EUR/USD
Dollar’s bearish run extended to fresh 1-month lows against its European rivals, which rallied on positive news coming from the region. The common currency got a boost from the outcome of the first French presidential debate, as Emmanuel Macron was the most convincing. Still Marine Le Pen leads vote intention polls, with 28%, followed by Macron, who gained some points and now has 24%. The far-left right losing the Dutch election, and now suffering a modest defeat in France brought some relief to EUR’s bulls, who rushed to push the pair higher in a weakening-dollar environment. Despite the American currency remained under pressure during Wall Street’s trading hours, with stocks plunging and Treasuries soaring, the EUR/USD pair was unable to advance beyond 1.0820, a major Fibonacci resistance, paring gains at 1.0818 and settling for the day not far below this last.
The macroeconomic calendar remained scarce, situation that will repeat this Wednesday, being the most remarkable release US existing home sales. In the meantime, and from a technical point of view, the EUR/USD pair maintains the bullish stance hovering a few pips below the 50% retracement of the post-US election decline at the mentioned 1.0820 level. In the 4 hours chart, the 20 SMA heads sharply higher below the current level, currently at 1.0765, whilst technical indicators have lost their bullish strength and turned flat near overbought readings, but far from indicating an upcoming downward move. A break above 1.0828, February high, could see the pair extending up to December monthly high, en route to 1.0930, the 61.8% retracement of the mentioned slide.
Support levels: 1.0765 1.0730 1.0700
Resistance levels: 1.0830 1.0870 1.0910
USD/JPY
The USD/JPY pair fell below the 112.00 level for the first time since early February, trading as low as 111.68 before bouncing some 20 pips. The pair has spent most of the first half of the day consolidating within its Monday’s range, but broke south after Wall Street’s opening, as stocks plunged to fresh 4-week lows, whilst Treasury yields followed suit. US government bonds surged as the dollar came under pressure, leading to a sharp retracement in yields. The 10-year note yield sunk to 2.42% from previous 2.47%, while the 30-year benchmark is down to 3.04% from 3.09% previously. Japan will release its February trade balance figures and the Minutes of the latest BOJ’s meeting during the upcoming Asian session, which may lead to further gains in the yen. From a technical point of view, the bearish potential remains strong, albeit the pair has a major support around 111.65, from where it bounced several times during the past two months. Nevertheless, and in the 4 hours chart, the price is well below its 100 and 200 SMAs that anyway remain flat, while technical indicators remain within negative territory, with the RSI now consolidating around 28, somehow reflecting easing selling interest. At the same time, the pair is unable to recover above 112.00, the 38.2% retracement of late 2016 rally, now the immediate resistance.
Support levels: 111.65 111.20 110.70
Resistance levels: 112.00 112.50 112.90
GBP/USD
The GBP/USD pair trades at its highest since late February, having extended its intraday advance up to 1.2493 and ending the day some 10 pips below this last. The Pound soared after the release of UK inflation data, as consumer prices rose far beyond expected. Yearly CPI hit 2.3% in February from 1.8% in January, while monthly basis, inflation surged by 0.7& from a previous decline of 0.5%. Core yearly inflation jumped to 2.3%. Producer prices rose less than expected, but remained high in the same month, while the Retail Price Index jumped to 3.2% YoY. The readings came less than a week after the BOE shifted to a hawkish stance, with Christine Forbes voting for a rate hike and with the rest of the MPC not far below her, ending up fueling speculation that the BOE will have to raise rates rather sooner than later. The 4 hours chart shows that technical indicators have lost upward momentum, turning flat in overbought territory, although given that the price holds near its daily high, chances of a downward corrective move are limited. In the same chart, the 20 SMA heads sharply higher some 100 pips below the current level, reflecting the strength of the intraday advance. The pair has settled above 1.2425 the 38.2% retracement of the January rally and the critical support, as the bullish stance will likely persists as long as the price remains above it.
Support levels: 1.2345 1.2300 1.2260
Resistance levels: 1.2425 1.2470 1.2510
GOLD
Spot gold jumped to a fresh 3-week high of $1,247.54 a troy ounce, to settle at 1,244.60 by the end of the US session, as the dollar index plunged to its 99.42, its lowest since February 2nd, while the American currency weakened against most of its major counterparts. Further fueling the advance during US trading hours was Wall Street’s slump, with the DJIA down over 200 points. Gold’s daily chart presents a bullish stance, as the price held above its 20 SMA on an early slide, while technical indicators maintain upward slopes within positive territory, and particularly the RSI indicator anticipates some further gains, heading north around 63. Still the rallied stalled right below a bearish 200 DMA, currently the immediate resistance at 1,249.25. Above it, the bright metal has scope to retest February high of 1,263.79. Technical readings in the 4 hours chart support an upward continuation as the 20 SMA has extended its advance above the 100 and 200 SMAs, whilst technical indicators continue heading north, easing partially after reaching overbought readings.
