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Record highs in equity markets provide does little for USD as further indications of slowing US economy in the shape of New Home Sales. RBNZ hike rates to 7.75% CURRENCY TRADING SUMMARY – 26 APRIL 07 (23:30GMT)
- U.S. Dollar Trading (USD) slid during yesterdays trading as weaker than expected New Home Sales gave further indication of a slowing housing sector, placing further focus on the sluggish economic growth. The dollar was weighed heavy as strong durable goods did little to provide any support to the greenback, despite the data coming in much higher than consensus at 3.4%. In US share markets, the NASDAQ rose by 23.35 points (0.92%) whilst the Dow Jones rebounded strongly rising by 135.95 points (1.05%) to break through the 13,000 barrier for the first time. Crude oil fell slightly by US$0.06 a barrel to US$65.78. Looking ahead, although little data is expected, Initial Jobless claims may generate a movement on the currency, as analyst assume that a further slowing of the labour markets with a figure of 330k forecasted (Prior: 339k)
- The Euro (EUR) traded in a tight range throughout most of the session, just below record highs. Added to this was solid economic growth out of the Eurozone in the form of the German IFO survey reaching fresh record high of 108.6. Overall the Euro traded with a low of 1.3622 and a high of 1.3667 before closing at 1.3639 in the New York session.
- The Japanese Yen (JPY) was largely unchanged against the dollar for most of the session despite a significantly stronger trade balance surplus being released. Investors chose to show little reaction, ahead of Friday’s enormous slate of data out of Japan. Overall the JPY traded with a range of low 118.27 and a high of 118.85 before closing the day at 118.70 in the New York session.
- The Sterling (GBP) remained near 26 year highs, as slightly better than expected GDP released at 0.7% (Forecast: 0.6%) further confirmed future tightening by the BoE. Overall the GBP traded with a range of a low 2.0004 and a high of 2.0063 before closing the day at 2.0019 in the New York session.
- The Australian Dollar (AUD) was subject to thin trading yesterday due a market holiday before firming at the start of the European session. Overall, the AUD traded with a range of a low 0.8264 and a high of 0.8349 before closing the day at 0.8331 in the New York session. Looking ahead although little data is released out of Australia, markets will eagerly await the RBNZ call rate with many economist expectant of further hike by 25 basis points to 7.75%. UPDATE: RBNZ call rate 7.75%
- The South African Rand (ZAR) touched a near-four month high against the dollar on Wednesday on positive emerging market sentiment.
- Gold (XAU) remained relatively unchanged following the previous day plunge. Gold fell by just US$0.30 an ounce to US$687.40
TECHNICAL COMMENTARY | Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 | | EUR/USD | 1.3480 | 1.3522 | 1.3640 | 1.3667 | 1.3670 | | USD/JPY | 117.60 | 118.22 | 118.60 | 119.04 | 119.89 | | GBP/USD | 1.9878 | 1.9955 | 2.0025 | 2.0134 | 2.0200 | | AUD/USD | 0.8150 | 0.8233 | 0.8335 | 0.8352 | 0.8396 | | XAU/USD | 676.80 | 679.30 | 685.80 | 693.99 | 700.00 | | | | | | |
Initial support at 1.3522 (Apr 17 low) followed by 1.3480 (Apr 13 low). Initial resistance is now located at 1.3667 (Apr 25 trend high) followed by 1.3670 (Dec 30, 2004, All time Record High) Initial support is located at 118.22 (Apr 23 low) followed by 117.60 (Apr 18 low). Initial resistance is now at 119.04 (Apr 18 high) followed by 119.89 (Apr 16 high) Initial support at 1.9955 (Apr 24 low) followed by 1.9878 (Apr 17 low). Initial resistance is now at 2.0134 (Apr 18 trend high) followed by 2.0200 (Psychological Round Number) - Australian Dollar – 0.8335
Initial support a 0.8233 (April 24 low) followed by 0.8150 (Apr 9 low). Initial resistance is now at 0.8352 (Apr 25 high) followed by 0.8396 (Apr 19 trend high) Initial support at 679.30 (Apr 19 low) followed by 676.80 (Apr 13 low). Initial resistance is now at 694.25 (Apr 23 high) followed by 700.00 (Psychological round number) 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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