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Hope spurs markets as Greece agree to austerity measures

Daily Outlook - 13th February 2012

Written by Imran Allana

CURRENCY TRADING SUMMARY 13/02/2012

Sterling / U.S Dollar (GBP / USD):

GBP/USD experienced a mass of selling on Thursday after the Bank of England announced an increase in their asset purchase facility, taking it from £275 billion to £325 billion, sending Cable down from a high of 1.5885 to a low of 1.5730, by the close on Friday.  Cable opened overnight at 1.5770 and experienced a good rally to a session high of 1.5827 before settling in a range in time for the European open.  Technical analysis is pointing to a lower day for Cable with a pivot of 1.5820 and support at 1.5725 and 1.5700.

Euro / U.S Dollar (EUR / USD):

EUR/USD had good rally overnight off the back of positive news out of Athens stating that Greece will push through austerity measures that have been put on them by European leaders.  Opening at 1.3210, it rallied to a session high of 1.3284.  Looking ahead, technical analysis is biased towards selling at a pivot of 1.3260 with supports at 1.3200 and 1.3155.

U.S. Dollar / Japanese Yen (USD / JPY):

USD/JPY the pair is once again in a tight range between Y77.55-80. A break of 77.55 support opens up the potential to move to 77.10. A break of the resistance of 77.80 would signal a flag extension in the trend up from 1st of February low, it would then look to achieve at least 78.20. There will be a speech from the Governor of the Bank of Japan tonight as well as the predictable Interest Rate announcement and the much more studied Monetary Policy Statement. Look for further volatility at that time but there is certainly a lull at the moment with trading in other currencies preferred for intraday gains.

Australian Dollar / U.S. Dollar (AUD / USD):

AUD/USD: Although the market has been very well bid after taking out the key October highs by 1.0755, daily studies are finally starting to roll over from overbought territory and warn of a more significant pullback ahead. Look for the latest weekly close below 1.0700 to provide additional confirmation for short-term topping, while back below 1.0525 would be required to open the door for a more legitimate bearish reversal. A break back above 1.0845 would delay bearish outlook and give reason for pause.

Gold (XAU):

GOLD (XAU) had a very lacklustre session, starting the overnight session at 1725.37 and ranging between 1720/32 finally closing at 1732.  Technical analysis is pointing towards a lower trading day with a pivot of 1742 and supports at 1704 and 1692.

Oil:

OIL opened in Asia at 99.06 and rallied to a high of 99.93, breaking a key resistance at 99.31.  Going forward, technical analysis has a preference to sell oil at a pivot of 99.701 with supports at 98 and 97.35.

Technical Commentary:

  Sup 2 Sup 1 Last Res 1 Res 2
GBP/USD  1.5700  1.5725  1.5811  1.5820  1.5845
EUR/USD 1.3155   1.3200  1.3258  1.3280  1.3325
USD/JPY  76.90  77.25  77.73  77.75  78.00
AUD/USD  1.0635  1.0685  1.0742  1.0750  1.0790
XAU/USD 1692.00  1704.00   1727.47  1742.00  1752.00
OIL/USD  97.35  98.00  99.70 100.15   101.00

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