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Strong US GDP data provides support to the Dollar, as market confidence re-assures risky bets. Heavy data day for US with Core PCE, and Japan se to release CPI, Household Spending and Industrial Production CURRENCY TRADING SUMMARY – 30 MARCH 07 (23:30GMT)
- U.S. Dollar Trading (USD) was mixed over night with GDP data showing that the US economy may be more resilient than initially thought adding to the notion that interest rates may remain unchanged in the mean time. In other news, The U.S. government said it remains committed to pursuing a diplomatic resolution of tension in the Middle East, in result investors are more confident that geopolitical tensions between Iran and the United States will not escalate. Further more, Minneapolis Federal Reserve President Gary Stern on Thursday echoed Bernanke's moderately hawkish tone, saying the U.S. economy is anything but fragile and that the worst of the housing market crunch might be over. In US share markets, the NASDAQ rose by 0.78 points (0.03%) whilst the Dow Jones rose by 48.39 points (0.39%). Crude Oil rose on Thursday by US$0.26 a barrel to US$66.29. Looking ahead, Friday proves to be a heavy data day for the US with the release of Core PCE (Forecast: 0.2%, Previous: 0.3%) and Chicago PMI (Forecast: 49.5, Previous 47.9). Finally, Chairman Bernanke is once again scheduled to speak today.
- The Euro (EUR) traded in a narrow range before ending slightly lower on the back of the stronger US GDP. Overall, the Euro traded with a range of a low 1.3302 and a high of 1.3354 before closing the day at 1.3333 in the New York session. Looking ahead the Euro zone is scheduled for a heavy data day with the release of the CPI (Forecast: 1.9%, Previous: 1.8%), Unemployment (Forecast: 7.3%, Previous: 7.4%) as well as Consumer Confidence (Forecast: -4, Previous: -5)
- The Japanese Yen (JPY) took a tumble against the Dollar, on the back of strong US economic growth. With more confidence in equity markets, and the political tensions in the Middle-East, the Yen has returned to funding risky carry trades. Overall, the JPY traded with a range of a low 116.67 and a high 118.09 before closing the day at 117.98 in the New York session. Looking ahead, a heavy data day is expected out of Japan, starting with the release of both Nationwide CPI (Forecast: -0.1%, and the Previous: 0.0%) and the Tokyo CPI (Previous: 0.0%). Furthermore, Unemployment rate is also due for release with markets expecting an unchanged figure 4% for the month of February. Household Spending is also released with a figure of 0.5% expected down on the previous 0.6%. Finally, Industrial Production is also due for release (Forecast: -0.9%, Previous: -1.7%).
- The Sterling (GBP) traded in a tight range to end slightly lower against the USD. Earlier Sterling rose after data showing a surge in retail sales and an unexpectedly big rise in British mortgage lending offset a negative impact from the previous session's figures on a record British current account deficit and a dovish house price survey. Overall, the GBP traded with a low of 1.9614 and a high of 1.9658 before closing 1.9621 in the New York session.
- The Australian Dollar (AUD) remained steady trading on technical with little economic data out. Overall the AUD traded with a low 0.8050 and a high of 0.8101 before closing the day at 0.8065 in the New York session. Focus now shifts to next week for the Aussie dollar with key focus on the RBA interest rate decision on Wednesday.
- The South African Rand (ZAR) gained support from better-than-expected South African consumer and producer inflation data over the last two days, the rand would now eye credit and trade figures due out on Friday for further direction. The ZAR traded with a low of 7.2756 and a high of 7.3435
- Gold (XAU) fell today despite higher oil prices. Gold dropped by US$5.20 an ounce to US$661.60
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3187 | 1.3252 | 1.3325 | 1.3377 | 1.3412 | | USD/JPY | 116.25 | 116.37 | 117.85 | 118.44 | 118.50 | | GBP/USD | 1.9431 | 1.9555 | 1.9620 | 1.9728 | 1.9749 | | AUD/USD | 0.8000 | 0.8027 | 0.8060 | 0.8110 | 0.8212 | | XAU/USD | 646.20 | 652.40 | 662.95 | 669.69 | 677.75 | | | | | | |
Initial support at 1.3252 (March 26 low) followed by 1.3187 (Former resistance of Mar 7 low). Initial resistance is now located at 1.3365 (March 27 high) followed by 1.3412 (Mar 22) Initial support is located at 116.37 (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 – 0.8060
Initial support a 0.8027 (March 26 low) followed by 0.8000 (Mar 19 low). Initial resistance is now at 0.8110 (Mar 27 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 669.69 (Mar 28 high) followed by 677.75 (Feb 28 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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