Friday 8 April 2011

Forex: AUD/USD - holding above 1.0450, correction looms (Barcelona) - The Aussie hit 1.0507, new all-time high in its flotation era, before sinking 100 pips on Japan’s earthquake; despite the sell-off that was driven mostly by profit taking, a recovery to higher levels was seen in late US trade. Current price stays at 1.0450.

"Hourly chart has turned bearish with price capped below 20 MSA and momentum heading south, advancing a probable bearish corrective movement. 4 hours charts show 20 SMA still strong around 1.0400 now, with indicators aiming to regain the upside yet lacking definitions right now: pair needs to recover at least above 1.0470, to extend its bullish trend to fresh highs" said Valeria Bednarik, Chief Analyst at

Support levels: 1.0420 1.0370 1.0340, Resistance levels: 1.0470 1.0500 1.0550

Day Wrap-Up: Euro firm on ECB rate hike; Stocks struggle (Barcelona) - Asian session – Aussie strengthens as jobless rate falls below 5%

The Aussie roared ahead on encouraging jobs report. Unemployment rate fell to 4,9% after the economy added 37,800 new jobs. Broad-based gains were printed against all rivals, versus the Dollar, closing in on 1.0500, against the Kiwi, recovering 1.3450, while the Euro also pulled back wildly to 1.3650. EUR/USD tested 1.4300 on profit taking. USD/JPY was faced with heavy selling at 85.50. BoJ announced loan program for banks to lend to companies for post-quake reconstruction. Nikkei +0.5%, HK -0.25%.

European session – As expected ECB hikes, BoE holds

EUR/USD wobbled between 1,4260 and 1.4320 while Trichet came on stage to explain the ECB rate decision of hiking rates by 25bp to 1,25% as widely expected. He sounded slightly more hawkish, with analysts hinting the next 25bp hike to be in June. Traders read from his words more moderate further rate “normalization” going forward. GBP/USD found support at 1.6260 following a rate hold by the BoE. AUD/USD rallied to kiss 1,0500. USD/JPY held above 85.00. European stocks fell 0.50% on average.

American session – Japan quake, US budget standoff main focus

EUR/USD recovered 1,4300 handle. GBP/USD rose back above 1,6300. AUD/USD retreated off 1,0500. USD/JPY fell as lo as 84.60 only to regain 85.00. US weekly jobless claims fell to 382,000 from 392,000. The US Government resumed negotiations on the new budget, no agreement was reached. The House prepares a stopgap bill to allow funding to continue while talks unfold. A 7.4 magnitude quake hit Japan (Sendai), no new damage to nuclear plants reported. This latest natural disaster sent stocks lower, S&P 500 closed down 0.2% , while providing some minor relief to the Dollar. WTI oil broke $110/bbl. Gold made new record highs at $1,465/oz. US 10-year note 1 bp up at 3.55%. 


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