Daily Market Commentary
EUR/USD Downturn Continues with EU Divided
The EUR/USD’s slide has continued and the currency pair has been driven below our key medium-term downtrend again, throwing March’s uptrend into question. The EUR/USD is currently trading above some important supports and the currency needs a topside boost soon to avoid a more protracted selloff. The EUR/USD came under further selling pressure yesterday after Merkel implied that the IMF may be the best route for Greece. Additionally, rumors spread that the Fed may raise the rate again at its emergency window. The concept of monetary ordering in the U.S. combined with division in the EU has resulted in a swift and hefty pullback in the EUR/USD. Sarkozy made the waters even murkier today by reiterating France’s opposition to IMF intervention and confirmed the EU’s support for Greece. Hence, the two largest economies are squaring off, making next week very interesting since Greece provided a one week timeline for a solution. Psychological pressures have come to the forefront due to the lack of economic data today, though the EU will re-enter the fray on Tuesday with the release of its Flash PMI set along with Germany’s Business Ifo Business Climate figure. Meanwhiel, it will be interesting to see whether the EUR/USD can hold its psychological 1.35 level land March lows.
Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday 2/26, and 3/3 highs. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/5 and 2/23 lows. Meanwhile, the psychological 1.35 area could serve as a solid technical cushion should it be tested.
Present Price: 1.3543
Resistances: 1.3552, 1.3571, 1.3591, 1.3610, 1.3626, 1.3643
Supports: 1.3527, 1.3513, 1.3498, 1.3483, 1.3471, 1.3457
Psychological: March and February Lows, 1.35
GBP/USD Hit with EU Uncertainty and RBI Hike
The Cable has been clobbered today despite a lack of pertinent news and/or data from the UK. EU anxiety remains at a heightened state after Sarkozy reiterated Frances support for Greece and objection to IMF involvement. Hence, Sarkozy is pitting France against Germany, which is becoming a heated showdown between the EU’s two economic powerhouses. Meanwhile, Greece has set a one week timeline for and EU plan before opting to head to the IMF for help. All of the EU uncertainty has finally bled over into the Pound, and the Cable has taken a drubbing despite this week’s surprisingly positive UK employment data. Additionally, the Reserve Bank of India raised rates by 25 basis points, surprising FX markets and accelerating risk-averse cash flows. With the data-wire quiet today, psychological forces will likely remain at the steering wheel. Meanwhile, it will be interesting to see whether the Cable and the risk trade in general can manage to stabilize from present levels amidst this wave of uncertainty. The UK will kick off next week with CPI and CBI Realized Sales data points, meaning Monday could be an active session as well. If UK CPI should come in hot again, this could keep the BoE at bay and discourage the central bank from injecting liquidity.
Technically speaking, the Cable still has multiple uptrend lines serving as technical cushions along with 3/15 and 3/16 lows. Additionally, the psychological 1.50 could serve as a solid technical cushion should it be tested. As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/16 highs.
Present Price: 1.5074
Resistances: 1.5086, 1.5101, 1.5112, 1.5124, 1.5143, 1.5161
Supports: 1.5042, 1.5026, 1.5016, 1.5002, 1.4989
Psychological: 1.50, March lows 
USD/JPY Glides Higher Despite FX Volatility
The USD/JPY is creeping higher today despite rampant volatility today in the FX markets. Both the EUR/USD and Cable are undergoing hefty selloffs as uncertainty in the EU unravels the risk trade and sends investors toward the Dollar for safety. Additionally, the Reserve Bank of India surprised markets by hiking its interest rates by 25 basis points, exacerbating risk-averse flows. These two developments have had a significant impact on the markets today due to the lack of data releases from around the globe. However, the USD/JPY has only benefitted slightly from the Dollar flows so far today. Comparative inactivity in the USD/JPY is a bit puzzling since the Fed’s monetary stance has become increasingly tighter as compared to the BoJ’s. Therefore, it will be interesting to see whether the USD/JPY opts to participate as the trading session wears on. A possible reason for the USD/JPY’s calm behavior could be the reluctance of investors to send the currency pair beyond the realms of its highly psychological 90 area. Although the data wire has been quiet today, data streams will pick up next week with key UK and U.S. data on top Monday, followed by Japan’s Trade Balance figure on Tuesday.
Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/18, and 3/12 highs. Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/18 lows. .
