U.S. Dollar Trading (USD) a very quiet day on the markets with little fresh news to inspire direction. US stocks came under slight pressure as investors locked in profits from the recent rally and the USD/JPY was the main mover down with the Yen crosses as resistance above Y84 held a second attempt. Looking ahead, Weekly Jobless Claims forecast at 354k vs. 351k previously.

The Euro (EUR) some negative news from the Eurozone regarding Spanish banks exposure to Portugal inspired the EUR/USD reversal from 1.3280 to 1.3180. With US stocks also under pressure the EUR/JPY tested Y110 with the USD/JPY pullback. The outlook is for more range trading but the immediate downside is seen limited. The Sterling (GBP) the GBP/USD reversed in Europe as well after a surprise 7-2 MPC vote with two members wanting even more QE at the last meeting. The EUR/GBP was unaffected and demonstrated the resilience of the Pound in recent sessions and GBP/AUD extended gains to test 1.5200. Looking ahead, February UK Retail Sales forecast at -0.4% vs. 0.9% previously. Also ECB President Draghi speaks.

The Japanese Yen (JPY) the USD/JPY was a big mover overnight falling from Y84 with US interest rates retreating as Bernanke failed once again overnight significantly change his dovish tune. The Yen crosses came under heavy pressure as well with AUD/JPY and EUR/JPY leading on the way down. Support is expected soon and the Yen weakness trend is seen continuing in the medium term. Australian Dollar (AUD) the AUD/USD found good selling above 1.0500 with the China news continue to weigh and US stock falls and negative Euro News also adding to the downside. The outlook is mixed with further downside favored if Chinese data continued to soften. Looking ahead, Chinese March HSBC PMI slumps to 48.1 vs. 49.6 previously.

Oil & Gold (XAU) Gold kept quiet overnight with the $1650-60 range holding firm and the market ending unchanged. Oil was bullish after bouncing off $106 closing above $107.

Pairs to watch

EUR/JPY pullback better levels to buy?

AUD/USD Chinese PMI to show further slowdown?

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3111

1.3172

1.3230

1.3302

1.3357

USD/JPY

81.97

82.87

83.30

84.26

85.00

GBP/USD

1.5603

1.5694

1.5865

1.5910

1.5993

AUD/USD

1.0359

1.0401

1.0410

1.0500

1.0640

XAU/USD

1625.00

1642

1651

1675

1685

OIL/USD

105.00

106.00

106.70

107.00

108.00