Global Stock Rout Continues
CURRENCY TRADING SUMMARY – 3rd March 2009 (00:30GMT)
·U.S. Dollar Trading (USD) continued to find strength in adversity as investors flooded into the safe have with fresh 12 year lows in US stocks. The Dow broke 7000 and fell sharply to 6800. ISM Manufacturing gained slightly to 35.8 vs. 35.6 previously. Crude Oil closed down $4.61 ending the New York session at $40.15 per barrel. In US share markets, the Nasdaq was down -54 points or -3.99% whilst the Dow Jones fell -299 points or -4.24%. Looking ahead, January Pending Home Sales are forecast to fall -3% vs. +6.3% previously.
·The Euro (EUR) held to a tight range but was under pressure as risk aversion pushed the pair below 1.26. The lack of heavy EUR/JPY sales kept Euro losses to minimum. News over the weekend that the EU had rejected initial plans for a 180 billion bailout package for Eastern Europe did little to help sentiment. February Eurozone PMI Manufacturing was confirmed at 33.5 vs. 34.4 previously. Overall the EUR/USD traded with a low of 1.2540 and a high of 1.2662 before closing the day at 1.2560. Looking ahead, German January WPI forecast at -2% vs. -3% previously.
·The Japanese Yen (JPY) held the 97-98 range but strengthened against most currencies as the overwhelming stock market losses brought the old correlations back into play. GBP/JPY was the worst performer as investors bailed out of the pound. Overall the USDJPY traded with a low of 69.94 and a high of 97.90 before closing the day around 97.20 in the New York session.
·The Sterling (GBP) lost a lot of the support that had formed in previous weeks as HSBC reported a 17 Billion loss and initiated a capital raising effort. Mortgage data was extremely weak with January lending falling to 0.69Bn vs. 1.794Bn previously. Market attention now turns to BOE meeting on Thursday. Overall the GBP/USD traded with a low of 1.3961 and a high of 1.4288 before closing the day at 1.4060 in the New York session.
·The Australian Dollar (AUD) was weak as Asian stocks continued to fall and the key 0.6350 level gave way. Noted support under 0.6300 propped the pair for the rest of the day going into the RBA announcement Tuesday. Overall the AUD/USD traded with a low of 0.6290 and a high of 0.6385 before closing the US session at 0.6310. Looking ahead, January Retail Sales forecast at -0.6% vs. 3.8% previously. Also released, RBA Interest Rate Decision with the market mixed some looking for a pause holding at 3.25% whilst others hoping for 0.5% cut in anticipation negative GDP numbers on Wednesday.
·Gold (XAU) fresh weakness even as risk aversion soared showed the fickle nature of gold direction as demand for USD outpaced the precious metal. Overall trading with a low of USD$922 and high of USD$958 before ending the New York session at USD$926 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2425 |
1.2513 |
1.2560 |
1.2811 |
1.2997 |
|
USD/JPY |
94.63 |
96.36 |
97.40 |
99.47 |
99.92 |
|
GBP/USD |
1.3929 |
1.3959 |
1.4035 |
1.4384 |
1.4607 |
|
AUD/USD |
0.6249 |
0.6291 |
0.6295 |
0.6577 |
0.6643 |
|
XAU/USD |
911.00 |
922.00 |
925.00 |
978.00 |
995.00 |
·Euro – 1.2560
Initial support at 1.2513 (Feb 20 low) followed by 1.2425 (Nov 21 low). Initial resistance is now located at 1.2811 (Feb 26 low) at followed by 1.2899 (Feb 25 high)
·Yen – 97.40
Initial support is located at 96.36 (Feb 25 low) followed by 94.63 (Former Resistance). Initial resistance is now at 99.47 (Nov 10 reaction high) followed by 99.92 (Nov 5 high).
·Pound – 1.4035
Initial support at 1.3959 (Mar 2 low) followed by 1.3929 (Jan 27 low). Initial resistance is now at 1.4384 (Feb 26 high) followed by 1.4607 (Feb 25 high).
·Australian Dollar – 0.6295
Initial support at 0.6291 (Mar 2 low) followed by the 0.6249 (Feb 2 low). Initial resistance is now at 0.6577 (Feb 16 high) followed by 0.6643 (Feb 13 high).
·Gold – 925
Initial support at 922 (Mar 2 low) followed by 911 (Feb 11 low). Initial resistance is now at 978 (Feb 25 high) followed by 995 (Feb 24 high).
