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U.S. Dollar Trading (USD) struggled to find strength for a second day of gains and closed roughly unchanged against most currencies. Oil pulled back on profit taking but remains volatile and closely linked to middle east violence. In US stocks, DJIA -1 points closing at 12213, S&P -1 points closing at 1320 and NASDAQ -14 points closing at 2751. Looking ahead, January Trade Balance forecast at forecast at 41.5bn vs. 40.6bn previously. Looking ahead, Weekly Jobless Claims are forecast at 378k vs. 368k previously.

The Euro (EUR) was stable finding support but focus still remains on the smaller European countries debt ahead of the EU summit this weekend. Portugal remains adamant that they do not need a bailout but the market is continuing to push yields higher. Overall the EUR/USD traded with a low of 1.3854 and a high of 1.3943 before closing the day around 1.3905 in the New York session. Looking ahead, January German Trade Balance forecast at 13.2bn vs. 14bn.

The Japanese Yen (JPY) was contained to a 20 pip range as the market took a break and stocks offered little direction to crosses. Q3 GDP was unrevised at -0.3% Q/Q. US Jobs data will be closely watch for a chance to break above the Y83 if improvement continues. Overall the USD/JPY traded with a low of 82.56 and a high of 82.96 before closing the day around 82.75 in the New York session.

The Sterling (GBP) was quite strong on improving economic data able to gain across the board. Janaury Trade Balance improved to -7.1 bn vs. -9.7 bn previously and February Shop Prices improved to 2.7% vs. 2.5% previously. Overall the GBP/USD traded with a low of 1.6136 and a high of 1.6246 before closing the day at 1.6215 in the New York session. Looking ahead, MPC Rate Announcement forecast to remain at 0.5%.

The Australian Dollar (AUD) was quiet as stock markets offered little direction with support found just below Tuesday’s low. RBA Stevens spoke in London and was very upbeat taking up the prospects of the commodity economy going forward. Overall the AUD/USD traded with a low of 1.0057 and a high of 1.0134 before closing the day at 1.0095 in the New York session. Update February Employment change of -10k vs. 20k forecast.

Oil & Gold (XAU) traded in a tight range waiting for further stimulus. Overall trading with a low of USD$1423 and high of USD $1436 before ending the New York session at USD$1429 an ounce. Fell on simmering Libyan fears with contagion the biggest threat. WTI Oil Closed -$1.03 at $103.99 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3744

1.3833

1.3915

1.3989

1.4036

USD/JPY

81.95

82.21

82.75

83.07

83.54

GBP/USD

1.6072

1.6126

1.6205

1.6344

1.6458

AUD/USD

0.9982

1.0002

1.0095

1.0202

1.0256

XAU/USD

1389.00

1409

1429

1450

1458

OIL/USD

102.50

104.0

104.90

105.00

107.00

Euro – 1.3915

Initial support at 1.3833 (Mar 3 low) followed by 1.3744 (Mar 2 low). Initial resistance is now located at 1.3989 (Mar 8 high) followed by 1.4036 (Mar 7 high)

Yen – 82.75

Initial support is located at 82.241 (Mar 8 low) followed by 81.95 (Mar 7 low). Initial resistance is now at 83.07 (Mar 4 high) followed by 83.98 (Feb 16 High).

Pound – 1.6205

Initial support at 1.6126 (Mar 8 low) followed by 1.6072 (Feb 28 low). Initial resistance is now at 1.6344 (March 2 low) followed by 1.6458 (Jan 19, 2010 high).

Australian Dollar – 1.0095

Initial support at 1.0002 (Feb 24 low) followed by the 0.9982 (Feb 23 low). Initial resistance is now at 1.0202 (Mar 1 high) followed by 1.0256 (Dec 31 high).

Gold – 1429

Initial support at 1409 (Mar 1 low) followed by 1389 (Feb 21 low). Initial resistance is now at 1450 (psychological resistance) followed by 1458 (1410.32 plus 1392.65-1440.32).

Oil – 104.80

Initial support at 104.00 (Intraday Support) followed by 102.50 (Intraday Support). Initial resistance is now at 105.00 (Feb Spike High) followed by 107.00 (Big Figure resistance).

Written by Anthony Darvall