The geopolitical landscape will continue to make for volatile trading conditions in most major asset classes. Commodities are up sharply on Middle East violence and the Kiwi was down following a 6.3 earthquake in New Zealand. Equities were also lower. Tomorrow’s speeches by European Central Bankers and Middle East protests should build on today’s increased volatility.
The violence in Libya continues with the Gadhafi regime reportedly attacking protesters with tanks, helicopters, and hired foreign mercenaries. Protests continue in Iran and Bahrain as well. This unrest has spread to the commodity markets with both spot crude oil and silver pushing to new highs.
The New Zealand dollar was down sharply after an earthquake struck in the nation’s second largest city. The NZD/USD has fallen below the 0.7500 support line to a low of 0.7455. Further declines may be in store for the Kiwi. Support looks to be near the 0.7350 level.
These geopolitical events will continue to press traders tomorrow as well as a news heavy day. Crude oil should once again be supported by the protests and violence in the Middle East. The $100 price level seems well within reach this week. Silver also may push past its new high of $33.47.
The Bank of England Monetary Policy Minutes is expected to show further support from committee members for an interest rate hike and should prove to be supportive of the pound. Initial resistance for the GBP/USD is found at 1.6280. 1.6450 may also come into play. Support is 1.6075 followed by 1.5960.
Both ECB President Jean-Claude Trichet and outgoing Bundesbank President Axel Weber will be speaking tomorrow. European central bankers have given a number of hawkish speeches lately. Trichet may try to talk down the inflationary pressures in the EU and the market’s increasing expectations for an interest rate hike. EUR/USD resistance is this week’s high at 1.3710 followed by the February high of 1.3860. Support is today’s low of 1.3520. A move below this level would target the February low of 1.3430.
Other relevant articles you may like
Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
