Asian Market Update: EUR/USD trades near key support level as crude jumps above $59 - Crude oil rose above $59 on the back of colder weather in the US Northeast, (The National Weather Service said that below-average temperatures will last through Feb. 18), and higher crude price is capping gains on the USD ahead of Bernanke's speech tomorrow. Many analysts suggest that crude stocks are more than adequate to deal with the increased demand caused by the weather, and a strong correction could be seen in the coming sessions due to renewed buying by speculative investment funds. - Euro trades near key support levels: A EUR/USD break of 1.2923 support will suggest that consolidation that started from 1.2865 has completed at 1.3062, after failing to take out 1.3052/57 cluster resistance. - Equities: The Nikkei 225 is gaining, but trading near session lows. Gains on the Nikkei are being driven by exporters ahead of earnings reports from Toyota. After some strong earnings releases, traders have now turned bullish on the outlook for Japanese equities. With the market lacking fresh buy cues, Nikkei futures contract may stay in narrow range. Volume traded on the Nikkei during the morning session was 965M shares, down from 1.1B shares yesterday morning. South Korea's KOSPI fell from a one month high, led by declines in banking shares. The ASX 200 index rose to a new all-time high and is currently holding near session highs on gains in oil prices. Shares of banks also gained on speculation that the Reserve Bank of Australia will not raise rates. The Hang Seng is little changed as gains in shares of Cheung Kong offset losses in shares of CNOOC and Lenovo. Chinese equities declined on concerns that a change in export tax incentives may hurt the profits of steelmakers. Chinese equities declined despite the PboC's Assistant Governor Yi Gang ruling out an immediate rate hike. - Forex: Asian forex traders continue to focus on the upcoming G7 meeting, and few think that Bernanke's speech will do much to change the outlook for the Fed and the USD. The JPY continues to gain ahead of a speech by German Finance Minister Peer Steinbrueck. He is expected to put pressure on the Bank of Japan to hike rates in order to address the JPY weakness. The EUR is trading near key support levels, and looks vulnerable to further weakness, and some have suggested that the issue is more about the EUR being over-valued than the JPY being undervalued. The JPY is expected to resume its weakness in the coming sessions, but the JPY's short positions as a result of such trading have also built up substantially, making players nervous about the G7 event risk. The CAD continues to make a modest recovery against the USD after hitting 15-month lows on Friday, with higher crude prices and a strong Ivey Purchasing Managers Index boosting CAD sentiment. - Gold continues to retrace Friday's losses, and traders are noting demand from the fund sector. Investors were careful about picking up Treasuries during Asian trade, as traders are worried that market players will sell bonds to make room in their portfolios ahead of a series of auctions this week.