Daily Outlook - Stock Market Reverses Lower, Gold Record Highs

By @ibtimes on

U.S. Dollar Trading (USD) a sharp selloff in US equities sent the Dollar higher against risk assets on fresh save haven demand. Investors though shunned the Dollar vs. other safe haven options with CHF and Gold both gaining heavily. February PMI Manufacturing increased to 61.4 vs. 60.8 forecast. In US stocks, DJIA -168 points closing at 12058, S&P -20 points closing at 1306 and NASDAQ -44 points closing at 2737. Looking ahead, February ADP Employment Reports forecast at 175k vs. 187k.

The Euro (EUR) came under pressure after topping out early in the day near 1.3850 to grind lower with US stocks. February German Unemployment Change at -52k vs. -15k forecast. Overall the EUR/USD traded with a low of 1.3762 and a high of 1.3856 before closing the day around 1.3770 in the New York session. Looking ahead, January PPI is forecast at 1.0% vs. 0.8% m/m.

The Japanese Yen (JPY) was strong across the markets as stocks dived and the USD/JPY struggled to maintain above the Y82 level. US Fed Chief Bernanke spoke in the US session but offered little more except to reinforce being committed to the QE2 600bn program. Overall the USD/JPY traded with a low of 81.77 and a high of 82.26 before closing the day around 81.85 in the New York session.

The Sterling (GBP) Held up better than most but was under pressure against the USD as stock losses mounted. EUR/GBP selling helped support the major but GBP/JPY and GBP/CHF both fell. February Nationwide House Prices were at 0.3% vs. -0.2% forecast. Overall the GBP/USD traded with a low of 1.6070 and a high of 1.6280 before closing the day at 1.6240 in the New York session. Looking ahead, February Construction PMI is forecast at 52.9 vs. 53.7 previously.

The Australian Dollar (AUD) was relatively calm given the large data releases and sharp moves in US stocks. The RBA held at 4.75% as forecast and offered little clues as to the future. January Retail Sales were strong at 0.4% vs. 0.3% forecast m/m. Overall the AUD/USD traded with a low of 1.0121 and a high of 1.0204 before closing the day at 1.0140 in the New York session. Update Q4 GDP at 0.7% vs. 0.6% forecast Q/Q.

Oil & Gold (XAU) Gold surged to record highs on renewed Oil spikes and concern that revolutions will spread. Overall trading with a low of USD$1409 and high of USD $1435 before ending the New York session at USD$1430 an ounce. Oil resurged on news that Iran demonstrators had been arrested. WTI Oil Closed +$2.92 at $99.90 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3525

1.3705

1.3775

1.3862

1.3948

USD/JPY

80.93

81.13

81.95

82.07

82.52

GBP/USD

1.6072

1.6187

1.6250

1.6379

1.6458

AUD/USD

0.9982

1.0088

1.0130

1.0200

1.0256

XAU/USD

1389.00

1399

1430

1435

1450

OIL/USD

95.00

96.50

100.30

101.00

103.50

Euro - 1.3775

Initial support at 1.3705 (Feb 24 low) followed by 1.3649 (Feb 23 low). Initial resistance is now located at 1.3862 (Feb 2 high) followed by 1.3948 (76.4% retrace of 1.4282-1.2867)

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 82.07 (Feb 25 high) followed by 82.52 (Feb 24 High).

Pound - 1.6250

Initial support at 1.6187 (Feb 28 Support) followed by 1.6072 (Feb 28 low). 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 - 1.0130

Initial support at 1.0088 (Feb 25 low) followed by the 0.9982 (Feb 23 low). Initial resistance is now at 1.0200 (Feb 4 high) followed by 1.0256 (Dec 31 high).

Gold - 1430

Initial support at 1399 (Feb 25 low) followed by 1389 (Feb 21 low). Initial resistance is now at 1435 (March 1 high) followed by 1450 (Round Figure Resistance).

Oil - 100.30

Initial support at 96.50 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 101.00 (Intraday Resistance) followed by 103.50 (Feb Spike High).

Written by Anthony Darvall

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