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Eurozone Retail Sales weaker-than-expected. RBA make announcement on Australian interest rates as G7 summit gets closer. CURRENCY TRADING SUMMARY – 07 FEBRUARY 07 (23:30GMT)
- U.S. Dollar Trading (USD) fell against all other majors on Tuesday, largely due to the fact that Fed Reserve Chairman Bernanke made no mention regarding interest rates in his speech on economic well being. In other news, quiet trading dominated the US share markets, with the NASDAQ up 0.89points (0.04%) and the Dow Jones also up 4.57points (0.04%). Crude Oil rose last night by US$0.34 to $US59.08 a barrel. Looking ahead in what is a quiet week with reference to economic data out of the US, today sees the release of Unit Labor Costs for the fourth quarter with market expectations at 2.10% higher than the previous 2.30%.
- The Euro (EUR) rose by 0.3% against the Dollar despite softer than expected Retail Sales coming out of the Eurozone at 0.3% (forecast: 1.1%, previous: 0.5%). Overall, the Euro traded with a low of 1.2913 to a high of 1.2991 before closing at 1.2978 in the New York session. Looking ahead, little data is due out of the Euro zone with only German Industrial Production (December) holding some importance. Economists are predicting a figure of 0.5% down on the previous 1.8% for the month of November. In other news, the G7 summit beginning on Friday the 9th of February continues to hold key importance to the Euro zone in regards to Yen weakness.
- The Japanese Yen (JPY) rose against the USD and the Euro reaching three week highs following Treasury Secretary Henry Paulson stating that the currency value is set by market fundamentals, suggesting that the U.S. government sees no problem with the Yens weakness. Market trends saw investors hold off selling the currency in anticipation of discussions on the weakness in the upcoming G7 meeting. Overall the USDJPY traded with a low of 119.96 and a high of 120.58 before closing at 120.09 in the New York session.
- The Sterling (GBP) strengthened following previous day depreciations against the USD. Overall the GBP traded with a low of 1.9591 to high of 1.9722 before closing at 1.9703 in the New York session. Looking ahead the UK industrial output is scheduled for release with forecasts at 0.10% whilst previous was at 0.50%. Furthermore, manufacturing output is also set for release with market expectations at 0.10% lower than the previous 0.30%.
- The Australian Dollar (AUD) awaits the RBA interest rate announcement with expectation for it to remain unchanged at 6.25%. The AUD traded within a range of a low 0.7742 and a high of 0.7781 before closing at 0.7778 in the New York session. UPDATE: interest rates at 6.25% (unchanged).
- Gold (XAU) rose today on the back of an upward drift in energy prices. Gold rose by $1.40 an ounce to $657.50
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.2865 | 1.2876 | 1.2985 | 1.2992 | 1.3074 | | USD/JPY | 119.90 | 119.96 | 120.05 | 121.37 | 121.75 | | GBP/USD | 1.9536 | 1.9588 | 1.9715 | 1.9751 | 1.9833 | | AUD/USD | 0.7631 | 0.7697 | 0.7780 | 0.7790 | 0.7821 | | XAU/USD | 641.10 | 643.50 | 653.35 | 661.30 | 676.35 |
Initial support at 1.2876 (Jan 26 low) followed by 1.2865 (Jan 12 reaction low). Initial resistance is now located at 1.2992 (Feb 6 high) followed by 1.3074 (Feb 2 high) Initial support is located at 119.96 (Feb 6 low) followed by 119.90 (former resistance from Oct 13, 2006). Initial resistance is now at 121.37 (Feb 2 high) followed by 121.75 (Jan 31 high) Initial support at 1.9588 (Feb 6 low) followed by 1.9536 (Feb 5 low). Initial resistance is now at 1.9751 (61.8% retracement 1.9917 to 1.9482 is Feb 2 high) followed by 1.9833 (Jan 24 high) - Australian Dollar – 0.7780
Initial support at 0.7697 (50% retracement of the 0.7414 -0.7982 and Jan 31 low) followed by 0.7631 (61.8% retracement of the 0.7414 – 0.7982 rally). Initial resistance is now at 0.7790 (38.2% retracement of the 0.7940 to 0.7697 decline) followed by 0.7821 (Jan 25 high). Initial support at 643.50 (Feb 2 low) followed by 641.10 (Jan 26 low). Initial resistance is now at 661.3 (Feb 1 trend high) followed by 676.35 (Jul 17 reaction high) Forex trading involves substantial risk of loss, and may not be suitable for everyone. 
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| This article provides an overview of the factors affecting the the leading currency pair: Euro-Dollar exchange, commonly expressed as EUR/USD. The Euro to Dollar exchange rate is the
price at which the world demand for US Dollar equals the world supply for Euro. Regardless of geographical origin, a rise in the world demand for Euros leads to an appreciation of the Euro. |
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Technical analysis is built on three essential principles:
1. Market action discounts everything This means that the actual price is a reflection of everything that is known to the market that could affect it, for example,
supply and demand, political factors and market sentiment. The pure technical analyst is only concerned with price movements, not with the reasons for any changes.
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