Support levels: 1,236.80 1,230.10 1,223.15
Resistance levels: 1,249.25 1,255.60 1,263.80
WTI CRUDE
Crude oil prices resumed their declines after a failed attempt to regain the 50.00 threshold, with West Texas Intermediate futures settling at $48.29 a barrel. The commodity has been undermined by oversupply concerns for over two weeks already, whilst this latest decline can be attributed to diminishing hopes that the OPEC will extend its output cut, as half-way into it is proving useless. Ahead of the release of US stockpiles data, the daily chart for the black gold shows that selling interest once again contained the advance around the 200 DMA, while technical indicators have resumed their declines within bearish territory, maintaining the risk towards the downside. In the 4 hours chart, the 20 SMA gains bearish momentum above the current level, whilst technical indicators have decelerated their bearish strength within negative territory, but support further declines anyway, as the RSI indicator heads south around 36.
Support levels: 48.00 47.30 46.65
Resistance levels: 49.20 49.75 50.50
DJIA
Wall Street had its worst day since last October, with the Dow Jones Industrial Average plummeting 237 points or 1.14%, to end the day at 20,668.01, its lowest in a month. The Nasdaq Composite set an all-time high after the opening, but closed the day 107 points lower at 1.2%, while the S&P shed 29 points to 2,344.02. The decline was led financial and industrial equities, disappointed by absence of news on Trump’s promised policies. The decline was exacerbated by Fed’s Kashkari comments, who suggested that the Central Bank could rise rates just by 0.75% more to reach its comfort neutral level. Within the Dow, only Coca Cola that added 0.76% and Chevron, up 0.35% closed in the green. Goldman Sachs led decliners, shedding 3.77% and followed by Caterpillar that closed 3.11% lower. From a technical point of view, the daily chart presents a strong bearish stance now, with the benchmark settling near its daily low, and breaking well below its 20 DMA, whilst technical indicators have entered bearish territory with sharp downward slopes. In the 4 hours chart the benchmark settled below its 200 SMA the immediate resistance at 20,686, while technical indicators turned flat within oversold levels, reflecting the sudden decrease in volume after the close rather than suggesting the index won’t fall further.
Support levels: 20,654 20,610 20,574
Resistance levels: 20,686 20,732 20,783
FTSE 100
The FTSE 100 closed the day at 7,378.34, down 51 points or 0.69%, weighed by a strong Pound that soared after the release of UK inflation data which rose much more than expected. Mining related equities were the worst performers, although Fresnillo led gainers, up by 1.64%, followed by industrial BNZL that added 1.28%. Fresnillo advanced, despite Goldman Sachs reaffirmed its sell rating on the company, underpinned by gold’s rally. Glencore was the worst performer, down 4.24%, followed by Rio Tinto that shed 4.12% and BHP Billiton that closed down 3.97%. The benchmark fell further in after-hours trading, tracking Wall Street’s decline, heading into Asian opening at 7,348, is lowest for the week. Technically, the daily chart shows that the index is pressuring its 20 DMA, while technical indicators have turned sharply lower with the Momentum crossing its mid-line and the RSI indicator currently at 52. In the 4 hours chart, technical indicators head sharply lower, now approaching oversold readings, whilst the benchmark broke below a now flat 20 SMA. The immediate support comes at 7,331, past week low, with a break below it opening doors for a steeper slide towards 7,262, March 9th daily low.
Support levels: 7,331 7,294 6,262
Resistance levels: 7,367 7,400 7,439
DAX
The German DAX fell 90 points or 0.75%, to end the day at 11,962.13. European equities fell after a solid start to the day triggered by the French presidential debate, weighed by the negative tone of their American counterparts. Within the DAX, only 3 components closed higher, with Deutsche Bank up 3.45%, Commerzbank adding 0.35% and Bayerische Motoren Werke gaining 0.30%. The decline was led by Fresenius Medical Care which lost 3.51%, followed by Deutsche Lufthansa that shed 3.38%. The decline continued after the London’s close, with the DAX now trading some 50 points below its close, and poised to extend its slide, given that in the daily chart, the benchmark broke below its 20 DMA for the first time since early February, whilst technical indicators head sharply lower, having entered negative territory. In the shorter term, and according to the 4 hours chart, the benchmark slide extended below the 20 and 100 SMAs, whilst technical indicators pared their decline near oversold territory, but continue favoring a downward extension.
Support levels: 11,895 11,857 11,811
Resistance levels: 11,947 11,987 12,039
