Daily Outlook - Portugal Debt Concerns Resurface

By @ibtimes on

U.S. Dollar Trading (USD) continued weakness in the European session was reversed as the stock market rally stalled and focus on Portugal took some of the steam out of the EUR/USD rally. Oil Continued to press higher on Concerns the Libyan crisis may extend for a long time and this is also dampening sentiment. In US stocks, DJIA -17 points closing at 12018, S&P -4 points closing at 1293 and NASDAQ -8 points closing at 2683. Looking ahead, February New Home Sales forecast at 0.29mln vs. 0.28mln previously.

The Euro (EUR) fresh highs in Europe reversed on concerns that the Portugal Politics will get in the way of austerity measures required for the small EU country to avoid a bailout. Debt costs increasing may reignite the Debt Crisis with Germany a focal critic and close to elections. The ECB moving to raise rates is supporting the EUR/USD although if the Debt crisis reignites they may have to delay action. Overall the EUR/USD traded with a low of 1.4161 and a high of 1.4250 before closing the day around 1.4180 in the New York session. Looking ahead, January Industrial Orders forecast at 1.5% vs. 2.1% previously.

The Japanese Yen (JPY) kept to a 40 pip range around Y81 as the market waited for more BOJ intervention and information from the Nuclear plant crisis. AUD/JPY and GBP/JPY continued to track higher and are well supported at highs. Overall the USD/JPY traded with a low of 80.83 and a high of 81.26 before closing the day around 81.00 in the New York session. Looking ahead, February Trade Balance forecast 894bn vs. -471bn previously.

The Sterling (GBP) had a good day across the board as economic data supported. February CPI gained 0.7% m/m to bring the y/y to 4.4% which is well above the target rate. March CBI Industrial Orders were strong at +5 in March. Overall the GBP/USD traded with a low of 1.6290 and a high of 1.6404 before closing the day at 1.6355 in the New York session. Looking ahead, MPC Minutes forecast at to remain at 3 raise - 6 hold - 0 cut.

The Australian Dollar (AUD) the Aussie moved above 1.0100 as AUD/JPY buying and positive momentum continued to push the commodity currency higher. Further gains back to all time highs above 1.0250 will require the stock markets to resume their 6 month uptrend and print fresh highs. Overall the AUD/USD traded with a low of 1.0036 and a high of 1.0130 before closing the day at 1.0090 in the New York session.

Oil & Gold (XAU) remained strong in the same range as the market waited for the next catalyst. Overall trading with a low of USD$1419 and high of USD $1432 before ending the New York session at USD$1427 an ounce. Oil continued to move higher on Geopolitical concerns. WTI Oil Closed +$1.67 at $104.00 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3981

1.4139

1.4170

1.4282

1.4414

USD/JPY

78.83

80.00

81.00

82.01

82.45

GBP/USD

1.6061

1.6293

1.6355

1.6458

1.6517

AUD/USD

0.9781

0.9932

1.0080

1.0162

1.0202

XAU/USD

1386.00

1400

1428

1436

1444

OIL/USD

100.00

103.50

105.30

107.00

110.00

Euro - 1.4170

Initial support at 1.4139 (Mar 21 low) followed by 1.3981 (Mar 18 low). Initial resistance is now located at 1.4282 (Nov 4 high) followed by 1.4414 (Jan 19 2010 high)

Yen - 81.00

Initial support is located at 80.00 (Major Level) followed by 78.83 (Mar 18 low). Initial resistance is now at 82.01 (Mar 15 high) followed by 82.45 (Mar 14 High).

Pound - 1.6355

Initial support at 1.6293 (Mar 22 low) followed by 1.6061 (Mar 18 low). Initial resistance is now at 1.6458 (Jan 2010 high) followed by 1.6516 (Dec 7 2009 high).

Australian Dollar - 1.0080

Initial support at 0.9932 (Mar 21 low) followed by the 0.9781 (Mar 18 low). Initial resistance is now at 1.0162 (Mar 14 high) followed by 1.0202 (Mar 1 high).

Gold - 1428

Initial support at 1400 (Big figure support low) followed by 1386 (Mar 17 low). Initial resistance is now at 1436 (Mar 15 high) followed by 1444 (Mar 7 High).

Oil - 105.30

Initial support at 103.50 (Intraday Support) followed by 100.00 (Intraday Support). Initial resistance is now at 107.00 (Intraday resistance) followed by 110.00 (Year High).

Written by Anthony Darvall

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