Stocks Under pressure on Global Recession fears
23/02/09
last week’s currency trading review
The Dollar was mixed against the majors with USD strength on the back of risk aversion being countered by concerns of quantitative easing and possible nationalization of banks. Housing starts plummeted to 25 year lows at 0.47m vs. 0.53m forecast. The FOMC minutes contained the usual gloom reports and CPI dropped to 0%y/y during January. Weekly Jobless claims remained high at 627K. The Euro came under pressure due to mounting concerns about eastern European Banks. German ZEW Economic sentiment improved to -5.8 vs. -26.5 forecast. January PMI’s continued to fall dropping to 33.6 vs. 34 in Manufacturing and 38.9 vs. 42/6 previously for services. The EUR/USD fell -0.27% closing at 1.2862, after opening the week at 1.2942. The Japanese Yen showed signs of losing its safe haven status as extreme stock weakness did little to stop the weakness the pound experienced during the week. The main cause the shocking -12% annualized GDP recorded for the Q4. The BoJ also met and downgraded the economic outlook for the 6th month in a row. The USD/JPY gained 1.49% closing at 93.31 after opening at 91.92. The GBP gained slightly against the USD but more significantly against the JPY and EUR as the market continued to support the pound. January CPI increased to 3.0% y/y vs. 2.6% forecast. January Retail Sales continued to defy gravity gaining 0.7% vs. 0.0% forecast. The GBP/USD gained 0.49% closing at 1.4422 after opening at 1.4352. The AUD held up well considering the large falls in stocks. The lack of AUD/JPY selling helped the pair to remain very well supported with dips being bought below 0.6400. Q4 Retail Sales came in at 0.8% vs. 1.0% forecast. The AUD/USD closed down -1.78% at 0.6450 after opening at 0.6565.
The forex trading week preview
In the States Tuesday kicks off the data releases with Richmond Fed Survey forecast at -46 vs. -49 previously. On Wednesday we have January Existing Home sales forecast to raise to 4.8m vs. 4.74m previously. On Thursday, January Durable Goods Orders are forecast to fall -2.5% vs. -2.6% previously. On Friday Q4 GDP is forecast to be downgraded to -5.4% vs. -3.8% initially recorded. Also released Chicago PMI forecast to remain unchanged 33.3. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone German IFO Business climate is released on Tuesday and is forecast to remain at 83. IFO Current Conditions is forecast to fall to 84.8 vs. 86.8 previously. On Wednesday we have the Q4 German GDP forecast to at -2.1% vs. -0.5% previously. On Thursday we have German CPI forecast at 0.3% vs. -0.5%. On Friday, Eurozone CPI y/y forecast at 1.1%. In the UK On Wednesday Revised Q4 GDP forecast at -1.6% vs. -1.5% initially. On Thursday Nationwide HPI forecast -1.2% vs. -1.3%. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Wednesday, January Trade Balance forecast at -0.49T vs. -0.21T previously. On Friday we have Nationwide CPI forecast at -0.1% vs. 0.0%. January Retail Sales forecast are -3.1% y/y vs. -2.7% y/y previously. We will provide our previews and reviews of these data releases in the daily summary.
In Australia light data week with Q4 Capex forecast at -3.0% vs. 0.6% previously. We will provide our previews and reviews of these data releases in the daily summary.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2423 |
1.2513 |
1.2815 |
1.2885 |
1.2891 |
|
USD/JPY |
92.09 |
92.52 |
93.55 |
94.47 |
94.64 |
|
GBP/USD |
1.3929 |
1.4052 |
1.4395 |
1.4471 |
1.4605 |
|
AUD/USD |
0.6249 |
0.6333 |
0.6450 |
0.6532 |
0.6577 |
|
XAU/USD |
940.75 |
961.50 |
993.00 |
1032.00 |
1068.00 |
·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 – 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 – 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 – 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 – 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).
