Shares fall further whilst oil trades at a record high. German ZEW survey out today

Tue, Mar 11 2008, 00:35 GMT
by Easy Forex Team

Easy Forex

Shares fall further whilst oil trades at a record high. German ZEW survey out today

U.S. Dollar Trading (USD) was mixed against a number of currencies on Monday as traders once again looked towards stock prices as a measure of market stability. Reports were circulating that Bear Stearns were faced with liquidity problems (albeit unconfirmed) pushed shares down by 11%, dragging share markets lower with growing concerns on the health of the Financial Sector. In U.S. share markets the NASDAQ was down by 141.90 points (-1.64%) whilst the Dow Jones was also lower by 153.54 points (-1.29%). Crude oil closed lower by US$2.75 a barrel to US$107.90, having earlier touched a record high of US$108.21. Looking ahead, Trade Balance data out of the US for the month of January is expected to be released at -59.7% (Prior: -57.76%).

The Euro (EUR) traded in a defined range as technical’s took advantage of data absent trading day. Views grew that recent rallies on the Euro would be capped at 1.5450 as charts traders use to predict price movements signaled the currency's losses may be excessive, said Resona Bank Ltd. Overall the EURUSD traded with a low of 1.5313 ad a high of 1.5405 before closing the day at 1.5347 in the New York session. The German ZEW survey of economic sentiment is made public for the month of March with economist predicting a decline to -40, inline with the previous -39.5.

The Japanese Yen (JPY) continued its run breaking through 102.00, as losses in credit markets prompted investors to reduce holdings of high-yielding assets funded by loans in Japan. Overall the USDJPY traded with a low of 101.55 and a high of 102.65 before closing the day at 101.79 in the New York session.

The Sterling (GBP) extended its advance versus the dollar trading within three month high, as reports showed U.K. producer-price increases matched the fastest annual pace since 1991 last month. Overall the GBPUSD traded with a low of 2.0091 and a high of 2.0220 before closing the day at 2.0100 in the New York session.

The Australian Dollar (AUD) ended the session battered as risk aversion prompted rapid selling of AUDJPY crosses. Overall the AUDJPY traded with a low of 0.9161 and a high of 0.9311 before closing the day at 0.9179 in the New York session.

The Canadian Dollar (CAD) fell as traders sold currencies tied to global growth and commodity exports after investors shed higher-yielding assets on concern that the world's largest economy was slowing. Overall the USDCAD traded with a low of 0.9858 and a high of 0.9983 before closing the day at 0.9977 in the New York session.

TECHNICAL COMMENTARY

Euro – 1.5345
Initial support at 1.5313 (Mar 10 low) followed by 1.5262 (Mar 6 low). Initial resistance is now located at 1.5463 (Mar 7 high) followed by 1.5500 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 101.50
Initial support is located at 101.42 (Mar 7 low) followed by 101.26 (Nov 1999 low). Initial resistance is now at 103.24 (Mar 7 high) followed by 104.19 (Jan 23 high)

Pound – 2.0085
Initial support at 1.9960 (Jan 30 high) followed by 1.9896 (Mar 6 low). Initial resistance is now at 2.0221 (Mar 7 high) followed by 2.0250 (50% retracement of the 2.1161 – 1.9338)

Australian Dollar – 0.9165
Initial support a 0.9160 (Mar 10 low) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9421 (Mar 3 high) followed by 0.9499 (Feb 28 high)

Gold – 974.00
Initial support at 957.20 (Mar 4 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 992.75 (Mar 5 high) followed by 1000.00 (Round Number)