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Weak US New Home Sales data causes the Dollar to drop against all other majors. German IFO survey released out of the Eurozone. CURRENCY TRADING SUMMARY – 27 MARCH 07 (23:30GMT)
- U.S. Dollar Trading (USD) slipped against a basket of currencies on Monday as data showed that new home sales fell to an annual rate of 848k (lowest since June 2000, boosting expectations of a Fed interest rate cut) with the previous being revised lower at 882k. Analysts said data was quite a turnaround from expectations earlier in the session that the worst of the housing market slowdown was over. In US share markets, the NASDAQ rose 6.7 points (0.27%) whilst the Dow Jones fell by 11.94 (-0.09%). Crude Oil rose by US$0.63 a barrel to US$62.91 amid rising tension in the Gulf with Iran persistent in continuing their nuclear program as well has holding 15 British Navy personnel.
- The Euro (EUR) rallied against the Dollar on the back of poor housing data out of the US. The Euro rose 0.4% to once again break key levels at 1.3300. Overall the Euro traded with a range of a low 1.3254 and a high of 1.3347 before closing the day at 1.3347 in the New York session. Looking ahead, the German IFO is released today with the expectations that the figure come in relatively unchanged at 106.5 (Previous: 107)
- The Japanese Yen (JPY) rose by 0.1% against the Dollar on the back of a weaker Dollar. Overall, the JPY traded with a range of a low 117.64 and a high of 118.43 before closing at 118.07 in the New York session.
- The Sterling (GBP) rose across the board (USD, JPY and Euro) as investors’ appetite for risk was reinforced indications of future rate hikes by the BoE. Overall, the GBP traded with a range of a low 1.9585 and a high of 1.9722 before closing the day at 1.9697 in the New York session.
- The Australian Dollar (AUD) lifted to new decade highs on Monday. Overall, the AUD traded with a range of a low 0.8030 and a high of 0.8106 to close the day near day highs of 0.8103 in the New York session. Looking ahead, New Home sales is made public, with the previous figure coming in at 5.8%
- The Polish Zloty (PLN) was stable on Monday as investors awaited Wednesday’s rate decision and the monetary policy council’s statement for further direction. The Central bank is widely expected to keep rates unchanged, although recent hawkish comments by officials gave reason for a rate cut. The PLN traded with a range of a low 2.9000 and a high of 2.9184.
- Gold (XAU) with crude reaching a 2007 high above US$63 a barrel and growing geopolitical tensions in the Gulf, Gold jumped 1%, by US$6.60 an ounce to $663.90.
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3187 | 1.3242 | 1.3330 | 1.3349 | 1.3412 | | USD/JPY | 116.25 | 117.16 | 118.20 | 118.44 | 118.50 | | GBP/USD | 1.9431 | 1.9555 | 1.9685 | 1.9728 | 1.9749 | | AUD/USD | 0.7943 | 0.8000 | 0.8090 | 0.8109 | 0.8100 | | XAU/USD | 646.20 | 652.40 | 663.75 | 666.70 | 667.61 | | | | | | |
Initial support at 1.3242 (50% retracement of the 1.3072-1.3412 rally) followed by 1.3187 (Former resistance of Mar 7 low). Initial resistance is now located at 1.3349 (March 23 high) followed by 1.3412 (Mar 22) Initial support is located at 117.16 (Mar 21 low) followed by 116.25 (Mar 19 low). Initial resistance is now at 118.44 (Mar 26 high) followed by 118.50 (Mar 12 high) Initial support at 1.9555 (Mar 21 reaction low) followed by 1.9431 (Mar 20 low). Initial resistance is now at 1.9728 (Mar 22 high) followed by 1.9749 (Feb 2 reaction high) - Australian Dollar – 0.8090
Initial support a 0.8000 (Mar 21 low) followed by 0.7943 (Mar 19 low). Initial resistance is now at 0.8109 (Mar 26 trend high) followed by 0.8212 (Dec 2, 1996 reaction high) Initial support at 652.40 (Mar 19 low) followed by 646.20 (Mar 16 low). Initial resistance is now at 666.70 (Mar 22 high) followed by 667.61 (61.8% retracement of the 689.00 to 633.00 decline) 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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