Bank downgrades knock Aussie
City Index February 24, 2012 1:00 PM
<p>The Australian dollar fell towards the end of the Asia session after Fitch downgraded the ratings of three Australian banks. EUR/USD Range: 1.3357 – 1.3384 […]</p>
The Australian dollar fell towards the end of the Asia session after Fitch downgraded the ratings of three Australian banks.
Range: 1.3357 – 1.3384
Euro-dollar closed in New York at 1.3370, having rallied strongly from a pullback low of 1.3270 to post extended recovery highs of 1.337-1.3347, having taken out the reported barrier at 1.3350. Trade in Asia consolidated this move with trade during the main part of the session contained within a range of 1.3365-1.3380 before dropping late on to 1.3357 into early Europe. German GDP released into early trade at 7am GMT (expectation -0.20% Q/Q) with actual inline at 0.2%. We are now looking at the weekend’s G20 meeting and next Tuesday’s ECB LTRO. Resistance remains at 1.3380, a break to turn attention on the larger barrier interest sitting at 1.3400. Expect decent defense selling ahead, a break to open a move toward 1.3436. Support seen back at 1.3350-1.3340, with stops placed on a break below. Next support seen at 1.3325-1.3320 ahead of 1.3305-1.3295 and 1.3270.
Range: 1.5724 – 1.5753
Cable closed in New York at 1.5740, having trailed euro-dollar’s stronger recovery extension to a session high of 1.5748, which in turn allowed the cross to extend its recent rise to 0.8500. Cable managed to step its way to an extended high of 1.5753 in early Asian dealing, again tracking euro-dollar while the cross was held below 0.8500. The rate drifted lower through the balance of the overnight session, touching a low of 1.5726 ahead of the European open. Euro-sterling trade consolidated its move between 0.8488/0.84985.
Cable offers remain at 1.5750-1.5755, a break of 1.5760 to open a move on toward 1.5776, with offers seen to 1.5780. Support seen at 1.5725-1.5715 ahead of 1.5700 and 1.5680.
Range: 1,775.27 – 1,782.04
Gold has been fairly steady in Asia this morning but is struggling to break through yesterday’s 1,787.50 highs despite a strong run up in crude oil prices. The metal has slipped back from highs of 1,782.20 to 1,775.10 in quiet trading, but remains on a firm footing as central bank demand and investor appetite remains steadfast. This week has seen some technical short covering which ramped the price back up through 1,750 on Tuesday and the trend remains intact despite this morning’s slippage. Schroder investment management are now looking for gold prices to rise in 2012 to possibly 2,500 with the bull run set to continue for another five to eight years. Support is seen at 1,772.80 and 1,749.35 with resistance at yesterday’s highs of 1,787.50 and the psychological 1,800 level which is also likely to attract option related interest.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.