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U.S. Dollar Trading (USD) the quiet mood seen on Wednesday was shattered with the EUR/USD breaking above 1.3300 after strong German data and finished near 1.3380. US data was strong with Weekly Claims remaining low at 351k but the Dollar was sold across the board including the USD/JPY which dipped back to Y80. The Euro (EUR) February German IFO improved to 109.6 vs. 108.7 previously helping inspire broad Euro strength. The EUR/GBP tested 0.8500 as the UK Asset purchase program expansion weighed on the Pound. EUR/CHF is also interesting stable near the 1.2050 with the 1.2000 SNB level untested. Looking ahead, German Q4 GDP previously at -0.2%. Also ahead, January New Home Sales forecast 0.315mln vs. 0.307mn previously.

The Japanese Yen (JPY) USD weakness meant the recent rally reversed slightly back to the Y80 but found support under the level and bounced back into the close. AUD/JPY and EUR/JPY continued to press higher as the stocks markets rallied in the US and European sessions. EUR/JPY is pressing up against Y107 and looking to Y110 as the next major level. The Sterling (GBP) underperformance continued with the GBP/USD struggling to take full advantage of the risk on trade with the MPC split decision on the Asset purchase program expansion amount still fresh in traders’ minds. GBP/USD did manage a test of 1.5800 but bigger is resistance is seen ahead especially between 1.6450-1.6500 Australian Dollar (AUD) the AUSD/USD tracked the Euro higher but stalled at 1.0700 and consolidated in the middle of its recent range until Early Asia on Friday were we saw the next leg higher on RBA talk. RBA Governor speaking to politicians talked up the Australian economy and stated current rates are appropriate and China growth still strong. Those looking for hints of more interest rate cuts are not receiving much from the central bank lately to support their case. Looking ahead, Q4 UK GDP forecast at -0.2% vs. -0.2% previously.

Oil & Gold (XAU) pushed higher but the overbought conditions prompted profit taking in the US session and the pair pulled back under $1780 into the close. OIL/USD continued to surge as the Iran standoff continued breaking above $108 and targeting $110. Some research notes going around suggest $150 a barrel is possible if war did break out.

Pairs to watch

OIL/USD Profit taking to slow the Accent into the weekend?

XAU/USD to test $1800oz?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3187

1.3231

1.3365

1.3435

1.3548

USD/JPY

78.36

78.80

80.15

80.44

81.50

GBP/USD

1.5600

1.5642

1.5745

1.5886

1.5929

AUD/USD

1.0610

1.0629

1.0740

1.0845

1.1007

XAU/USD

1702.00

1737

1778

1786

1800

OIL/USD

105.00

107.50

108.25

109.00

110.00