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US Unemployment Improving, Egypt Overlooked
Last week’s currency trading review
The Dollar had a mixed week with Strong Economic data supporting both the currency and the stock markets. Manufacturing ISM improved to 60.8 vs. 57 previously and Services ISM at 59.4 vs. 57.1. On Weekly Jobless Claims are forecast at 415k vs. 457k. On Friday, Non Farm Employment Change was at 36k vs. 121k previously. The Euro was volatile with an early rally reversed aggressively after the ECB meeting on Thursday failed to deliver what traders expected. President Trichet at the press conference after the ECB meeting stated rates where ‘appropriate’ and failed to detail a roadmap to raising rates. German Retail Sales fell -0.3% vs. 1.9% forecast. The EUR/USD fell -0.21% closing at 1.3580, after opening the week at 1.3610.
The Japanese Yen was caught in a 100 pip range for most of the week but finished at highs on the USD/JPY given the sharp US Unemployment rate drop. AUD/JPY and GBP/JPY led the crosses higher as risk seekers sold the low yielding Yen. The USD/JPY gained +0.06% closing at 82.17, after opening at 82.12. The GBP rebounded on strong risk appetite and a record print in the January Manufacturing PMI up to 62 vs. 58.7 previously. EUR/GBP took advantage of the Euro drop to break below 0.8500. The GBP/USD gained +1.56% closing at 1.6109 after opening at 1.5858. The AUD opened the week under pressure due to uncertainty over the Egyptian protest situation but was able to overcome this to track the soaring commodities market higher. The AUD/USD gained +1.93% closing at 0.9896 after opening at 0.9885.
The Forex Trading Week Preview
In the States; On Wednesday, Fed Chief Bernanke Speaks. On Thursday, Weekly Jobless Claims are forecast at 410k vs. 415k previously. On Friday, February UoM Consumer Confidence forecast at 75 vs. 74.2 previously. Also released, December Trades Balance forecast at -40.2bn vs. -38.3bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Wednesday, German Trade Balance forecast at 11bn vs. 12.9bn previously. On Friday, January CPI is forecast at 1.9% vs. 1.7% previously. Also released, ECB Trichet speaks. In the UK, On Wednesday, December Trade Balance forecast at -8.8bn vs. -8bn previously. On Thursday, BOE Rate Annoucement forecast at 0.5% with BOE Asset Purchase Program remaining at 200bn. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; No major data this week. In Australia; On Tuesday, Westpac Consumer Confidence previously at 104.6. On Thursday, January Unemployment Change is forecast at 20k vs. 2.3k previously with the Unemployment Rate staying at 5.0%. Also on Thursday, RBA Governor Stevens Speaks. We will provide our previews and reviews of these data releases in the daily summary.
Euro – 1.3605
Initial support at 1.3571 (Jan 31 low) followed by 1.3541 (Jan 24 low). Initial resistance is now located at 1.3826 (Feb 3 high) followed by 1.3862 (Feb 2 High)
Yen – 82.20
Initial support is located at 80.93 (Jan 3 low) followed by 80.54 (Nov 9 low). Initial resistance is now at 82.93 (Jan 28 high) followed by 83.22 (Jan 27 high).
Pound – 1.6130
Initial support at 1.6059 (Jan 18 high) followed by 1.6010 (Feb 1 low). Initial resistance is now at 1.6173 (Feb 4 high) followed by 1.6279 (Feb 3 High).
Australian Dollar – 1.0140
Initial support at 1.0056 (Feb 2 low) followed by the 0.9964 (Feb 1 low). Initial resistance is now at 1.0256 (Dec 31 high) followed by 1.0300 (Big Figure Resistance).
Gold – 1345
Initial support at 1323 (Jan 31 low) followed by 1308 (Sep 28 low). Initial resistance is now at 1371 (Jan 20 high) followed by 1379 (Jan 19 high).
Oil – 89.35
Initial support at 89.00 (Intraday Support) followed by 88.50 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.50 (Intraday Resistance).
Written by Anthony Darvall