Profit taking weighs on Markets
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) the USD gained some traction yesterday as the market took profit from multi month highs on concerns that not all is well with US banks. George Soros also weighed in and commented that the banking system was insolvent. US stocks came off around 1% with Banks off 5%. Crude Oil closed down $1.46 ending the New York session at $51.05 per barrel. In US share markets, the Nasdaq was down -15 points or 0.93% whilst the Dow Jones was up 41 points or -0.52%. Looking ahead, Feb Consumer Credit is forecast at -1Bn vs. 1.8Bn previously.
European Euro
The Euro (EUR) fell back heavily after being well supported in the Asian session. Weak stocks and comments from ECB’s Smaghi about FX intervention the main drag. Also weighing Feb Retail Sales down -0.6% vs. -0.4% previously. Overall the EUR/USD traded with a low of 1.3323 and a high of 1.3581 before closing at 1.3340. Looking ahead, Q4 GDP forecast at -1.5% vs. -0.2% previously.
Japanese Yen (JPY)
The Japanese Yen (JPY) can under extreme pressure with the Yen weakness led by USD/JPY buying. Most the of the crosses reached new year highs with the GBP/JPY scaling 150 for the first time since November. Overall the USDJPY traded with a low of 100.42 and a high of 101.43 before closing the day around 100.80 in the New York session. Looking ahead, BOJ meet and are expected to hold at 0.1% although focus will be on any further measures to support the market.
Pound Sterling (GBP)
The Sterling (GBP) a successful HSBC bank rights issue underpinned the GBP but heavy Euro losses eventually dragged the pair lower. GBP/JPY provided support in the Asian session before profit taking in the US. The 1.5000 level is still fresh in traders minds and may be tested if stocks can continue to recover. Overall the GBP/USD traded with a low of 1.4655 and a high of 1.4957 before closing the day at 1.4700 in the New York session. Looking ahead, Feb Industrial Output forecast at -1.2% vs. -2.6% previously.
Australian Dollar (AUD)
The Australian Dollar (AUD) tracked the other majors lower but remained supported ahead of today’s RBA announcement. The market is split as to whether the easing cycle continues or another pauses. Overall the AUD/USD traded with a low of 0.7059 and a high of 0.7229 before closing the US session at 0.7166. Looking ahead, RBA Rate Decision forecast to remain at 3.25%.
Gold
Gold (XAU) continued to make new lows as buyers wait for better levels as the price eases. Overall trading with a low of USD$865 and high of USD$893 before ending the New York session at USD$880 an ounce.
Technical Analysis: Market Took Profit From Multi Month Highs
Euro (EUR)
Euro – 1.3345 : Initial support at 1.3224 (Apr 3 low) followed by 1.3113 (Mar 30 low). Initial resistance is now located at 1.3592 (Mar 27 high) at followed by 1.3678 (Mar 24 high)
Yen (JPY)
Yen – 100.50 : Initial support is located at 99.35 (Apr 3 low) followed by 98.23 (Apr 1 low). Initial resistance is now at 102.41 (Oct 20 high) followed by 102.41 (Oct 20 high).
Pound Sterling (GBP)
Pound – 1.4670 : Initial support at 1.4649 (Apr 3 low) followed by 1.4450 (Apr 2 low). Initial resistance is now at 1.4986 (Feb 9 high) followed by 1.5154 (Jan 12 high).
Australian Dollar (AUD)
Australian Dollar – 0.7080 : Initial support at 0.7059 (Apr 3 low) followed by the 0.6976 (Apr 2 low). Initial resistance is now at 0.7268 (Jan 7 high) followed by 0.7355 (Oct 7 high).
Gold (XAU)
Gold – 871 : Initial support at 852 (Jan 23 low) followed by 843 (Jan 23 low). Initial resistance is now at 909 (Apr 1 high) followed by 945 (Mar 26 high).
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