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U.S. Dollar Trading (USD) the market is focused on developments in the middle east with Oil surging $4 a barrel at the start of Europe to above $103 a barrel before reversing for the rest of the day. Rumors that Libyan dictator Gaddafi had been shot adding to the sharp pull back seen in the US session. In economic news, Weekly Jobless Claims fell to 391k vs. 410k previously. In US stocks, DJIA -37 points closing at 12068, S&P -1 points closing at 1306 and NASDAQ +14 points closing at 2737. Looking ahead, Revised Q4 GDP forecast at 3.3% from 3.2% previously.

The Euro (EUR) a dip going into Europe was bought up aggressively to see the major break above 1.3800. Traders note the hawkish Weber comments talking of rate rises and the Dovish US Fed comments from Bullard for the continuation of the uptrend. Overall the EUR/USD traded with a low of 1.3703 and a high of 1.3825 before closing the day around 1.3810 in the New York session. Looking ahead, German CPI is forecast at 0.5% vs. -0.5% m/m.

The Japanese Yen (JPY) Dollar weakness sent the major through Y82 to hit stops before rebounding on good cross buying. GBP/JPY has been sluggish in the past 3 days and the recent rally is threatening to unravel. Overall the USD/JPY traded with a low of 81.61 and a high of 82.49 before closing the day around 81.95 in the New York session.

The Sterling (GBP) underperformed the broader market as the concerns about the weakness of the UK economy offset the inflation/rate hiking expectations. EUR/GBP reclaimed 0.8500 and pushed higher threatening to break to the topside and change the trend of the cross. Overall the GBP/USD traded with a low of 1.6083 and a high of 1.6257 before closing the day at 1.6140 in the New York session.

The Australian Dollar (AUD) the market shrugged off risk aversion caused from Libya to buy the Aussie on any pull back and finished at day highs on a strong footing. AUD/NZD is testing 1.3500 and threatening to break higher. Overall the AUD/USD traded with a low of 0.9998 and a high of 1.0126 before closing the day at 1.0085 in the New York session.

Oil & Gold (XAU) extreme volatility continued with bouts of heavy profit taking sending the precious metal plummeting before recovering into the close. Overall trading with a low of USD$1391 and high of USD $1418 before ending the New York session at USD$1403 an ounce. Oil Surged before reversing on talk extra supply from OPEC to cover Libyan output drop. WTI Oil Closed -$1.45 at $98.35 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3525

1.3649

1.3820

1.3826

1.3862

USD/JPY

80.93

81.13

81.95

83.54

83.75

GBP/USD

1.6076

1.6101

1.6137

1.6279

1.6299

AUD/USD

0.9944

0.9982

1.0115

1.0158

1.0189

XAU/USD

1382.00

1389

1403

1420

1424

OIL/USD

95.00

96.50

96.60

100.00

103.50

Euro – 1.3820

Initial support at 1.3649 (Feb 23 low) followed by 1.3525 (Feb 22 low). Initial resistance is now located at 1.3826 (Feb 3 high) followed by 1.3862 (Feb 2 High)

Yen – 81.95

Initial support is located at 81.13 (Feb 4 low) followed by 80.93 (Jan 3 low). Initial resistance is now at 83.54 (Feb 22 high) followed by 83.75 (Feb 17 High).

Pound – 1.6137

Initial support at 1.6101 (Feb 22 low) followed by 1.6076 (Feb 17 low). Initial resistance is now at 1.6279 (Feb 3 high) followed by 1.6299 (Nov 4 High).

Australian Dollar – 1.0115

Initial support at 0.9982 (Feb 23 low) followed by the 0.9944 (Feb 15 low). Initial resistance is now at 1.0158 (Feb 18 high) followed by 1.0189 (Feb 8 high).

Gold – 1403

Initial support at 1389 (Feb 21 low) followed by 1382 (Feb 18 low). Initial resistance is now at 1420 (1407.97 plus 0.618 of 1396.30-1416.68) followed by 1424 (Jan 3 high).

Oil – 96.60

Initial support at 96.50 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday Resistance) followed by 103.50 (Feb Spike High).

Written by Anthony Darvall