Global Markets Commentary 3rd March 2011

Global Markets Commentary 3rd March 2011 : The dollar has come under pressure as higher oil prices will push other central banks to raise interest rates to combat inflation even as the Federal Reserve maintains its simulative monetary policy. February ADP employment beat forecasts at 217k vs. 175k expected. Looking ahead, Weekly Jobless Claims forecast at 398k vs. 391k previously. February PMI Manufacturing forecast at 59.5 vs. 59.4 previously. The euro finally broke above $1.3862 to hit a four-month high of $1.3890 and now stands at $1.3856, on expectations the ECB will move towards an eventual rate hike. There is a risk the euro will slip after an ECB meeting today.

The greenback also hit a one-month low of 81.57 yen, though traded around 81.70 yen. The Sterling enjoyed solid gains tracking its European neighbor higher to break above 1.6300 with help of strong jump in the February Construction PMI to 56.5 vs. 52.9 forecast. The Aussies rallied back to 1.0180 after Q4 GDP was strong at 0.7% vs. 0.6% forecast. Oil surged higher on news that Libyan planes had bombs rebels in an Oil Factory. WTI Oil traded at $102.34 a barrel.

Technical Outlook 3rd March 2011 :

EUR/USD:The Euro strongly recovers from low of $1.3742 as PPI rose 1.5% mom, highest reading since 1982, 6.1% yoy. and it is currently trading at 1.3852. EUR/USD is still capped by 1.3888 resistances for the moment as investors are cautious ahead of today's ECB meeting, where there is high anticipation for Trichet to step up the tone on inflation. While immediate support is seen at 1.3810 levels (21 4hrly EMA). EURINR (62.32) exporters can cover near 62.80 levels for March exposure and importers can cover partially near 61.80 levels. EUR/INR is likely to trade in the range of 62.20 - 62.55 today. Short term: Slight bullish and Medium term: bullish.

GBP/USD:The Sterling recovers against greenback after stronger than expected UK construction PMI which rose to 56.5 in February, versus consensus of 52.9. That's also the highest reading in eight months. Daily stochastic is showing upside momentum. Immediate support is at 1.6260 (21 days Daily EMA). GBP/INR (73.45) March month's exporters should cover near 73.60 levels and importers cover near 72.80 levels. GBPINR is likely to trade in the range of 72.30 - 73.60 levels today. Short Term: Slight Bullish and Medium term: bullish

USD/JPY:The pair remains in a range of 81.60 - 82.40. Daily Stochastic is still showing near oversold levels with slight upside movement. Support is at 81.56 levels (4hrly 21 lower Bollinger) while immediate strong resistance is at 82.40 levels (21 Days Daily EMA). Yen Exporters are suggested to book March month's exposure partially near 81.50-60 levels and further on dips while Yen Importers can cover their exposure towards 82.40 levels. Medium Term: Maintain Bearishness

AUD/USD:The Aussie made high of 1.0182 and low of 1.0084 levels yesterday. Building approvals (JAN) -24.8% vs -6.6% expected and -5.0% previously. Trade balance (JAN) $1.875B vs $1.550B expected and $1.981 previously. Strong key resistance is at 1.0210 levels (21 Daily Upper Bollinger) and support at 1.0090 levels (21 Daily EMA). Exporters are suggested to book March month exposure partially near 1.0200 levels and above while Importers can cover their exposure near parity levels. Medium term: Bullish.

Gold: The Gold traded at fresh record highs before consolidating at $1433.28 levels. Further rally will remain in favor as long as holds minor support of 1405.2 and trading above 1432.5 resistances levels will confirm long term uptrend. Medium term: Maintain bullishness.

Dollar Index:The Dollar Index (76.66) is again trading below 77.00. The US dollar index is around 0.5% lower and looks vulnerable ahead of the important ECB meeting tonight. Immediate support comes at 76.57 levels (H4 lower Bollinger) while resistance at 76.97 levels (21 daily EMA) followed by 77.25 levels. Medium Term: Neutral source www.forexhound.com... For the latest updates PRESS CTR + D or visit Stock Market news Today

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