EUR/USD
It was a dull start to the week with the US on holiday’s due to the Presidents day, and a light macroeconomic calendar in Asia and the EU. The EUR/USD pair held above the 1.0600 level, but at the same time traded as high as 1.0632, as political concerns undermine the common currency. In the data front, Germany released its January Producer Price index, which resulted up for the month by 0.7%, above an expected 0.2%, while compared to a year earlier, prices at factory levels rose by 2.4%, above previous 1.0% and market’s forecast of 1.9%. Preliminary consumer confidence for February in the EU fell by more than expected, with the index down to -6-2 from a previously revised -4.8. Things will get more interesting staring this Tuesday, with the release of European PMIs, and further on Wednesday, with the latest FOMC’s Minutes.
From a technical point of view the pair has made little progress over the last 24 hours, maintaining a bearish, stance despite the sharp bounce from 1.0520 from last week. In the 4 hours chart, the price has been unable to advance beyond a bullish 20 SMA, whilst the Momentum indicator heads south below its 100 level and the RSI consolidates around 47, this last reflecting the limited intraday volume. A break below 1.0590 is required to confirm a bearish extension towards the 1.0560 region first, followed later by the mentioned low at 1.0520.
Support levels: 1.0590 1.0565 1.0520
Resistance levels: 1.0650 1.0680 1.0720
USD/JPY
The USD/JPY pair saw little action this Monday, recovering modestly above the 113.00 figure, but unable to extend its recovery further, in spite of advancing equities in Asia and Europe. Japan will release its All Industry Activity index and the Nikkei Manufacturing PMI during the upcoming hours, both expected below previous readings. Still the pair will likely keep on correlating with US Treasury yields rather than trading on macroeconomic data. The modest recovery was contained by a bearish 100 SMA in the 4 hours chart that also shows that the RSI indicator remains flat around 45, whilst the Momentum indicator keeps recovering, but within negative territory, pretty much maintaining the downward potential intact, particularly after the sharp retracement from the 115.00 region. Speculative interest may prefer to wait until next Wednesday, when the FED will release the Minutes of its latest meeting, before taking firmer positions in the USD/JPY pair.
Support levels: 112.45 112.10 111.60
Resistance levels: 113.00 113.40 113.85
GBP/USD
The GBP/USD pair advanced up to 1.2482 during the London morning, and settled around 1.2460, as the House of Lords began debating the Brexit bill. Policymakers are expected to pass it with no amendments, clearing the way to trigger the Art. 50 next March. There were some minor macroeconomic releases in the UK, with a better-than-expected Rightmove house price index, up by 2.0% in January, yet at the same time, the slowest rate of price gains in four years. The CBI orders survey showing that industrial orders for February rose to a two-year high, with the index up to 8 from previous 5 and the expected 3. Despite this short term recovery, the Pound remains vulnerable ahead of the upcoming Brexit, particularly after recently released data indicating higher inflation is beginning to affect the economy. Technically, the 4 hours chart shows that the price is now around a horizontal 20 SMA, which also converges with a flat 200 EMA, this last indicating the absence of clear trend since early February, whilst technical indicators head south after failing to overcome their mid-lines, all of which supports a new leg lower, on renewed selling interest below 1.2430, the immediate support.
Support levels: 1.2430 1.2380 1.2345
Resistance levels: 1.2480 1.2530 1.2565
GOLD
Gold prices consolidate around Friday’s closing levels, with spot ending the day at $1,237.40 a troy ounce, confined to a tight range due to a holiday in the US and ahead of the release of US FOMC’s Minutes later this week. Also, several FED officials will be on the wires during the next few days in different events, which means that gold traders will be looking for clues on the timing of the next rate hike before moving the metal in a certain way. From a technical point of view, and according to the daily chart, the risk remains towards the upside, as the price held above the 50% retracement of its post-US election slide, and also above a sharply bullish 20 SMA. Technical indicators in the mentioned chart hold in positive territory, with the Momentum heading modestly lower within positive territory, but the RSI steady at 63. Shorter term, and according to the 4 hours chart, the price is a few cents above a bullish 20 SMA, the RSI indicator heads north around 55, but the Momentum indicator keeps diverging, heading south around its 100 level, this last somehow warning that bulls are beginning to pullback.
