Gold trades above $1000 an ounce
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) had a very volatile day with rumors of imminent nationalization of large US banks sending US stocks to a new year low. Reports also surfaced that US Quantitative easing would begin as soon as this week. These two rumors sent the Dollar plummeting. January CPI came in at 0.3% vs. 0.2% forecast. Crude Oil closed down $0.54 ending the New York session at $39.20 per barrel. In US share markets, the Nasdaq was down -1.59% or -0.11 points whilst the Dow Jones gained 1.34% or -100 points.
European Euro
The Euro (EUR) rallied hard as the market soured on the USD given the above stories. Concerns about Eastern European debt remain and a response from the EMU is expected this week. Eurozone PMI’s dipped to new lows with Feb Services dropping to 38.9 and Manufacturing to 33.6. Overall the EUR/USD traded with a low of 1.2558 and a high of 1.2884 before closing the day at 1.2848. Looking ahead, ECB President Trichet Speaks.
Japanese Yen (JPY)
The Japanese Yen (JPY) found strength as the USD/JPY crashed lower on banking concerns and fresh stock weakness. Crosses were well supported by their respective majors. The Yen has been struggling to maintain its status as a safe haven with the market worried about the deteriorating Japanese economy. Overall the USDJPY traded with a low of 92.52 and a high of 94.38 before closing the day around 93.06 in the New York session.
Pound Sterling (GBP)
The Sterling (GBP) tracked the Euro, recovering from early weakness to bounce from 1.42 to test 1.45. Trading was very volatile with the denial of the banking nationalization plan helping to pare gains. January Retail Sales continued to surprise up 0.7% vs. -0.1% forecast. Overall the GBP/USD traded with a low of 1.4152 and a high of 1.4484 before closing the day at 1.4452 in the New York session.
Australian Dollar (AUD)
The Australian Dollar (AUD) came under extreme pressure trading to support at .6350 before bouncing as the Euro rocketed higher. Risk aversion capped gains ahead of 0.6500. RBA Governor Spoke of his belief that the Australian economy is well placed relatively to other countries. Overall the AUD/USD traded with a low of 0.6498 and a high of 0.6355 before closing the US session at 0.6475.
Gold
Gold (XAU) broke above $1000 briefly as USD weakness reached its height. Overall trading with a low of USD$970 and high of USD$1006 before ending the New York session at USD$993 an ounce.
Technical Analysis: Rumors Sent The Dollar Plummeting
Euro (EUR)
Euro – 1.2815 : Initial support at 1.2513 (Feb 18 low) followed by 1.2423 (Nov 21 low). Initial resistance is now located at 1.2884 (Feb 20 low) at followed by 1.2891 (Feb 16 high)
Yen (JPY)
Yen – 93.55 : Initial support is located at 92.52 (Feb 20 low) followed by 92.09 (Feb 18 low). Initial resistance is now at 94.47 (Feb 18 high) followed by 94.64 (Jan 6 high).
Pound Sterling (GBP)
Pound – 1.4395 : Initial support at 1.4052 (Feb 2 low) followed by 1.3929 (Jan 27 low). Initial resistance is now at 1.4484 (Feb 20 high) followed by 1.4605 (Feb 13 High).
Australian Dollar (AUD)
Australian Dollar – 0.6450 : Initial support at 0.6333 (Feb 18 low) followed by the 0.6249 (Feb 2 low). Initial resistance is now at 0.6532 (Feb 17 high) followed by 0.6577 (Feb 16 high).
Gold (XAU)
Gold – 993 : Initial support at 961.50 (Feb 13 low) followed by 940 (Feb 17 low). Initial resistance is now at 1032 (Mar 17 high) followed by 1068 (Fibonacci Projection).
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