ECB keep interest rates on hold as Trichet hints at a June hike. AUD reaches 16 year highs on the back of a 31 year low Unemployment rate. CURRENCY TRADING SUMMARY – 13 APRIL 07 (23:30GMT)
- U.S. Dollar Trading (USD) fell against most other majors on Thursday with little data released to the public as investors avoided long positions ahead of the G7 meeting of finance ministers this weekend. In other news Fed reserve member Moskow indicated that the US economy was in a steady state yet failed to give support to the USD. In US share markets, the NASDAQ rose by 21.01 points (+0.85%) whilst the Dow Jones was also up by a further 68.34 points (+0.55%). Crude oil rose by US$1.84 a barrel to US$63.81. Looking ahead, further indication of US economy stagflation is expected with a widening to -60 bln trade balance (Previous: -59.1 bln) and softer growth of PPI at 0.2% (Previous: 0.4%) for the month of February and March respectively. .
- The Euro (EUR) saw the ECB keep interest rates unchanged as expected at 3.75%, with reasonably hawkish comments President Trichet, who signaled the central bank was likely to raise rates in June or beyond to prevent acceleration on inflation. As a result the Euro reached two year highs against the USD. Overall the Euro traded with a range of a low 1.3430 and a high of 1.3505 before closing the day at 1.3481 in the New York session. Looking ahead, the Industrial Production for the Eurozone is set for release today with market expectations at 0.4% stronger than the previous -0.2%
- The Japanese Yen (JPY) strengthened by 0.2% against the USD. Whilst the EURJPY reached afresh record high of 160.87 on Thursday. Overall the USDJPY traded with a range a low 118.80 and a high of 119.52 before closing the 119.06 in the New York session.
- The Sterling (GBP) strengthened on the back of a broadly weaker dollar. UK trade balance widened to 6.8 billion. Overall, GBP traded with a low of 1.9728 and a high of 1.9812 before closing the day 1.9781 in the New York session.
- The Australian Dollar (AUD) continues to find demand with a firm figure of 4.5% Unemployment Rate (Previous: 4.6%) giving further cause to a RBA interest rate hike early May. The figure of 4.5% is the lowest level seen in 31 years. Overall the Aud traded in range of a low 0.8235 and a high of 0.8292 before closing near day highs at 0.8288 in the New York session.
- Gold (XAU) traded in a narrow range for much of Wednesday to end relatively unchanged. Gold rose by US$1.50 an ounce to $681.20.
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3339 | 1.3407 | 1.3490 | 1.3506 | 1.3582 | | USD/JPY | 118.43 | 118.74 | 119.05 | 119.55 | 120.00 | | GBP/USD | 1.9591 | 1.9709 | 1.9795 | 1.9823 | 1.9917 | | AUD/USD | 0.8064 | 0.8233 | 0.8310 | 0.8376 | 0.8385 | | XAU/USD | 663.85 | 670.63 | 677.60 | 681.51 | 682.82 | | | | | | |
Initial support at 1.3407 (Apr 11 low) followed by 1.3339 (Apr 9 low). Initial resistance is now located at 1.3506 (Apr 12 high) followed by 1.3582 (Jan 3, 2005 high) Initial support is located at 118.74 (Apr 10 low) followed by 118.43 (Mar 5 low). Initial resistance is now at 119.55 (Apr 11 high) followed by 120.00 (Psychological round number resistance) Initial support at 1.9709 (Apr 11 low) followed by 1.9591 (Apr 9 low). Initial resistance is now at 1.9823 (Apr 3 high) followed by 1.9917 (Jan 23 trend high) - Australian Dollar – 0.8310
Initial support a 0.8233 (April 11 low) followed by 0.8150 (Apr 9 low). Initial resistance is now at 0.8376 (Apr open + Mar range *0.618) followed by 0.8385 (Oct 1, 1990 high) number) Initial support at 663.85 (Apr 4 low) followed by 652.40 (Mar 19 low). Initial resistance is now at 681.51 (Apr 10 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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