Greek Fears Resurface ahead of Thursday Deadline

U.S. Dollar Trading (USD) markets fell aggressively overnight with major levels broken on Global stock indexes and EUR/USD helping the Dollar to gain. With no major US data the market reacted to fresh Greece fears that the Private sector involvement (PSI) would not get the required 90% participation rate before tomorrow’s debt swap deadline and we could be entering a new phase of the Eurozone debt crisis. Looking ahead, February ADP employment forecast at 208k vs. 170k previously.

The Euro (EUR) Greece fears pushed the major down to 1.3100 but this level held firm and we saw a small bounce into the close and Asian morning Wednesday. The outlook is very uncertain ahead of the ECB and Debt deadline tomorrow with the potential for rate cuts and extreme volatility after the announcements. The Sterling (GBP) fell in sympathy with the Euro with the EUR/GBP cross remaining dead flat suggesting traders happy to let the Euro lead up to the major event risk tomorrow. Halifax House Prices fell -0.5% in February for a -1.9% annual race. Looking ahead, German Industrial Orders forecast at 0.5% vs. 1.7% previously.

The Japanese Yen (JPY) the major was dragged down on the spike in risk aversion with USD/JPY falling below Y81 to Y80.60 and the EUR/JPY falling below Y106. The AUD/JPY is also under pressure with the market testing Y85 in Asia today threatening to unwind if the stock selloff continues. Australian Dollar (AUD) the 1.0600-1.0840 range broke decisively overnight with the China slowdown and Greece fears pushing the risk currency to 1.0550. The market then sold to 1.0500 on weaker than expected GDP data released early in Asia morning Wednesday. UPDATE Q4 GDP at 0.4% vs. 0.8% forecast.

Oil & Gold (XAU) Gold fell through $1700oz and slumped to $1665oz before a small recovery into the close. OIL/USD’s pulled back to $105 before stabilizing.

Pairs to watch

AUD/USD New Downtrend?

XAU/USD Searching for Support as Dollar Surges

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.2974

1.3056

1.3140

1.3241

1.3309

USD/JPY

79.64

80.02

80.85

81.87

82.23

GBP/USD

1.5645

1.5722

1.5730

1.5876

1.5993

AUD/USD

1.0476

1.0527

1.0540

1.0696

1.0744

XAU/USD

1625.00

1656

1677

1709

1726

OIL/USD

103.00

104.50

105.10

107.00

108.00