Fears of the sovereign debt crisis in the eurozone subsided today as investors flocked to riskier , higher yielding assets. Asian and European markets were stronger after US equity markets rallied more than 1.5% overnight, with the Dow Industrial Average closing at 10268.81. The euro is slightly weaker today having jumped more than 1% vs. the greenback in the previous trading session. The single currency tested the 1.3780 level several times before sliding to 1.3740. A Fibonacci extension from the Feb 5th through the Feb 12th lows with the crest peaking at 1.3838 on Feb 9th, points to strong resistance at the 1.3780 level. A break to the upside here leaves room for the euro to advance up to the key level of 1.3893, where the 100% Fibonacci extension overlaps the daily pivot. Downside risk gains momentum with a break of the 1.3640 support, and sets up for significant losses past 1.3571.
UK Jobless Claims Jump
Cable was weaker today after worse than expected employment numbers were released early in the London trading session. While unemployment held steady at 7.8%, the economy shed 23,500 jobs in January, sharply lower than analysts' forecasts of an increase of 10,000 jobs. This comes on news that the BOE had unanimously voted to halt bond purchases at the Feb 4th meeting. Sterling had made sharp advances vs. the greenback as increasing risk appetite reduced the demand for the safe haven currency early in the New York session yesterday. Having tested the 1.5810 level, cable slid back .5% on the negative news to 1.5732 before consolidating back to the 1.5770 range. Cable remains in an upward channel since Feb 8th and stands to make considerable advances with an upside break of the formation, currently resting at 1.5820. Support lies at 1.5687 and further at 1.5608.
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