Daily Market Review – Asian Session – Euro remains supported by interest rate hike anticipation

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The Asian session see’s the Euro trading with a slight decline against the USD; however it remains still relatively firm as yesterday’s hawkish comments by European Central Bank President Jean Claude Trichet which saw the EURUSD surge by over 65 pips in yesterday’s late European session. The comments made gave a positive outlook with regards to upcoming release of the European interest rates, with the market expecting the rates to be raised – an event that may see the EURUSD break past the November 4^th high of 1.4281. The Euro is currently trading some 20 pips under the 1.4100 level, which it momentarily broker yesterday, from an Asian session open of 1.4091.

The Sterling dropped in the early part of the Asian session from an open of 1.5991 to a session low of 1.5974 before recouping its losses and rising above the Asian open to a high of 1.6002. The Sterling is currently some 60 pips above yesterday’s 5 month low that was reached in mid European session, following weak UK economic data that casted doubts on when the Bank of England may raise its interest rates as the current state of the UK economy appears somewhat fragile. The current level of the sterling is around 1.6005 and is currently supported around the 1.5970’s – a level which it has failed to convincingly break the last couple of months.

The Japanese Yen momentarily strengthened against the USD in midsession, bringing the USDJPY to a low of 81.53 before bouncing back up to trade close to the session open around the 81.72. A number of economic data for February came out better than expected for the Japanese Yen in early Asian session, including a drop in the unemployment rate and a significant increase in the country’s Retail Trade. The current level of the Japanese Yen is relatively close to the 55-day exponential moving average which currently sits at 81.92 and is regarded as the next resistance level for the USDJPY pair. Should this level be broken, the next resistance for the USDJPY is seen at the March 14^th high of 82.44. Support for the pair is seen at 80.46, the March 18^th low.

The Australian Dollar remains relatively firm in the Asian session around the 1.0237 levels after experiencing a sharp drop in yesterday’s late US session which saw it drop some 30 pips against the USD. Some technical analysts are expecting to see a reversal of trend as the AUDUSD pair has dropped below the previous trend low of 1.0231. Support for the AUDUSD can be seen from the hourly chart at the March 25^th low of 1.0185, with resistance at the 29 year high of 1.0313.

Gold has continued to depreciate in today’s Asian session as it has done so since last Thursday after having reached an all time high of $1447.5 per ounce. The precious metal is currently trading at $1418.6 per ounce after having dropped by $1.50 from the Asian session open. Support for the precious metal is seen at $1410, the Match 28^th and March 3^rd low, with resistance seen at the 20 Day simple moving average which currently stands at $1421.8.