Currency Updates:
U.S. Dollar Trading (USD) the positive market reaction seen after the Greece debt deal was announced in Asia failed to extend in the European and US sessions as profit takers used the 3 year highs to cash out of the recent rally. The bulls were disappointed and this leaves the door open for a larger pullback with the downside likely to be tested.
The Euro (EUR) the continued failure 1.3300 is leaving the recent range in place with the Greece resolution unable to provide enough inspiration to break higher. The outlook is mixed with the US economy picking up and recession in the Austerity hit Eurozone expected for 2012 creating more reasons for Euro shorts while risk appetite and stock market rallies help lift the single currency. In US stocks, DJIA +15 points closing at 12965, S&P +1 points closing at 1348 and NASDAQ -3 points closing at 2948. Looking ahead, January Existing Home Sales at 4.65mln vs. 4.61mln previously.
The Japanese Yen (JPY) the USD/JPY is moving closer to the Y80 level as the Yen struggles even in the risk off trading environment as sentiment towards the safe haven sours sharply. The outlook for a break of the Y80 level is for more gains towards Y82 quickly and then Y85 and Y90 medium term. The lack of pullback in this move higher has been noted in many analysts’ reports.
The Sterling (GBP) fell back when the Euro swooned in the US session with selling on rallies dominating since Monday. The outlook is mixed with the recent rally stalling and we will look to stock markets going forward for further inspiration.
Australian Dollar (AUD) the AUD/USD moved back to lower after the high on the back of the Greece news 1.0750 held twice. The pullback in US stocks prompted another search for support on the bottom end of the range near 1.0650. Looking ahead, MPC Rate Hike forecast at 0-9-0 for all holding. Interesting to see the MPC support for the QE expansion however.
Oil & Gold (XAU) Gold soared bucking the trend of other markets to push towards $1763 year highs stopping at $1760 in the US close. OIL/USD is relentlessly higher up above $106 as Iran tensions reach new heights.
