Bernanke vows to keep rates low
CURRENCY TRADING SUMMARY – 25th February (00:30GMT)
U.S. Dollar Trading (USD) was strong as sentiment remained weak in the Asian and European sessions before Bernanke’s speech. The Fed Chief was dovish as expected reiterating that he expects conditions to warrant keeping rates low for an extended period of time, Discount rate hike does not signal policy outlook change. In US stocks DJIA +91 points closing at 10374, S& P +10 points closing at 10105 and NASDAQ +22 points closing at 2235. Looking ahead, Weekly Jobless Claims are forecast at 455k vs. 473k previously.
The Euro (EUR) was quite restrained as support at 1.3500 held but the negative sentiment remained. The Bernanke’s fueled rebound found resistance above 1.3600 and the pair eased back to middle of the range. December Industrial Orders soared 0.8% vs. -1% forecast. Overall the EUR/USD traded with a low of 1.3501 and a high of 1.3628 before closing at 1.3540. Looking ahead, February Unemployment rate is forecast to remain at 8.2%.
The Japanese Yen (JPY) pivoted the Y90 level but support was quite strong below the Key level and the pair finished unchanged on the day. Bernanke’s speech while bad for the USD helped to lift stocks and crosses. Overall the USDJPY traded with a low of 89.75 and a high of 90.38 before closing the day around 90.25 in the New York session.
The Sterling (GBP) was on the back foot all day as MPC Member Posen stated that the door is open for more QE if the economy deteriorates. The pair was left out of the rebound and sentiment towards the pair is decidedly bearish. Overall the GBP/USD traded with a low of 1.5385 and a high of 1.5479 before closing the day at 1.5410 in the New York session. Looking ahead, BOE Governor King Speaks.
The Australian Dollar (AUD) broke through support at 0.8880 as gold slumped but the market was able to recover quite well later in the day. Q4 Wage Price Index gained 0.6% vs. 0.8% previously. AUD/JPY also broke through Y80 but this was short lived and the pair found good buyers. Overall the AUD/USD traded with a low of 0.8856 and a high of 0.8958 before closing the US session at 0.8930. UPDATE Q4 CAPEX +5.5% vs. 1.5% forecast.
Oil & Gold (XAU) broke through the key $1100 support and remained weak for the rest of the day. Overall trading with a low of USD$1089 and high of USD$1108 before ending the New York session at USD$1098 an ounce. Crude Oil was able to rebound as the sentiment remains strong. Crude Oil was down +$1.30 ending the New York session at $80.20.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3444 |
1.3497 |
1.3525 |
1.3692 |
1.3788 |
|
USD/JPY |
89.72 |
89.77 |
90.25 |
91.29 |
92.15 |
|
GBP/USD |
1.5357 |
1.5387 |
1.5400 |
1.5575 |
1.5688 |
|
AUD/USD |
0.8786 |
0.8849 |
0.8945 |
0.9071 |
0.9147 |
|
XAU/USD |
1071.00 |
1078 |
1099.00 |
1121 |
1131.00 |
|
OIL/USD |
78.50 |
80.00 |
80.30 |
81.50 |
82.00 |
Euro – 1.3525
Initial support at 1.3497 (Feb 23 low) followed by 1.3444 (Feb 19 low). Initial resistance is now located at 1.3692 (Feb 23 high) followed by 1.3788 (Feb 17 high)
Yen – 90.25
Initial support is located at 89.77 (Feb 24 low) followed by 89.72 (Feb 16 low). Initial resistance is now at 91.29 (Feb 23 high) followed by 92.15 (Feb 19 high).
Pound – 1.5400
Initial support at 1.5387 (Feb 24 low) followed by 1.5357 (Feb 19 low). Initial resistance is now at 1.5575 (Feb 23 high) followed by 1.5688 (Feb 18 low).
Australian Dollar – 0.8945
Initial support at 0.8849 (Feb 15 low) followed by the 0.8786 (Feb 12 low). Initial resistance is now at 0.9071 (Feb 23 high) followed by 0.9147 (Jan 21 high).
Gold – 1099
Initial support at 1078 (Feb 12 low) followed by 1071 (Feb 11 low). Initial resistance is now at 1121 (Feb 23 high) followed by 1131 (Feb 22 high).
Oil – 80.30
Initial support at 80.00 (Intraday Support) followed by 78.50 (Intraday Support). Initial resistance is now at 81.50 (Intraday Resistance) followed by 82.00 (Intraday Resistance).
