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Greece Austerity Budget goes to the Vote

U.S. Dollar Trading (USD) the market sentiment improved on the Greece announcement that there had been an agreement between the EU/IMF and a new Austerity budget to be now voted on over the weekend. Weekly Jobless Claims fell to 358k and is another solid release adding to the improving jobs argument. The Euro (EUR) the EUR/USD traded at fresh highs briefly above 1.3300 on the back of the Greece breakthrough and ECB President Draghi comments that there were tentative signs of stabilization to economic outlook. In US stocks, DJIA +6 points closing at 12890, S&P +2 points closing at 1352 and NASDAQ +11 points closing at 2927. Looking ahead, January German CPI forecast at -0.4%m/m. Later we have February Michigan Consumer Sentiment at 74.5 vs. 75 previously.

The Japanese Yen (JPY) the rally moved into its 5th day overnight grinding to Y77.50 with the US jobs inspiring the latest move higher. EUR/JPY extended to above Y103 for fresh 2012 highs as the recovery continued. The Sterling (GBP) range traded above the 1.5800 hitting day highs in Europe with the BOE holding rates at 0.5% and increasing the asset purchase program to 325bn to help improve ‘weak near-term growth’. Australian Dollar (AUD) underperformed with the market unable to make fresh daily highs and closing back under the 1.0800 level. The RBA quarterly statement remained cautious on the outlook with downgrades to 2013 growth and inflation targets. Looking ahead, January PPI forecast at 0.1% vs. -0.1% previously.

Oil & Gold (XAU) Gold rallied to $1750 but failed for a second time this week and is threatening a more substantial pullback. OIL/USD tested $100 and although did not break above closed just under the big level.

Pairs to watch

EUR/USD finding strong above resistance at 1.3300

XAU/USD to test support?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3026

1.3089

1.3270

1.3335

1.3386

USD/JPY

76.49

76.75

77.60

77.42

77.82

GBP/USD

1.5730

1.5789

1.5805

1.5947

1.6096

AUD/USD

1.0672

1.0702

1.0730

1.0880

1.1007

XAU/USD

1702.00

1710

1731

1763

1786

OIL/USD

97.00

98.50

99.40

100.00

101.00