Present Price: 90.59
Resistances: 90.63, 90.69, 90.75, 90.79, 90.83, 90.93
Supports: 90.55, 90.49, 90.42, 90.34, 90.27, 90.21
Psychological: 90, March highs and lows 
Gold Undergoes Large Leg Down
Gold is undergoing a large leg dad as it participates in risk-averse flows. The Dollar is appreciating across the board in reaction to political uncertainty in the EU in regards to how to deal with Greece. However, gold was holding up relatively well until news hit that the Reserve Bank of India decided to raise its interest rates by 25 basis points. This announcement sent a shockwave throughout the FX markets and sent investors scurrying towards the Dollar. Gold experienced a windfall of selling activity as well, dropping all the way down to our key first tier uptrend line and has nearly retested its highly psychological $1100/oz level. That being said, investors should keep an eye on gold’s ability to hold these two key technical levels along with the ability of the EUR/USD and Cable to stabilize from intraday losses. The U.S. data wire will be quiet today, meaning attention will remain on today’s psychological and news developments. Data will pick up next week, meaning key risk-trade supports will likely be tested soon.
Technically speaking, gold has our first tier uptrend line serving as a technical cushion along with its highly psychological $1100/oz level. Our 1st tier runs through previous March lows, highlighting the prevalence of present levels. As for the topside, gold faces multiple downtrend lines along with 3/15 and 3/12 highs.
Present Price: $1105.80/oz
Resistances: $1106.48, $1107.27, $1108.06/oz, $1109.37/oz, $1110.43/oz, $1111.57/ oz
Supports: $1105.25/oz, $1104.46/oz, $1103.85/oz, $1103.06/oz, $1102.27/oz, $1101.40/oz
Psychological: $1100/oz, March highs and lows 
AUD/USD Drops Following RBI Hike
The AUD/USD is experiencing a sizable leg down after the Reserve Bank of India surprised markets by hiking interest rates by 25 basis points. The move sent shockwaves throughout the FX markets, exacerbating risk-averse flows after the Dollar was already strengthening in the midst of EU uncertainty. Sarkozy has reiterated Frances support for Greece, pitting the EU’s two largest economies against one another. Australia was holding up relatively well even with huge selloffs taking place in the Cable and EUR/USD. However, the RBI’s rate hike has had a considerable impact on the Aussie due to Australia’s economic exposure to India. Meanwhile, the data wire is very quiet today, placing added emphasis on today’s news events. It will be interesting to see how the Aussie holds up as the trading session progresses. Due to the extent of the respective pullbacks in the EUR/USD and Cable it wouldn’t be surprising to see some buyers enter the market on oversold conditions. Such a wave could benefit the Aussie and keep the currency pair above our 2nd tier downtrend line, which runs through 3/15 lows. Therefore, investors should continue to monitor broad-based activity in the dollar for the remainder of the day.
Technically speaking, the Aussie multiple downtrend lines serving as technical barriers along 3/16 and 3/12 highs. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 3/16 and 3/15 lows.
Price: .9142
Resistances: .9153, .9162, .9169, .9177, .9185, .9192
Supports: .9139, .9132, .9122, .9116, .9110, .9100
Psychological: .91, .90, 2010 highs 
S&P Futures Slide on RBI Rate Hike
The S&P futures are finally reacting to strength in the Dollar as the Greenback rallies across the board in reaction to the Reserve Bank of India’s surprise decision to raise its interest rates by 25 basis points. The RBI’s decision sent shockwaves throughout the FX markets, resulting in a broad-based wave of risk-aversion. The RBI’s rate hike comes with increasing uncertainty in the EU as Sarkozy reiterated his defense for Greece, butting heads with Germany in what is turning out to be a historical development for the EU. Greece has set a one week timeline for an EU resolution before heading to the IMF for help. Meanwhile, rumors have been spreading that the Fed may raise the discount rate by 25 basis points as well. Hence, division in EU and liquidity tightening has hammered the risk trade, finally dragging the S&P futures lower despite their resilience throughout this week’s uncertainty in the EU. News has been hitting from all angles this week without much economic data over the past two days. Hence, psychological forces have been left to their own devices. However, the data wire will pick back up next week with the UK printing CPI and CBI Realized Sales followed by U.S. Existing Home Sales. Therefore, heavy activity could carry over into next Monday’s trading session. Meanwhile, it will be interesting to see whether the risk trade can stabilize and stem the bleeding from today’s selloff. The S&P futures will look to hold their psychological 1050 level along with our 3rd tier uptrend line.
Technically speaking, the S&P futures are in the midst of retesting 1050 while fighting to stay above our 3rd tier uptrend line. That being said, the futures do have multiple uptrend lines serving as technical cushions along with 3/16 and 3/15 lows should they be tested. As for the topside, the S&P futures only face previous 2010 highs for the time being.
Price: 1154.75
Resistances: 1157.75, 1160, 1162.5, 1164.5
Supports: 1152.25, 1150.25, 1148.25, 1145.5, 1142.5
Psychological: 2010 highs, 1150, 1175, 1200
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