S&P 500 at fresh 15 month Highs
CURRENCY TRADING SUMMARY – 12th March (00:30GMT)
U.S. Dollar Trading (USD) was strong in Asia on fears that China may start to tighten momentary policy soon as inflation picks up. US data was positive with January's Trade balance falling to -37bn vs. -41bn forecast. Weekly Jobless claims were 462k roughly as expected. In US stocks, DJIA +44 points closing at 10611, S&P +4 points closing at 1150 and NASDAQ +18 points closing at 2368. Looking ahead, February Retail Sales are forecast at -0.2% vs. +0.5% previously. Also released, March UoM Consumer Confidence is forecast at 73.6.
The Euro (EUR) continued to track higher as Greece fears subsided and EUR/JPY dragged the major higher. The Swiss National Bank held rates at 0.25% and continued to state that EUR/CHF intervention was necessary but the reaction from the market was muted with EUR/CHF edging only slightly higher. Overall the EUR/USD traded with a low of 1.3618 and a high of 1.3689 before closing at 1.3680. Looking ahead, January Industrial Production forecast at 0.7% vs. -1.7% previously.
The Japanese Yen (JPY) was weak as the market speculates further BOJ easing is on the way after the Government repeatedly expressed its wish for more action. USD/JPY tested the 90.80 region but failed to gain further traction. Overall the USDJPY traded with a low of 90.19 and a high of 90.77 before closing the day around 90.60 in the New York session.
The Sterling (GBP) broke back above the 1.5000 level as sentiment improved on global stock market gains. GBP/JPY rallied above the Y136 level and EUR/GBP fell below 0.9100. Heavy selling of the Pound in recent weeks makes the possibility of a relief rally with the Euro significant. Overall the GBP/USD traded with a low of 1.4945 and a high of 1.5090 before closing the day at 1.5080 in the New York session.
The Australian Dollar (AUD) February's Employment Change was weaker than expected at +0.5K vs. +15k forecast and 52k previously. Concerns over china also weighed in the Asian session but these were trumped by the positive investment sentiment throughout the European and US sessions. Overall the AUD/USD traded with a low of 0.9109 and a high of 0.9172 before closing the US session at 0.9160.
Oil & Gold (XAU) the $1100 level was tested in the US session before bouncing back to opening levels. Overall trading with a low of USD$1100 and high of USD$1112 before ending the New York session at USD$1109 an ounce. Crude Oil broke above the Key $82 resistance as the rally continued. Crude Oil was up $0.30 ending the New York session at $82.20.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3436 |
1.3531 |
1.3680 |
1.3705 |
1.3788 |
|
USD/JPY |
88.14 |
89.68 |
90.65 |
90.82 |
91.29 |
|
GBP/USD |
1.4784 |
1.4855 |
1.5070 |
1.5196 |
1.5317 |
|
AUD/USD |
0.8979 |
0.9056 |
0.9160 |
0.9211 |
0.9243 |
|
XAU/USD |
1088.00 |
1104 |
1109.00 |
1128 |
1144.00 |
|
OIL/USD |
78.00 |
80 |
82.20 |
82.50 |
85.00 |
Euro – 1.3680
Initial support at 1.3531 (Mar 5 low) followed by 1.3436 (Mar 2 low). Initial resistance is now located at 1.3705 (Mar 8 high) followed by 1.3788 (Feb 17 high)
Yen – 90.65
Initial support is located at 89.68 (Mar 9 low) followed by 88.14 (Mar 4 low). Initial resistance is now at 90.82 (Mar 10 high) followed by 91.29 (Feb 23 high).
Pound – 1.5070
Initial support at 1.4855 (Mar 2 low) followed by 1.4784 (Mar 2 low). Initial resistance is now at 1.5196 (Mar 8 high) followed by 1.5317 (Feb 26 low).
Australian Dollar – 0.9160
Initial support at 0.9056 (Mar 9 low) followed by the 0.8979 (Mar 4 low). Initial resistance is now at 0.9211 (Jan 20 high) followed by 0.9243 (Jan 20 high).
Gold – 1109
Initial support at 1104 (Feb 26 low) followed by 1088 (Feb 25 low). Initial resistance is now at 1128 (Mar 10 high) followed by 1144 (Mar 3 high).
Oil – 82.20
Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 82.50 (Intraday Resistance) followed by 85.00 (Intraday Resistance).
