U.S. Dollar Trading (USD) came under selling pressure once again with the downtrend resuming after gains on Tuesday. February ADP employment beat forecasts at 217k vs. 175k expected. Also helping investor sentiment was an upbeat January Beige Book which reported all 12 Fed regions had expansion. In US stocks, DJIA +8 points closing at 12066, S&P +2 points closing at 1308 and NASDAQ +10 points closing at 2748. Looking ahead, Weekly Jobless Claims forecast at 398k vs. 391k previously. February PMI Manufacturing forecast at 59.5 vs. 59.4 previously.
The Euro (EUR) reclaimed 1.3800 in the European session as EU PPI accelerated to 6.1% y/y in January. The market is keenly awaiting today's ECB announcement with expectations of talk about interest rate rises to address the increasing inflation threat. Overall the EUR/USD traded with a low of 1.3741 and a high of 1.3892 before closing the day around 1.3860 in the New York session. Looking ahead, ECB Rate Announcement forecast to hold at 1.0% and Press Conference with President Trichet.
The Japanese Yen (JPY) tested resistance at Y82 twice throughout the day but failed to hold above the figure and fell back in the US session on renewed dollar selling. Friday's Non Farm US Jobs report is always a major mover for the USD/JPY and could help set short term direction in March. Overall the USD/JPY traded with a low of 81.55 and a high of 82.13 before closing the day around 81.80 in the New York session.
The Sterling (GBP) enjoyed solid gains tracking its European neighbor higher to break above 1.6300 decisively and finish on a strong footing. Helping the major move higher was the strong jump in the February Construction PMI to 56.5 vs. 52.9 forecast. Overall the GBP/USD traded with a low of 1.6213 and a high of 1.6347 before closing the day at 1.6325 in the New York session. Looking ahead, January UK Retail Sales forecast at 0.5% vs. -0.3% previously m/m.
The Australian Dollar (AUD) bounced off lows in the Asia Session to rally back to 1.0180 resistance before settling into the close. Q4 GDP was strong at 0.7% vs. 0.6% forecast. The recent uptrend is in danger of running out of steam as fresh highs fail to emerge and risk events increase around the world. Overall the AUD/USD traded with a low of 1.0083 and a high of 1.0185 before closing the day at 1.0160 in the New York session.
Oil & Gold (XAU) traded at fresh record highs before consolidating. Overall trading with a low of USD$1427 and high of USD $1441 before ending the New York session at USD$1433 an ounce. Oil surged higher on news that Libyan planes had bombs rebels in an Oil Factory. WTI Oil Closed +$2.70 at $102.34 a barrel.
Euro - 1.3860
Initial support at 1.3744 (Mar 2 low) followed by 1.3705 (Feb 24 low). Initial resistance is now located at 1.3974 (Nov 9 high) followed by 1.4086 (Nov 8 High)
Yen - 81.85
Initial support is located at 81.62 (Feb 28 low) followed by 81.13 (Feb 4 low). Initial resistance is now at 82.24 (Mar 1 high) followed by 82.52 (Feb 24 High).
Pound - 1.6325
Initial support at 1.6216 (Mar 2 low) followed by 1.6145 (61.8% retrace of 1.6031-1.6330). Initial resistance is now at 1.6379 (76.4% retrace of 1.7043-1.4231) followed by 1.6458 (Jan 19, 2010 high).
Australian Dollar - 1.0160
Initial support at 1.0088 (Feb 25 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 - 1433
Initial support at 1409 (Mar 1 low) followed by 1389 (Feb 21 low). Initial resistance is now at 1442 (1392.65 plus 1418.15-1368.28) followed by 1450 (Round Figure Resistance).
Oil - 102.70
Initial support at 100.00 (Intraday Support) followed by 99.00 (Intraday Support). Initial resistance is now at 103.50 (Feb Spike High) followed by 105.00 (Big Figure resistance).
Written by Anthony Darvall