USD Gains on Greece Flare Up
CURRENCY TRADING SUMMARY – 19th March (00:30GMT)
U.S. Dollar Trading (USD) was strong across the board on the weak Euro news and US discount rate hike rumor. Weekly Jobless Claims improved to 457k vs. 462k previously and US CPI was 0.0% in February. In US stocks, DJIA +45 points closing at 10779, S&P -1 points closing at 1165 and NASDAQ +2 points closing at 2391.
The Euro (EUR) was hurt comments from a Greece official at the start of Europe that the IMF may be looked to for support as EU commitments so far have fallen short of financial support. EUR/USD broke below 1.3700 on the news and was heavy for the rest of the day finally coming to rest at 1.3600. Overall the EUR/USD traded with a low of 1.3585 and a high of 1.3741 before closing at 1.3610. Looking ahead, German PPI is forecast at 0.1% vs. 0.8% m/m.
The Japanese Yen (JPY) risk aversion sent the USD/JPY through Y90 in Early Europe before solid buying was found and the pair rallied 100 pips to 90.80 on US discount rate rumors. EUR/JPY was weak on the Greece News but strong stocks kept most other pairs buoyant and near highs. Overall the USDJPY traded with a low of 89.74 and a high of 90.83 before closing the day around 90.50 in the New York session.
The Sterling (GBP) mixed data and and a stronger USD forced the Pound to give up Wednesday's gains and the pair slipped back to lower 1.52 support. Public Debt increased by 12.4b vs. 14.6b forecast. February CBI orders slipped -37 vs. -33 forecast. Overall the GBP/USD traded with a low of 1.5215 and a high of 1.5331 before closing the day at 1.5250 in the New York session. Looking ahead, MPC Tucker Speaks.
The Australian Dollar (AUD) pivoted the 0.9200 level as AUD/JPY buying offset the USD strength. Support at 0.9180 was solid on the downside and Euro weakness saw fresh EUR/AUD lows under 1.4800. Sentiment towards the AUD is decidedly bullish and some analysts are beginning to talk about Parity again as the USD/CAD approaches the major level. Overall the AUD/USD traded with a low of 0.9178 and a high of 0.9236 before closing the US session at 0.9210.
Oil & Gold (XAU) was well supported on the sovereign debt risk posed by Greece. Overall trading with a low of USD$1117 and high of USD$1130 before ending the New York session at USD$1127 an ounce. Crude Oil fell back as profits were taken on the recent rally. Crude Oil was down $0.73 ending the New York session at $82.20.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3531 |
1.3587 |
1.3605 |
1.3818 |
1.3839 |
|
USD/JPY |
89.27 |
89.63 |
90.35 |
90.80 |
91.09 |
|
GBP/USD |
1.4979 |
1.5209 |
1.5240 |
1.5382 |
1.5477 |
|
AUD/USD |
0.9096 |
0.9174 |
0.9200 |
0.9252 |
0.9280 |
|
XAU/USD |
1108.00 |
1118 |
1125.00 |
1133 |
1144.00 |
|
OIL/USD |
78.00 |
80 |
82.10 |
83.2 |
85.00 |
Euro – 1.3605
Initial support at 1.3587 (Mar 15 low) followed by 1.3531 (Mar 11 low). Initial resistance is now located at 1.3818 (Feb 9 high) followed by 1.3839 (Feb 4 high)
Yen – 90.35
Initial support is located at 89.63 (Mar 16 low) followed by 89.27 (Mar 9 low). Initial resistance is now at 90.80 (Mar 16 high) followed by 91.09 (Mar 12 high).
Pound – 1.5240
Initial support at 1.5209 (Mar 17 low) followed by 1.4979 (Mar 16 low). Initial resistance is now at 1.5382 (Mar 17 high) followed by 1.5477 (Feb 24 low).
Australian Dollar – 0.9200
Initial support at 0.9174 (Mar 17 low) followed by the 0.9096 (Mar 15 low). Initial resistance is now at 0.9252 (Mar 17 high) followed by 0.9280 (Jan 18 high).
Gold – 1125
Initial support at 1118 (Mar 18 low) followed by 1108 (Mar 16). Initial resistance is now at 1133 (Mar 18 high) followed by 1144 (Mar 3 high).
Oil – 82.10
Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 83.20 (Intraday Resistance) followed by 85.00 (March High).
