CURRENCY TRADING SUMMARY –22 MARCH 07 (23:30GMT)
- U.S. Dollar Trading (USD) weakened against a basket of currencies. With the FOMC interest rate decision left unchanged at 5.25%. Although this was largely expected by economists it was dovish comments post announcement that generated Dollar weakness. With the removal of the word ‘firming’, statements indicated that the Fed had accepted the slowing of the US Economy and could possibly address a rate cut as early their next meeting. In US share markets, the NASDAQ rose by 47.71 points (1.98%) whilst the Dow Jones also rose by 159.42 (1.30%). Crude Oil also rose by US$0.43 a barrel to US$60.04. Looking ahead initial jobless claims will be mad pubic with markets expecting a figure 323k higher then the previous 318k.
- The Euro (EUR) strengthened against the USD reaching two year highs, on the back of dovish comments made by the Federal Reserve in yesterdays interest rate announcement. It was the Euro that enjoyed the rally more than any other currency as the market expects more EZ interest rate hikes this year from the current 3.75%. Overall, the Euro traded with a range of a low 1.3291 and a high of 1.3390 before closing at 1.3383 in the
New York
- The Japanese Yen (JPY) was the least volatile currency on the back of Fed interest rate announcement. Overall the JPY traded with a low of 117.15 and a high of 117.95 before closing at 117.59. Looking ahead the Trade balance out of
Japan
- The Sterling (GBP) added to previous day gains despite the publication of the BoE MPC minutes revealing an 8 to 1 vote at the previous meeting to keep interest rate unchanged. Overall, the GBP traded with a range of a low 1.9565 and a high of 1.9692 before closing the day 1.9676 in the
New York
- The Australian Dollar (AUD) continues to look bullish, as Fed reserve comments indicated a possible rate cut whilst speculation circles a RBA hike in the near term. Overall, the AUD traded with a range of a low 0.8002 and a high 0.8080 before closing the New York session at 0.8079 (near day highs).
- The Turkish Lira (TRY) saw Turkish stocks rise on strong stock hike in the
US
- Gold (XAU) rose by US$1.00 to US$660.00 an ounce, before rising a further US$2.40 of market.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3187 | 1.3270 | 1.3395 | 1.3412 | 1.3481 |
| USD/JPY | 116.51 | 117.16 | 117.45 | 118.04 | 118.50 |
| GBP/USD | 1.9431 | 1.9555 | 1.9685 | 1.9694 | 1.9749 |
| AUD/USD | 0.7876 | 0.7943 | 0.8065 | 0.8085 | 0.8100 |
| XAU/USD | 646.20 | 652.40 | 664.50 | 664.25 | 667.61 |
- Euro 1.3395
Initial support at 1.3270 (Mar 20 reaction low) followed by 1.3187 (Former resistance of Mar 7 low). Initial resistance is now located at 1.3412 (1.2865+(0.618 of 1.2483 – 1.3368) followed by 1.3481 (Mar 11, 2005 reaction high)
- Yen 117.45
Initial support is located at 117.16 (Mar 21 low) followed by 116.51 (Mar 16 low). Initial resistance is now at 118.04 (Mar 20 high) followed by 118.50 (Mar 12 high)
- Pound – 1.9685
Initial support at 1.9555 (Mar 21 reaction low) followed by 1.9431 (Mar 20 low). Initial resistance is now at 1.9694 (Mar 21 high) followed by 1.9749 (Feb 2 reaction high)
- Australian Dollar – 0.8065
Initial support a 0.7943 (Mar 19 low) followed by 0.7876 (Mar 16 low). Initial resistance is now at 0.8085 (Mar 21 trend high) followed by 0.8100 (psychological round number)
- Gold – 664.50
Initial support at 652.40 (Mar 19 low) followed by 646.20 (Mar 16 low). Initial resistance is now at 664.25 (Mar 2 high) followed by 667.61 (61.8% retracement of the 689.00 to 633.00 decline)
