Last week's currency trading review

The Dollar mixed in a big week of moves with stock markets soaring and Oil hitting fresh year highs. Strong Economic Data helped equity markets move higher and kept risk sensitive currencies very strong. Ongoing Middle Eastern turmoil has led to substantial gains in Oil up over $4 a barrel. US Jobs Data was very strong with 216k jobs created in March and the Unemployment rate falling to 8.8%. The Euro was very strong moving higher on the back firming ECB rate hike expectations at this week's meeting and some very strong EUR/JPY buying. Also helping the single currency rally was EUR/GBP which broke above strong resistance at 0.8800. The EUR/USD is up +1.04% currently at 1.4233, after opening the week at 1.4085.

The Japanese Yen was the main currency in focus with heavy selling across the board. USD/JPY pushed above Y84 on Fridays strong Jobs data and the crosses all moved significantly higher. AUD/JPY broke to year highs above Y87 as investor returned to the carry trade. The USD/JPY is up +3.22% currently at 84.05, after opening at 81.34. The GBP continued to underperform unable to take full advantage of the positive risk environment as BOE expectations remain uncertain. GBP/JPY did move higher back above Y135 and is helping to keep cable above 1.6000. March Nationwide House Prices increased 0.5% vs. -0.1 forecast. March Manufacturing PMI dropped to 57.1 vs. 60.9 previously. The GBP/USD is down 0.43% currently at 1.6110 after opening at 1.6040. The AUD shined in the risk on environment with the market buying the high yielding currency as sentiment improved. Commodities also surged and helped to underpin in a week of little Australian economic data. The upside is in focus with daily multi-decade highs as USD weakness encourages further gains. The AUD/USD is up +1.22% currently at 1.0384 after opening at 1.0257.

The Forex Trading Economic Data Ahead Preview

In the States; On Monday, FED Chief Bernanke Speaks. On Tuesday, ISM Services forecast at 59.5 vs. 59.7 previously. On Thursday, Weekly Jobless Claims are forecast at 385k vs. 388k previously. On Friday, Canadian March Employment Change is forecast at 30k vs. 15k previously. March Unemployment rate forecast at 7.7% vs. 7.8% previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; February EU Retail Sales forecast at 0.6% vs. 0.2%. On Wednesday, February Factory Orders are forecast at 0.5% vs. 2.9% m/m previously. On Thursday, ECB Rate Announcement forecast at 1.25% vs. 1.0% previously in what will be a major market event. On Friday, German Trade Balance forecast at 13bn vs. 10.1bn previously. In the UK, On Tuesday, March PMI Services forecast at 52.5 vs. 52.6 previously. On Thursday, BOE Rate Announcement forecast at unchanged at 0.5%. On Friday, PPI forecast at 5.1% vs. 5.3% previously.

We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Thursday, BOJ Rate Decision forecast to remain at 0-0.1%. In Australia; On Tuesday, February Trade Balance forecast at 1.2bn vs. 1.87bn previously. Also released, RBA Cash Target Forecast to remain at 4.75%. On Thursday, March Employment Change is forecast at 24k vs. -10k. previously. March Unemployment Rate is forecast at 5.0% vs. 5.0%.

We will provide our previews and reviews of these data releases in the daily summary.



TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3981

1.4021

1.4225

1.4249

1.4282

USD/JPY

82.57

83.13

84.15

85.00

85.62

GBP/USD

1.5873

1.5937

1.6120

1.6169

1.6267

AUD/USD

1.0205

1.0269

1.0395

1.0400

1.0425

XAU/USD

1386.00

1402

1430

1439

1450

OIL/USD

105.00



108.00

108.50

110.00

111.00





Euro - 1.4225

Initial support at 1.4021 (Mar 28 low) followed by 1.3981 (Mar 18 low). Initial resistance is now located at 1.4249 (Mar 22 high) followed by 1.4282 (Nov 4 high)



Yen - 84.15

Initial support is located at 83.13 (Apr 1 low) followed by 82.57 (Mar 31 low). Initial resistance is now at 85.00 (Big Level) followed by 85.62 (50% retrace of 94.99-76.25).

Pound - 1.6120

Initial support at 1.5937 (Mar 28 low) followed by 1.5873 (50% retrace of 1.5345-1.6401). Initial resistance is now at 1.6169 (50% retrace of 1.6401-1.5937) followed by 1.6267 (Mar 24 high).



Australian Dollar - 1.0395

Initial support at 1.0269 (Mar 30 low) followed by the 1.0205 (Mar 29 low). Initial resistance is now at 1.0400 (Big Figure Resistance) followed by 1.0425 (0.9706 plus 0.9537-1.0256).

Gold - 1430

Initial support at 1402 (Mar 18 low) followed by 1386 (Mar 17 low). Initial resistance is now at 1439 (Mar 31 high) followed by 1450 (Round Number).



Oil - 108.50

Initial support at 108.00 (Intraday Support) followed by 108.00 (Intraday Support). Initial resistance is now at 110.00 (Intraday resistance) followed by 111.00 (Intraday Resistance).





Written by Anthony Darvall