Japanese Yen strengthens by 3.5% to reach an eleven week high against the USD. Non-Manufacturing ISM set for release out of the US. CURRENCY TRADING SUMMARY – 05 MARCH 07 (23:30GMT)
- U.S. Dollar Trading (USD) was mixed against all other majors. In terms of economic releases the final Michigan Sentiment index for the month of February came in less than expected with a figure of 91.3 with markets expecting a figure of 93.5. In US share markets, the NASDAQ dropped by 36.21 points (-1.5%) whilst the Dow Jones also dropped by a further 120.24 points (-0.98%). Crude Oil fell on Friday by US$0.70 a barrel to US$61.30 on the back of investors severing positions in the commodities market. Looking ahead, Non-manufacturing ISM will begin the week of data for the US with expectations at 57.0 down on the previous 59.0.
- The Euro (EUR) remained steady on Friday against the USD, with PPI coming in as expected at 0.1%. Overall the Euro traded within a range of a low 1.3142 and a high of 1.3202 before closing the day at 1.3190 in the New York session. Looking ahead, Services PMI for the Eurozone may cause some interest throughout the day with expectations at 57.7 slightly down on the previous 57.9.
- The Japanese Yen (JPY) continued to strengthen against the Dollar reaching an eleven week high as falling stock prices and a slowing US economy led to investors to continue unwinding carry trades financed by the borrowing of the low interest bearing Japanese currency. To end the week the JPY strengthened by 3.5% against the USD, the biggest weekly gain in 14 months. The yen hit its high for the day after St. Louis Fed President William Poole said he saw nothing disruptive in carry trades, or bets on high-yielding currencies and other assets financed by borrowing in the Japanese currency. Overall, the JPY traded within a range of a low 116.42 and a high of 117.83 before closing the week day at 116.77 in the New York session.
- The Sterling (GBP) continued to slide against most majors reaching 2.5 month lows against the Yen and Euro, buckling under pressure from investors unwinding long positions in relatively high yielding currencies. Overall, the GBP traded within a range of a low 1.9414 and a high of 1.9587 before closing the day at 1.9434. Looking ahead Services PMI is set for release with market expectations at 59.5 slightly higher than the previous 59.2.
- The Australian Dollar (AUD) continued to slide against the USD suffering from the unwinding of carry trades, with the AUD being a high yielding currency. Overall the AUD traded within a low of 0.7817 and a high of 0.7863 before closing 0.7822 in the New York session.
- Gold (XAU) continued to slide dropping by a further US$21.00 an ounce to trade at US$644.10 as risk-averse investors looked to minimize their exposure.
- The Czech Crown (CZK) Czech central bank board member Vladimir Tomsik urged the government to avoid proposing any specific target date for Euro adoption before committing itself to a clear agenda for economic reforms. The crown firmed 0.3% to a one-week high around 28.14 per Euro, paring its loses since hitting lifetime highs in late December to 2.6%
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3079 | 1.3101 | 1.3175 | 1.3261 | 1.3298 | | USD/JPY | 116.26 | 116.42 | 115.85 | 118.98 | 120.77 | | GBP/USD | 1.9402 | 1.9412 | 1.9295 | 1.9679 | 1.9751 | | AUD/USD | 0.7784 | 0.7799 | 0.7785 | 0.7896 | 0.7948 | | XAU/USD | 648.00 | 656.40 | 643.00 | 689.00 | 694.70 |
Initial support at 1.3101 (Feb 23 low) followed by 1.3079 (Feb 22 corrective low). Initial resistance is now located at 1.3261 (Feb 27 high) followed by 1.3298 (Jan 2 reaction high). Initial support is located at 116.42 (Mar 2 low) followed by 116.26 (0.764 of 114.43 to 122.20 rise). Initial resistance is now at 118.98 (Feb 16 high) followed by 120.77 (Feb 27 high) Initial support at 1.9412 (Mar 2 low) followed by 1.9402 (Feb 13 low). Initial resistance is now at 1.9679 (Feb 15 high) followed by 1.9751 (61.8% of 1.9917-1.9482, 1.9479 is Feb 2 high) - Australian Dollar – 0.7785
Initial support at 0.7799 (61.8% retracement of 0.7707 – 0.7948 rally) followed by 0.7784(Feb 14 low). Initial resistance is now at 0.7896 (Feb 28 high) followed by 0.7948 (Feb 27 high). Initial support at 656.40 (Feb 20 low) followed by 648.00 (Feb 8 low). Initial resistance is now at 689.0 (Feb 23 trend high) followed by 694.70 (May 18 reaction high) Forex trading involves substantial risk of loss, and may not be suitable for everyone. 
Click here to visit Easy-Forex.com
+
)
|
