Mar 2 high).
Australian Dollar – 1.0080
Initial support at 0.9944 (Feb 15 low) followed by the 0.9898 (76.4% retrace of 0.9804-1.0202). Initial resistance is now at 1.0134 (Mar 8 high) followed by 1.0202 (Mar 1 high).
Gold – 1425
Initial support at 1403 (Mar 10 low) followed by 1399 (Feb 25 low). Initial resistance is now at 1432 (Mar 10 high) followed by 1458 (1410.32 plus 1392.65-1440.32).
Oil – 101.35
Initial support at 100.00 (Intraday Support) followed by 98.00 (Intraday Support). Initial resistance is now at 101.50 (Big figure resistance) followed by 103.00 (intraday resistance).
Written by Anthony Darvall