Yen Weakness Accelerates
Last week’s currency trading review
The Dollar gave up ground against most currencies as investor sentiment remained 'risk on' due to a combination of strong US data and easing Greece fears. February Retail Sales jumped 0.3% and was doubly impressive given the fact that many thought bad weather would keep shoppers at home. Also released, January Trade Balance which improved to -37bn vs. -40bn forecast. The Euro was buoyed by the improvements in the Greece situation with support now seen in the event of an economic emergency coming from neighboring countries. Also helping the rebound was record shorting of the Euro which inspired short covering on Friday. The EUR/USD gained +1.07% closing at 1.3768, after opening the week at 1.3621.
The Japanese Yen solid selling was seen against all pairs as the USD/JPY tested Y91 and GBP/JPY and EUR/JPY continued to recover off 9 month lows. Yen selling is being attributed to strong risk appetite and rumors that more BOJ easing set to be announced at this weeks BOJ meeting. The USD/JPY gained +0.29% closing at 90.54, after opening at 90.28 previously. The GBP tracked the Euro higher to close above the 1.5200 resistance. GBP/JPY buying underpinned for most of the week and helped overshadow weak economic data. January's Trade balance weakened to -8bn vs. -6.9bn forecast and January Manufacturing Production shrank -0.9% vs. 0.3% forecast. GBP/USD gained +0.45% closing at 1.5205 after opening at 1.5136. The AUD ground higher against the USD and Yen but lost ground against most of the other majors with Gold under pressure and concerns about Chinese tightening hitting the commodity exporter. February Employment change was 0.4k vs. 15k forecast. February Job Ad's however jumped 19% m/m. The AUD/USD gained +0.81% closing at 0.9150 after opening at 0.9076.
The forex trading week preview
In the States; On Monday, Jan TICS flows previously at 63.3bn. Also released, Feb Industrial Production is forecast at 0% vs. 0.9% previously. On Tuesday. FOMC rate Decision forecast to remain at 0.25% although traders will be paying attention to any change in the language of the accompanying statement. On Wednesday, February PPI is forecast at 5.1% vs. 4.6% previously y/y. On Thursday, February CPI is forecast at 0.1% vs. 0.2% previously. Also released, Weekly Jobless Claims are forecast at 450k vs. 462k previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Monday, Q4 EU Employment previously -0.5% Q/Q. On Tuesday, March German ZEW is forecast at 43.5 vs. 45.1 previously. On Wednesday, ECB Weber Speaks. On Thursday, January Trade Balance is forecast at 5.5bn vs. 7.0bn previously. On Friday, German PPI is forecast at 0.1% vs. 0.8% m/m. In the UK; On Wednesday, BOE minutes released. Also released, February Claimant Change is forecast at 6.0k vs 23.5 k previously. On Thursday, February Public Borrowing is forecast at 14bn vs. 4.3bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Wednesday, BOJ Rate meeting forecast to hold at 0.1% but with speculation the BOJ may expand some of emergency support measures currently in place. In Australia; On Tuesday, RBA March Meeting Minutes released. On Wednesday, RBA Deputy Governor Debelle speaks. 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 |
1.3531 |
1.3621 |
1.3760 |
1.3839 |
1.3903 |
|
USD/JPY |
88.14 |
89.63 |
90.65 |
91.09 |
91.29 |
|
GBP/USD |
1.4873 |
1.4947 |
1.5170 |
1.5218 |
1.5317 |
|
AUD/USD |
0.9056 |
0.9111 |
0.9170 |
0.9211 |
0.9243 |
|
XAU/USD |
1094.00 |
1098 |
1104.00 |
1128 |
1144.00 |
|
OIL/USD |
78.00 |
80 |
80.90 |
83.2 |
85.00 |
Euro – 1.3760
Initial support at 1.3621 (Mar 11 low) followed by 1.3531 (Mar 5 low). Initial resistance is now located at 1.3839 (Mar 9 high) followed by 1.3903 (Feb 4 high)
Yen – 90.65
Initial support is located at 89.63 (Mar 9 low) followed by 88.14 (Mar 4 low). Initial resistance is now at 91.09 (Mar 12 high) followed by 91.29 (Feb 23 high).
Pound – 1.5170
Initial support at 1.4947 (Mar 11 low) followed by 1.4873 (Mar 10 low). Initial resistance is now at 1.5218 (Mar 12 high) followed by 1.5317 (Feb 26 low).
Australian Dollar – 0.9170
Initial support at 0.9111 (Mar 11 low) followed by the 0.9056 (Mar 4 low). Initial resistance is now at 0.9211 (Jan 20 high) followed by 0.9243 (Jan 20 high).
Gold – 1104
Initial support at 1098 (Mar 12 low) followed by 1094 (0.5 of 1044.85-1144.98). Initial resistance is now at 1128 (Mar 10 high) followed by 1144 (Mar 3 high).
Oil – 80.90
Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 83.20 (March High 2010) followed by 85.00 (Intraday Resistance).
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