Global Stocks Resume Uptrend
Last week’s currency trading review
The Dollar remained on the back-foot as global stocks rallied and US data improved investor sentiment. The big news was the better than expected February Non Farm Payrolls at -36k vs. -56k forecast released on Friday which saw Global stocks rally to fresh 2010 highs. February Services PMI came in at 56.5 vs. 57.7 forecast whilst Manufacturing PMI was solid at 53 vs. 51 forecast. The Euro was beholden to the news flow relating to the Greece debt situation. Concerns early in the week pushed the pair to fresh lows under 1.3450 before good Greece bond auctions and political support from its European neighbors allowed the Euro to bounce. The ECB rate meeting saw the rate left at 1.0% as expected. January German Factory Orders surged 4.3% vs. 1.6% m/m forecast. The EUR/USD fell -0.03% closing at 1.3624, after opening the week at 1.3628.
The Japanese Yen the volatility continued with fresh lows seen on GBP/JPY and USD/JPY before direction dramatically reversed later in the week after the US jobs numbers. The Commodity Currencies did the best as gold and oil surged with CAD/JPY and AUD/JPY both gaining +3%. The GBP had a dramatic week with the first day of trading seeing a 400 pip drop on concerns that UK elections would see a hung parliament for the first time in decades. The rest of week saw the pair stage a solid rebound and closed just under where it opened but sentiment is fragile and the downside is still in focus. The BOE held at 0.5% and the Asset purchase Program was maintained at 200bn. On a positive note the February Services PMI surged to 58.4 vs. 54.5 previously. GBP/USD fell -0.66% closing at 1.5135 after opening at 1.5235. The AUD was supported on multiple fronts but the gains were quite contained given the news. The RBA raised rates to 4.00% and Q4 GDP was +0.9% Q/Q. Solid commodity rallies and strong risk appetite also underpinned the move higher. AUD/NZD broke above 1.3000 for the first time in over a decade. The AUD/USD gained +1.33% closing at 0.9076 after opening at 0.8955.
The forex trading week preview
In the States; On Thursday, January Trade Balance forecast at -41bn vs. -40.2bn previously. Also released, Weekly Jobless Claims forecast at 450k vs. 469l previously. On Friday, February Retail Sales are forecast at -0.2% vs. 0.5% previously. Also released, UoM Consumer Confidence forecast at 74 vs. 73.6 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Monday, German Industrial Production is forecast at 1.0% vs. 4.7% previously. On Wednesday, German CPI is forecast at 0.4% y/y. Also ECB President Trichet speaks. On Thursday, SNB 3-month Libor is forecast at to remain unchanged 0.25%. On Friday, January EU industrial Production is forecast at 0.7% vs. -1.7% m/m. In the UK; On Tuesday, January Trade Balance forecast at -3.05bn vs. -3.26bn previously. On Wednesday, January Manufacturing Production is forecast at 0.2% vs. 0.9% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Thursday, Q4 Final GDP is forecast at 1.0% vs. 1.1% initially. In Australia; On Wednesday, RBNZ is forecast to remain at 2.5%. On Thursday, February Employment change is forecast at 15k vs. 52k previously. The February Unemployment rate is forecast to remain at 5.3%. 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 |
1.3436 |
1.3552 |
1.3630 |
1.3736 |
1.3788 |
|
USD/JPY |
87.37 |
87.74 |
90.40 |
90.96 |
91.90 |
|
GBP/USD |
1.4855 |
1.4959 |
1.5130 |
1.5136 |
1.5209 |
|
AUD/USD |
0.8936 |
0.8979 |
0.9070 |
0.9086 |
0.9147 |
|
XAU/USD |
1111.00 |
1125 |
1135.00 |
1144 |
1161.00 |
|
OIL/USD |
78.00 |
80 |
81.80 |
82.00 |
82.50 |
Euro – 1.3630
Initial support at 1.3552 (Mar 4 low) followed by 1.3436 (Mar 2 low). Initial resistance is now located at 1.3736 (Mar 3 high) followed by 1.3788 (Feb 17 high)
Yen – 90.40
Initial support is located at 87.74 (Dec 10 low) followed by 87.37 (Dec 9 low). Initial resistance is now at 90.96 (0.5 of 93.77-88.14) followed by 91.90 (Feb 22 high).
Pound – 1.5130
Initial support at 1.4959 (Mar 3 low) followed by 1.4855 (Mar 2 low). Initial resistance is now at 1.5136 (Mar 4 high) followed by 1.5209 (Mar 1 low).
Australian Dollar – 0.9070
Initial support at 0.8979 (Mar 4 low) followed by the 0.8936 (Mar 1 low). Initial resistance is now at 0.9086 (Mar 3 high) followed by 0.9147 (Jan 21 high).
Gold – 1135
Initial support at 1125 (Mar 4 low) followed by 1111 (Mar 1 low). Initial resistance is now at 1144 (Mar 3 high) followed by 1161 (Jan 11 high).
Oil – 81.80
Initial support at 80.00 (Intraday Support) followed by 78.00 (Intraday Support). Initial resistance is now at 82.00 (Intraday Resistance) followed by 82.50 (Intraday Resistance).
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