US Housing Rebounds, Equities rally
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) stayed range bound for most of the day but ended on a weak footing as stocks ended at month highs. Construction stocks soared as February Housing Stocks rallied 22% to 583K vs. 450K forecast. PPI (Feb) gained 0.2% vs. 0.1% forecast. Oil found ongoing support as it trades close to the $50 a barrel level. Crude Oil closed up $1.81 ending the New York session at $49.16 per barrel. In US share markets, the Nasdaq was up 58 points or 4.4% whilst the Dow Jones rose 178 points or 2.48%. Looking ahead, CPI (Feb) are forecast to rise 0.4%. Q4 Current Account is forecast at -137Bn vs. -174Bn previously. Also the FOMC meet today and are expected to remain on hold although the statement may contain clues as to further stimulus plans.
European Euro
The Euro (EUR) closed above 1.3000 as the market consolidated the recent strength and EUR/JPY grinded higher tracking the Stock market. Some focus on ECB stark with bullish comments that the rate cutting cycle may be at an end and that a 0% rate policy may do more harm then good. German Zew Current conditions (March) at -89 was slightly better than -90 forecast. Overall the EUR/USD traded with a low of 1.2933 and a high of 1.3040 before closing the day at 1.3020. Looking ahead, ECB President Trichet speaks.
Japanese Yen (JPY)
The Japanese Yen (JPY) continued to be under pressure as the increase in risk appetite spilled over into Yen selling. USD/JPY traded towards 99 although gains were limited by Dollar weakness. AUD/JPY and EUR/JPY led the crosses higher. Overall the USDJPY traded with a low of 98.20 and a high of 98.99 before closing the day around 98.80 in the New York session. Looking ahead, BOJ meet today and will possibly discuss further steps to support the economy.
Pound Sterling (GBP)
The Sterling (GBP) traded under 1.4000 briefly as the markets sold the pound on news in the Financial Times that the UK may lose another 1 Million jobs. Speculation that the BoE will begin buying Bonds also adding to bearish mood in Early Europe. Buoyant stocks finally won the battle and pair finished roughly where it began. Overall the GBP/USD traded with a low of 1.3966 and a high of 1.4137 before closing the day at 1.4040 in the New York session. Looking ahead, January ILO is forecast at 6.5% vs. 6.3% currently. Also MPC minutes are released forecast at 9-0.
Australian Dollar (AUD)
The Australian Dollar (AUD) broke above 0.6600, running up to the resistance at 0.6640 before running out of steam. AUD is supported by stronger commodities and is taking full advantage of the recent improvement in investor confidence to build a base at the 0.6300 level. Overall the AUD/USD traded with a low of 0.6548 and a high of 0.6640 before closing the US session at 0.6590.
Gold
Gold (XAU) pulled back as safe haven demand slipped. Overall trading with a low of USD$912 and high of USD$924 before ending the New York session at USD$915 an ounce.
Technical Analysis: US Housing Rebounds
Euro (EUR)
Euro – 1.3040 : Initial support at 1.2834 (Mar 16 low) followed by 1.2733 (Mar 12 low). Initial resistance is now located at 1.3093 (Feb 9 high) at followed by 1.3179 (Jan 29 high)
Yen (JPY)
Yen – 98.20 : Initial support is located at 97.14 (Mar 13 low) followed by 95.67 (Mar 12 low). Initial resistance is now at 99.19 (Mar 9 high) followed by 99.68 (Mar 5 high).
Pound Sterling (GBP)
Pound – 1.4065 : Initial support at 1.3864 (Mar 13 low) followed by 1.3703 (Mar 12 low). Initial resistance is now at 1.4229 (Mar 16 high) followed by 1.4305 (Mar 6 high).
Australian Dollar (AUD)
Australian Dollar – 0.6625 : Initial support at 0.6513 (Mar 13 low) followed by the 0.6402 (Mar 11 low). Initial resistance is now at 0.6643 (Feb 13 high) followed by 0.6799 (Feb 10 high).
Gold (XAU)
Gold – 915 : Initial support at 906 (Mar 12 low) followed by 889 (Mar 2 low). Initial resistance is now at 944 (Mar 6 high) followed by 958 (Mar 2 high).
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