The U.K. released several economic reports today. The fourth quarter GDP as measured by the second estimate printed at -0.2%. This was in line with the first estimate. Even though industrial production has fallen since the first estimate, the GDP was held steady due to growth in the services sector. The index of services for December 2011 was flat. Economists expect Q1 GDP to show economic activity rebounding and it is possible that the U.K. might avoid a recession. The GBPUSD broke above its 200 period moving average line as the pair gets ready to test its resistance level. Support for the GBPUSD is seen at 1.5660 and resistance is seen at 1.5900. The Inside View indicator on HotForex shows that 51% of traders are short on the GBPUSD.
Reserve Bank of Australia Governor Glen Stevens in his speech to the Australian parliament said that the policy decision to keep rates on hold was justified. The RBA surprised markets by keeping rates on hold at 4.25% at its February policy meeting. Recent assessment has shown that Australia’s growth remains near trend and inflation within the target zone. The RBA believes the factors that caused it to cut rates in November and December are no longer pressing and the major catastrophe that was expected in Europe has been avoided. Banks in Australia have access to funding markets again, although at higher rates. Commodity prices have not declined as expected and have held their ground despite a global financial crisis. In the political crisis that is currently brewing in Australia, former Foreign Minister Kevin Rudd said that he will contest the Australian Labor leadership ballot on February 27th. He has said that he will not challenge Gillard a second time if he loses the ballot. Support for the AUDUSD is seen at 1.0600 and resistance is seen at 1.0800. The Inside View indicator on HotForex shows that 50% of traders are long on the AUDUSD.
The U.S. New home sales report is expected later today. We are expecting the report to show that 316K homes were sold in January on an annualized basis, up from 307K in December. Housing data has been generally positive with existing home sales report showing improvement earlier this week. Inventories have been declining gradually showing that buyers are coming back to the markets. The U.S. unemployment claims for the previous week held steady at 351K. The trend has been showing that the labor market is improving as the four week moving average dropped 7k from the previous week. Support for the USA30 is seen at 12,800 and resistance is seen at 13,100.
Crude oil prices rose above $108 a barrel due to political tensions about Iran. There are fears that supply from Iran could be stopped. The European Union has said that it would ban purchases of Iranian oil. Analysts are expecting prices to jump by as much as 20% if the ban goes through. Support for the USOIL is seen at 101.30 and resistance is seen at 110.