Greece Austerity Budget goes to the Vote
U.S. Dollar Trading (USD) the market sentiment improved on the Greece announcement that there had been an agreement between the EU/IMF and a new Austerity budget to be now voted on over the weekend. Weekly Jobless Claims fell to 358k and is another solid release adding to the improving jobs argument. The Euro (EUR) the EUR/USD traded at fresh highs briefly above 1.3300 on the back of the Greece breakthrough and ECB President Draghi comments that there were tentative signs of stabilization to economic outlook. In US stocks, DJIA +6 points closing at 12890, S&P +2 points closing at 1352 and NASDAQ +11 points closing at 2927. Looking ahead, January German CPI forecast at -0.4%m/m. Later we have February Michigan Consumer Sentiment at 74.5 vs. 75 previously.
The Japanese Yen (JPY) the rally moved into its 5th day overnight grinding to Y77.50 with the US jobs inspiring the latest move higher. EUR/JPY extended to above Y103 for fresh 2012 highs as the recovery continued. The Sterling (GBP) range traded above the 1.5800 hitting day highs in Europe with the BOE holding rates at 0.5% and increasing the asset purchase program to 325bn to help improve ‘weak near-term growth’. Australian Dollar (AUD) underperformed with the market unable to make fresh daily highs and closing back under the 1.0800 level. The RBA quarterly statement remained cautious on the outlook with downgrades to 2013 growth and inflation targets. Looking ahead, January PPI forecast at 0.1% vs. -0.1% previously.
Oil & Gold (XAU) Gold rallied to $1750 but failed for a second time this week and is threatening a more substantial pullback. OIL/USD tested $100 and although did not break above closed just under the big level.
Pairs to watch
EUR/USD finding strong above resistance at 1.3300
XAU/USD to test support?
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3026 |
1.3089 |
1.3270 |
1.3335 |
1.3386 |
|
USD/JPY |
76.49 |
76.75 |
77.60 |
77.42 |
77.82 |
|
GBP/USD |
1.5730 |
1.5789 |
1.5805 |
1.5947 |
1.6096 |
|
AUD/USD |
1.0672 |
1.0702 |
1.0730 |
1.0880 |
1.1007 |
|
XAU/USD |
1702.00 |
1710 |
1731 |
1763 |
1786 |
|
OIL/USD |
97.00
|
98.50 |
99.40 |
100.00 |
101.00 |
Greece Austerity Budget goes to the Vote
U.S. Dollar Trading (USD) the market sentiment improved on the Greece announcement that there had been an agreement between the EU/IMF and a new Austerity budget to be now voted on over the weekend. Weekly Jobless Claims fell to 358k and is another solid release adding to the improving jobs argument. The Euro (EUR) the EUR/USD traded at fresh highs briefly above 1.3300 on the back of the Greece breakthrough and ECB President Draghi comments that there were tentative signs of stabilization to economic outlook. In US stocks, DJIA +6 points closing at 12890, S&P +2 points closing at 1352 and NASDAQ +11 points closing at 2927. Looking ahead, January German CPI forecast at -0.4%m/m. Later we have February Michigan Consumer Sentiment at 74.5 vs. 75 previously.
The Japanese Yen (JPY) the rally moved into its 5th day overnight grinding to Y77.50 with the US jobs inspiring the latest move higher. EUR/JPY extended to above Y103 for fresh 2012 highs as the recovery continued. The Sterling (GBP) range traded above the 1.5800 hitting day highs in Europe with the BOE holding rates at 0.5% and increasing the asset purchase program to 325bn to help improve ‘weak near-term growth’. Australian Dollar (AUD) underperformed with the market unable to make fresh daily highs and closing back under the 1.0800 level. The RBA quarterly statement remained cautious on the outlook with downgrades to 2013 growth and inflation targets. Looking ahead, January PPI forecast at 0.1% vs. -0.1% previously.
Oil & Gold (XAU) Gold rallied to $1750 but failed for a second time this week and is threatening a more substantial pullback. OIL/USD tested $100 and although did not break above closed just under the big level.
Pairs to watch
EUR/USD finding strong above resistance at 1.3300
XAU/USD to test support?
