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Strong US jobs data in the form of Unemployment rate and Non-farm payrolls adds to a strengthening of the greenback. BoJ scheduled for a rate announcement. CURRENCY TRADING SUMMARY – 10 APRIL 07 (23:30GMT)
- U.S. Dollar Trading (USD) ended last week sliding on Thursday ahead of the US jobs data, as many investors awaited the result to see if the Labour market had slowed, giving any further indication of an expected rate cut. With little data plenty of Dollar trading was technical where key resistance levels were broken ahead of Friday’s heavy slate. On Friday, although thin trading was present due many market holidays over the Easter break, Unemployment rate out of the US came in a little better than expected at 4.4% (Forecast: 4.6%, Previous: 4.5%), whilst the much anticipated Non-farm Payrolls surprised many with a strong figure of 180k showed an overall positive jobs data, which added to the notion that the US economy was in a better state than first thought. Hence, this caused the USD to strengthen against most other majors. With many markets closed on Monday for Easter, US share markets saw the NASDAQ end the day down 2.16 points (-0.087%) whilst the Dow Jones was up 8.94 points (0.071%) (Figures ending Monday 9th of April). Crude Oil also traded up on Monday by US$0.14 a barrel to US$61.65.
- The Euro (EUR) rose to a two-year high against the Green back ahead of US Jobs data. Reports suggested that EUR/USD was subject to technical trading ahead of Fridays NFP and US Unemployment rate, with analysts implying that large investment banks breaking the pair through key resistance levels of 1.3400 ahead of the data release. Overall the Euro fell from 1.3420 from the end of last week to close on Monday at 1.3360 in the New York session.
- The Japanese Yen (JPY) was subject to thin trading ahead of Friday’s jobs data. The JPY eased from last week’s 118.80 to 119.25 in Monday’s New York session. Looking ahead the BoJ begins the week with an interest rate announcement on Tuesday. Markets are largely confident that rates will remain unchanged.
- The Sterling (GBP) fell on Thursday following the BoE’s decision to keep interest rates unchanged at 5.25% as traders trimmed bets on how far rates will rise in the months ahead. Overall the GBP eased form last weeks high levels to end Monday trading at 1.9623 in the New York session. Looking ahead the BRC sales monitor may cause some interest to begin the week.
- The Australian Dollar (AUD) looked bullish to end the week with speculation rife that the RBA will look to hike rates in the next meeting. As a result the AUD tested key resistance levels of 0.8212 in the Asian session on Thursday. However following strong US data on Friday the Aussie dollar eased from 0.8185 to close at 0.8165 in the New York session on Monday.
- Gold (XAU) fell on Monday as a result of lower oil prices and a firmer US dollar. Gold fell by US$2.50 ounce to US$676.90.
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3288 | 1.3318 | 1.3380 | 1.3442 | 1.3481 | | USD/JPY | 117.20 | 118.43 | 119.05 | 119.51 | 120.00 | | GBP/USD | 1.9544 | 1.9636 | 1.9645 | 1.9723 | 1.9823 | | AUD/USD | 0.8036 | 0.8064 | 0.8195 | 0.8214 | 0.8300 | | XAU/USD | 652.40 | 663.85 | 673.45 | 675.50 | 682.82 | | | | | | |
Initial support at 1.3318 (Apr 4 low) followed by 1.3288 (Mar 30 low). Initial resistance is now located at 1.3442 (April 2 high) followed by 1.3481 (March 11 high, 2005 reaction high) Initial support is located at 118.43 (Apr 5 low) followed by 117.20 (Mar 30 low). Initial resistance is now at 119.51 (61.8% retracement of the 122.20 to 115.15 decline) followed by 120.00 (Psychological round number resistance) Initial support at 1.9636 (Apr 2 low) followed by 1.9544 (Mar 30 low). Initial resistance is now at 1.9723 (Apr 6 high) followed by 1.9823 (Apr 3 high) - Australian Dollar – 0.8195
Initial support a 0.8064 (April 4 low) followed by 0.8036 (Mar 28 low). Initial resistance is now at 0.8214 (Apr 5 trend high) followed by 0.8300 (Psychological round number) Initial support at 663.85 (Apr 4 low) followed by 652.40 (Mar 19 low). Initial resistance is now at 675.50 (Apr 4 high) followed by 682.82 (Trend-Line resistance) 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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