Support levels: 1,233.90 1,222.50 1,216.60
Resistance levels: 1,244.60 1,255.10 1,261.60
WTI CRUDE
Crude oil prices posted some modest advance at the beginning of the week, underpinned by rising speculation that the OPEC may extend its output cut deal. West Texas Intermediate Crude oil futures advanced up to $54.22 a barrel and closed the day at 53.97, with gains limited by lingering concerns about rising US production. From a technical point of view, the black gold maintains its neutral stance, as in the daily chart, the price has barely advanced above a still flat 20 DMA, currently around 53.40, while technical indicators continue consolidating around their mid-lines with no directional strength. In the 4 hours chart, the commodity is currently trading above all of its moving averages that anyway remain flat and within a tight range, whilst technical indicators continue hovering around their mid-lines with no clear directional strength. Gains beyond the 55.00 level seem unlikely for the upcoming days unless the US reports a sharp drop in stockpiles, and even in that case, a spike above the level could be quickly reversed on profit taking.
Support levels: 53.40 53.00 52.60
Resistance levels: 54.40 55.20 55.70
DJIA
US markets were closed due to a local holiday this Monday, with the DJIA last registered close at 20,624.05. Despite the cautious mood ahead of FED’s Minutes and uncertainty surrounding a tax reform, expected to be announced next week, US equities advanced in futures trading, extending up to an all-time high of 20,693 and trading around 20,650 ahead of the Asian opening. From a technical point of view, the daily chart shows that the RSI indicator has resumed its advance around 78, while the benchmark is far above bullish moving averages, maintaining the risk towards the upside. The Momentum indicator in the mentioned time frame has eased within overbought levels, rather reflecting the absence of volume than suggesting an upcoming bearish move. In the 4 hours chart, the 20 SMA maintains its bullish slope below the current level, now around 20,612, while the Momentum indicator is currently bouncing from its mid-line and the RSI consolidates around 68, also favoring further gains, particularly on an advance beyond the mentioned intraday high.
Support levels: 20,612 20,552 20,506
Resistance levels: 20,693 20,750 20,800
FTSE 100
The FTSE 100 closed flat at 7,299.86, weighed by plummeting Unilever, as shares of the packaged- food company sunk after Kraft Heinz dropped its $143 billion offer to combine both companies. Shares, however recovered, ahead of the close, and Unilever closed 5.99% higher. Royal Bank of Scotland lead winners’ list, up 6.81%, on news that the bank may not sell its Williams & Glyn business, while Pearson shed 3.89%, the worst performer this Monday. The bullish stance has eased, according to technical readings in the daily chart, as the RSI indicator retreats from overbought levels, now heading south around 62, whilst THE momentum indicator has turned flat within positive territory. In the same chart, the 20 SMA, remains flat around 7,212. Shorter term, and according to the 4 hours chart, the 20 SMA has partially lot upward strength, with the index stuck around it, whilst technical indicators head modestly lower around their mid-lines, coinciding with the longer term perspective and supporting a downward corrective movement for this Tuesday.
Support levels: 7,254 7,212 7,162
Resistance levels: 7,354 7,390 7,430
DAX
European shares opened higher, but the enthusiasm faded as the day went through, with the major indexes closing anyway with gains. The German DAX added 71 points or 0.60% to close at 11,827.62, after peaking at 11,860 right after the opening. RWE AG was the best performer up 1.49%, followed by Deutsche Telekom that gained 1.18% of talks of a merger involving its US mobile unit. Beiersdorf topped losers’ list, down 1.88%. The index presents a bullish tone in its daily chart, as the index settled not far from the multi-month high posted last January at 11,891, and well above a bullish 20 DMA, whilst technical indicators have recovered their bullish slopes within positive territory. In the 4 hours chart, the index is also above a bullish 20 SMA, currently at 11,782, whilst technical indicators are losing their upward strength, but holding within positive territory, rather reflecting the limited intraday volume than suggesting upward exhaustion.
Support levels: 11,782 11,730 11,694
Resistance levels: 11,848 11,891 11,930