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3026 |
1.3089 |
1.3270 |
1.3335 |
1.3386 |
|
USD/JPY |
76.49 |
76.75 |
77.60 |
77.42 |
77.82 |
|
GBP/USD |
1.5730 |
1.5789 |
1.5805 |
1.5947 |
1.6096 |
|
AUD/USD |
1.0672 |
1.0702 |
1.0730 |
1.0880 |
1.1007 |
|
XAU/USD |
1702.00 |
1710 |
1731 |
1763 |
1786 |
|
OIL/USD |
97.00
|
98.50 |
99.40 |
100.00 |
101.00 |
French Downgrade Sparks Euro Sell off
Last week’s currency trading review
The Dollar was strong on the back of fresh Eurozone concerns with any attempts to rally being sold into and more bad news emerging daily. On Friday night S&P downgraded multiple European countries including France which lost its AAA rating. Data wise we saw a few negative misses which hampered the US stocks attempt to rally even as the debt crisis rolled on. Weekly jobless claims spiked to 399k vs. 375k previously. Consumer Sentiment improved though to 74 vs. 69.9 previously. The Euro was the main mover in the FX market with the S&P downgrades and Greece bailout jitters causing a broad sell off. EUR/AUD fell to all-time lows under 1.2300 and EUR/JPY fell to fresh 12 year lows at Y97. The outlook is still negative and only oversold technical helping to support. The EUR/USD is down -0.33% currently at 1.2676, after opening the week at 1.2712.
The Japanese Yen remained strong in the risk off market led by the EUR/JPY selling. AUD/JPY is the only exception with the strong support seen for the commodities and stocks helping to reverse most dips and the pair closed above Y79. USD/JPY is in a tight range and waiting for either US data to rally or EUR/JPY selling to push the major lower. The USD/JPY is down -0.03% currently at 76.94, after opening at 76.96. The GBP tracked the Euro broadly but was able to finish on a strong note on Friday as the EUR/GBP reversed to 0.8250 supports. The BOE held at 0.5% and kept the asset purchase program at 275b. The GBP/USD is down -0.69% currently at 1.5319 after opening at 1.5425. The AUD was able to decouple form the EUR/USD selling to rally on the back of strong stocks and gold. EUR/AUD extended all-time lows pushing down to 1.2250 and is showing no signs of reversing just yet. Traders are getting caught short as the usual correlation with the EUR/USD breaking down and instead trading the view the Aussie is an Asian currency. The AUD/USD is up +0.91% currently at 1.0320 after opening at 1.0226.
The Forex Trading Economic Data Ahead Preview
In the States; ON Tuesday, Bank of Canada Rate decision forecast to hold at 1.00%. On Wednesday, December Industrial Production forecast at 0.5% vs. -0.2% previously. On Thursday, December CPI forecast at 3.1% vs. 3.4% y/y previously. Weekly Jobless Claims are 389k vs. 399k previously. On Friday, December Existing Home Sales forecast at 5.2% vs. 4 % previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Tuesday, January German Survey forecast at -49.8 vs. -53.8 previously. In the UK, On Tuesday, December CPI forecast at 4.2% vs. 4.8% previously y/y. On Wednesday December Weekly Jobless Claims are forecast at 8k vs. 3k previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Thursday, November Industrial Production previously at -4.0% y/y. In Australia; On Thursday, NZD Q4 CPI forecast at 0.4% vs. 0.4% previously. Also December Unemployment Rate forecast at 5.3%. December employment change forecast at 10k vs. -6k previously. Un 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 |
1.2588 |
1.2644 |
1.2645 |
1.2879 |
1.3080 |
|
USD/JPY |
76.00 |
76.58 |
76.80 |
77.74 |
78.98 |
|
GBP/USD |
1.5125 |
1.5272 |
1.5315 |
1.5410 |
1.5501 |
|
AUD/USD |
1.0044 |
1.0229 |
1.0280 |
1.0387 |
1.0567 |
|
XAU/USD |
1605.00 |
1630 |
1638 |
1662 |
1677 |
|
OIL/USD |
97.50
|
99.00 |
99.90 |
100.00 |
101.00 |
Euro – 1.2645
Initial support at 1.2644 (Sept 10 2010 low) followed by 1.2588 (Aug 24 2010 low). Initial resistance is now located at 1.2879 (Jan 13 high) followed by 1.3080 (Dec 28 high)
Yen – 76.80
Initial support is located at 76.58 (Nov 18 low) followed by 76.00 (Big Figure). Initial resistance is now at 77.74 (Dec 30 high) followed by 78.98 (Nov 1 high).
Pound – 1.5315
Initial support at 1.5272 (Aug 6 low) followed by 1.5125 (Jul 21 2010 low). Initial resistance is now at 1.5410 (Jan 6 high) followed by 1.5501 (Jan 10 high).
Australian Dollar – 1.0280
Initial support at 1.0229 (Jan 10 low) followed by the 1.0044 (Dec 29 low). Initial resistance is now at 1.0387 (Jan 3 low) followed by 1.0567 (Mar 3 high).
Gold – 1638
Initial support at 1630 (Jan 11 low) followed by 1605 (Jan 9 low). Initial resistance is now at 1662 (50% retrace of 1802.93-1522.65) followed by 1677 (Dec 13 high).
Oil – 99.90
Initial support at 99.00 (Intraday Support) followed by 97.50 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 101.00 (Intraday Resistance).
Written by Anthony Darvall
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