Greece Issues Still Linger
Last week’s currency trading review
The Dollar gained strength from two sources through the week. Euro weakness kept the dollar well supported as the biggest currency pair in market reacted to ongoing Greece fears and China raised bank reserve ratios. The other source of strength was the speech from Bernanke outlining measures the FED will take to prepare the market for tightening later in the year. Economic data was mixed with the January Trade Balance weakening to -40bn vs. -35bn forecast being countered by strong January Retail sales at 0.5% vs. 0.4% previously. The Euro continued to fall after staging a midweek rally on hopes that a EU backed bailout would take the pressure off Greece. The announcement from the EU summit failed to outline any specific help and the market once again tested the downside for support. Adding to the Bearish outlook was the weaker than expected EU Q4 GDP at 0.1% vs. 0.4% forecast. The EUR/USD fell -0.32% closing at 1.3633, after opening the week at 1.3677.
The Japanese Yen ending the week on the back foot as stock markets lifted off lows and USD/JPY pushed through the key Y90 level. EUR/JPY was very volatile trading through the Y122-124 levels as Euro flipped around. Yen weakness was pared on Friday after the Chinese Bank reserve ratio was hiked 0.5%. The USD/JPY gained +0.81 % closing at 89.97 after opening the week at 89.24. The GBP was able to end slightly higher on improved risk appetite and GBP/JPY buying. Also helping to cap losses was support from EUR/GBP selling. On the data front the Inflation report and Governor King’s speech on Wednesday was dovish as expected but the sellers found good buyers below 1.5600. GBP/USD gained +0.33% closing at 1.5692 after opening at 1.5640. The AUD staged a major rally as the oversold risk currency bounced back on stronger stocks and stellar Jobs data. January Employment rose +52k vs. +15k forecast and the Unemployment rate dropped to 5.3% vs. 5.6%. The AUD/USD gained +2.33% closing at 0.8890 after opening at 0.8683.
The forex trading week preview
In the States On Monday, President’s Day Bank holiday. On Tuesday, December Long Term TICS Flows forecast at 50bn vs. 126bn previously. On Wednesday, FED minutes released from the Jan 27 meeting. Also released, January Housing Starts are forecast at 0.58m vs. 0.56m previously. On Thursday, Weekly Jobless claims are forecast at 445k vs. 440k previously. On Friday, January CPI is forecast at 2.8% y/y vs. 2.7% previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Tuesday, German February ZEW forecast at 41.0 vs. 47.2 previously. On Friday, February German PMI is forecast at 53.9 vs. 53.7 previously. In the UK On Tuesday, January CPI is forecast at 3.6% vs. 2.9% previously. On Wednesday, BoE Minutes released. On Friday, January Retail Sales are forecast at 1.0% vs. 2.1% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Monday, Q4 GDP forecast at 0.9% vs. 0.3% previously. On Thursday, BOJ Rate meeting forecast to remain at 0.1%. In Australia On Tuesday, RBA February meeting minutes are released. On Friday, RBA Governor Stevens testifies before government. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3423 |
1.3531 |
1.3610 |
1.3801 |
1.3839 |
|
USD/JPY |
88.83 |
89.15 |
90.05 |
90.55 |
91.08 |
|
GBP/USD |
1.5536 |
1.5560 |
1.5670 |
1.5776 |
1.5888 |
|
AUD/USD |
0.8710 |
0.8750 |
0.8875 |
0.8921 |
0.8962 |
|
XAU/USD |
1061.00 |
1071 |
1094.00 |
1097 |
1103.00 |
|
OIL/USD |
70.00 |
72.50 |
74.20 |
75.00 |
77.00 |
Euro – 1.3610
Initial support at 1.3531 (May 19 low) followed by 1.3424 (May 18 low). Initial resistance is now located at 1.3801 (Feb 11 high) followed by 1.3839 (Feb 9 high)
Yen – 90.05
Initial support is located at 89.15 (Feb 8 low) followed by 88.83 (Feb 5 low). Initial resistance is now at 90.55 (0.382 of 93.77-88.56) followed by 91.08 (Feb 4 high).
Pound – 1.5670
Initial support at 1.5560 (Feb 11 low) followed by 1.5536 (Feb 8 low). Initial resistance is now at 1.5776 (Feb 5 high) followed by 1.5888 (0.382 of 1.6458-1.5536).
Australian Dollar – 0.8875
Initial support at 0.8750 (Feb 11 low) followed by the 0.8710 (Feb 10 low). Initial resistance is now at 0.8921 (Feb 2 high) followed by 0.8962 (Jan 29 high).
Gold – 1094
Initial support at 1071 (Feb 8 low) followed by 1061 (Feb 8 low). Initial resistance is now at 1097 (Feb 11 high) followed by 1103 (0.500 of 1161.80-1044.85).
Oil – 74.20
Initial support at 72.50 (Intraday Support) followed by 70.00 (Intraday Support). Initial resistance is now at 75.00 (Intraday Resistance) followed by 77.00 (Intraday Resistance).
