Equity Markets Rebound
16/03/09
last week’s currency trading review
The Dollar weakened considerable as stock markets around the world rebounded sharply and risk sentiment improved considerably. Data was on the back burner with Retail Sales the main focus slightly better than forecast at -0.1% vs. -0.5% expected. Also showing some improvement the Trade balance falling to -36Bn in January. The Euro ended much stronger at EUR/JPY broke higher and the Dollar weakened. German Industrial Production showed another slump down -7.5% on the back of German Factory orders down -8% in January. The EUR/USD gained 2.14% closing at 1.2926, after opening the week at 1.2650. The Japanese Yen experienced some volatility as USD weakness induced USD/JPY to fall heavily to 95 Yen before buoyant stocks saw the pair recover to the more comfortable 98 level. The USD/JPY fell -0.23% closing at 98.04 after opening at 98.27. The GBP had another round of extreme weakness with the market finally taking a dim view of the quantitative easing and EUR/GBP had another run higher. The GBP/USD fell -0.77% closing at 1.3985 after opening at 1.4094. The AUD followed the Euro and broke above solid resistance at 0.6550 to finish on an extremely strong footing. Underpinning the move higher was Oil which rallied over 10% and AUD/JPY which hit month highs on improved investor confidence. Unemployment data was also much stronger than expected at +1.5K vs. -20K forecast February Employment Change. The Unemployment Rate jumped to 5.2% vs. 4.8% previously though. The AUD/USD closed up 2.69% at 0.6580 after opening at 0.6403.
The forex trading week preview
In the States Monday TIC flows for January previously at 74Bn and February Industrial Production is forecast at -1.3% vs. -1.8% previously. On Tuesday February Housing starts are forecast at 0.45M vs. 0.466M January. Also released PPI (Feb) forecast at 0.3% vs. 0.8%. On Wednesday CPI (Feb) is seen flat 0.0% vs. 0.0% previously. Also on Wednesday the FOMC decision widely believed to remain at 0.25% with more focus on the supporting statement. On Thursday weekly jobless claims are expected to remain high 650K vs. 654K. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone Monday we see the Feb CPI forecast at 1.2%y/y vs. 1.1%y/y previously. On Tuesday the German Zew Survey is forecast at -7.7 vs. -5.8. The only other data of note is the German PPI (Feb) forecast at -0.2% vs. -1.2% previously and Industrial Production (Feb) forecast at -3.8% vs. -2.6% previously. In the UK light data week with the NPC minutes the biggest risk event on Wednesday with the market expecting 9-0 cut decision and more details about Quantitative Easing going forward. Also on Wednesday Claimant Count change is forecast at 84.5K vs. 73.8K previously. On Thursday, CBI Industrial Orders are forecast at -55 vs. -56 previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan The BOJ Meeting this week on Wednesday is the main event with the market not expecting any more rate cuts but still very interested in the Press Conference. Any mention of Quantitative easing may cause the Yen to come under pressure especially after the Swiss moves last week. We will provide our previews and reviews of these data releases in the daily summary.
In Australia RBA minutes from the monetary policy meeting are expected on Tuesday. Also on Thursday we have RBA Assistant Governor Eddy Speaking. 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 |
1.2617 |
1.2733 |
1.2925 |
1.2992 |
1.3093 |
|
USD/JPY |
94.63 |
95.67 |
98.00 |
98.85 |
99.19 |
|
GBP/USD |
1.3657 |
1.3703 |
1.4000 |
1.4070 |
1.4183 |
|
AUD/USD |
0.6307 |
0.6402 |
0.6575 |
0.6643 |
0.6799 |
|
XAU/USD |
889.00 |
905.00 |
927.00 |
944.00 |
958.50 |
·Euro – 1.2925
Initial support at 1.2733 (Mar 12 low) followed by 1.2617 (Mar 11 low). Initial resistance is now located at 1.2992 (Mar 13 high) at followed by 1.3093 (Feb 9 high)
·Yen – 98.00
Initial support is located at 95.67 (Mar 12 low) followed by 94.63 (Jan 6 resistance). Initial resistance is now at 98.85 (Mar 11 high) followed by 99.19 (Mar 9 high).
·Pound – 1.4000
Initial support at 1.3703 (Mar 12 low) followed by 1.3657 (Mar 11 low). Initial resistance is now at 1.4070 (Mar 13 high) followed by 1.4183 (Mar 9 high).
·Australian Dollar – 0.6575
Initial support at 0.6402 (Mar 11 low) followed by the 0.6307 (Mar 9 low). Initial resistance is now at 0.6643 (Feb 13 high) followed by 0.6799 (Feb 10 high).
·Gold – 927
Initial support at 905 (Mar 12 low) followed by 889 (Mar 2 low). Initial resistance is now at 944 (Mar 6 high) followed by 958 (Mar 2 high).
