EUR/USD
Following a consolidative stage that extended during the first half of the day, the EUR/USD extended its monthly advance up to 1.824 after the US opening, as the dollar got dragged lower by poor US data and falling equities. The EUR/USD pair however, was unable to hold on to gains, and closed the day pretty much flat a few pips above the 1.0800 level. Risk aversion was again the main theme leading the markets, as following Wednesday’s equities slump, a terrorist incident took place near the UK Parliament with at least two people dead.
In the data front, the EU released a minor report, the its current account for January, which recorded a surplus of €24.1 billion, below market’s expectations, and December result, this last revised lower to €30.8B. In the US, sales of existing homes fell by 3.7% in February, at a 5.48 million seasonally adjusted annual rate, below previous 5.69M and expectations of 5.58M. Also, Fed’s Kaplan hit the wires, reaffirming that the US Central Bank would need just two more rate hikes this year, and that policymakers will continue trimming its massive balance sheet gradually.
Despite still contained by a major Fibonacci resistance at 1.0820, the 50% retracement of the post-US election slide, the pair retains its bullish bias, at least technically, given that in the 4 hours chart, technical indicators have resumed their advances within positive territory after approaching their mid-lines, whilst 20 SMA maintains a sharp bullish slope below the current level. The pair peaked at 1.0828 last Friday, the level to surpass to confirm additional gains up to 1.0873, December monthly high. As long as the price holds above the 1.0700 region, bulls will remain in control of the pair.
Support levels: 1.0765 1.0730 1.0700
Resistance levels: 1.0830 1.0870 1.0910
USD/JPY
The USD/JPY pair trades at its lowest for this 2017 and not far from a daily low of 110.74, as risk aversion fueled demand for the safe-haven currency, exacerbated by the technical breakout of the 111.60 level earlier in the day. The pair plummeted at the beginning of the day after Wall Street’s sharp decline weighed on Asian equities, further weighed through the day by the continued weakness in US Treasury yields, with the 10-year note benchmark falling down 2.39% after closing on Tuesday at 2.44%. The decline paused during the Asian session, as the Japanese trade surplus surged to a multi-year high of ¥813.4 billion in February. Exports in the same month surged by 11.3%, beating expectations, albeit imports increased by just 1.2%, from previous 8.5% advance. The technical outlook is clearly bearish according to the 4 hours chart, with technical indicators heading sharply lower within extreme oversold territory, whilst the price has extended further below its 100 and 200 SMAs. A break below 110.70, the immediate support, should lead to a continued decline towards 109.90, the 50% retracement of the November/December rally.
Support levels: 110.70 110.30 109.90
Resistance levels: 111.15 111.60 112.00
GBP/USD
Despite multiple negative headlines coming from the UK, the GBP/USD pair managed to close the day flat around 1.2481. There were no macroeconomic releases in the UK, but Brexit jitters were at top of the list, as, ahead of the trigger of the Art. 50 next week, the EU and the UK are already engaged in a discussion. EU authorities are claiming a bill that can go up to £60 billion for different liabilities including UK’s share of pensions liabilities, loan guarantees and spending on UK-based projects, whilst UK government don’t recognize such debt, talking about a maximum payment of £2-3 billion. Also, the Scottish parliament was set to debate on a second independence referendum, but got suspended it in the wake of the Westminster terror attack. At least two people died in an incident at the Housed of Parliament, with a vehicle mowing down about a dozen pedestrians on London’s Westminster Bridge, before crashing into the Houses of Parliaments and stabbing a police officer being shot down. The GBP/USD pair bottomed at 1.2423 with the news, and slowly moved back higher to match its opening level. From a technical point of view, the risk remains towards the downside, given that the pair held above 1.2425, a major Fibonacci support, while in the 4 hours chart the price bounced sharply after flirting with a bullish 20 SMA. In the same chart, technical indicators have resumed their advances within positive territory, now nearing overbought territory, with scope to extend up to 1.2540, on a break above 1.2505, the daily high.
Support levels: 1.2460 1.2425 1.2390
Resistance levels: 1.2505 1.2540 1.2585
GOLD
Gold prices kept rallying this Wednesday, with spot reaching a fresh 1-month high of $1,25.24 a troy ounce, to settled around 1,249.75. The commodity advanced for a fifth consecutive day, backed by a decline in high-yielding assets, although gains were moderated considering the slump in worldwide equities. A weaker dollar alongside with falling yields and increasing risk aversion, supported the metal. From a technical point of view, the daily chart shows that technical indicators have extended their advances, maintaining their upward momentum now near overbought readings, whilst the price has settled above a still bearish 200 DMA for the first time since last October, supporting some further advances up to 1,263.79, February high. Shorter term, and according to the 4 hours chart the risk is also towards the upside, as technical indicators have resumed their advances within overbought territory, whilst the 20 SMA accelerated its advance below the current level, after surpassing the 100 and 200 SMAs.
Support levels: 1,244.50 1,236.80 1,230.10
Resistance levels: 1,251.30 1,263.80 1,272.80
WTI CRUDE
West Texas Intermediate crude oil futures fell down to $47.07 a barrel, following the US EIA stockpiles report, showing that crude inventories in the country rose by more than expected in the week ended March 17th, up by 4.954 million barrels, ringing total US crude oil inventories to 533.1 million barrels. The commodity bounced from the mentioned low, which was last seen in November, when the OPEC announced its output cut deal, and settled at $48.06 a barrel, down by 20 cents daily basis. The recovery was a consequence of persistent dollar’s weakness rather than positive news from the sector, implying that the risk of additional declines on US increasing production headlines remains high. From a technical point of view, the bearish strength remains intact according to the daily chart, with the price further below all of its moving averages, and technical indicators consolidating within oversold levels. In the 4 hours chart, WTI remains below a bearish 20 SMA, whilst technical indicators have managed to bounce from oversold readings, but remain well below their mid-lines, limiting chances of a steeper recovery.
Support levels: 47.70 47.00 46.40
Resistance levels: 48.30 48.90 49.50
DJIA
US indexes managed to pared losses, with Wall Street closing mixed after Tuesday’s slump. The Dow Jones Industrial Average closed at 20,661.30, down 6 points, whilst the Nasdaq Composite advanced 27 points and settled at 5,821.64 and the S&P also closed higher, up 4 points or 0.19%, to 2,348.45. The Dow was weighed by a sharp decline in industrials, with Nike leading losers, closing down 6.88%. Verizon Communications followed, but lost just 0.92%. The technology sector led the advance, with Microsoft up 1.1%, Apple adding 1.08% and Intel 0.98%. The DJIA established a fresh March low at 20,578, and the daily chart shows that it remains well below a now horizontal 20 DMA, whilst technical indicators have turned flat near oversold territory, not enough to suggest downward exhaustion. In the 4 hours chart, the bearish stance persists from a technical perspective, as indicators have resumed their declines within oversold territory, whilst the index was unable to recover above any of its moving averages, with the nearest being the 200 SMA at 20,707.
Support levels: 20,610 20,578 20,526
Resistance levels: 20,707 20,732 20,783
FTSE 100
The FTSE 100 extended its slide, shedding 53 points or 0.73%, to close at 7,324.72, as Wall Street’s Tuesday decline weighed on investors’ mood. Analysts blame the ongoing slump in equities to disappointment over US President Trump, as the promises made at the beginning of his mandate remained unfilled, particularly as the financial and industrial sectors were the worst performers these days. Within the Footsie, mining-related equities led gainers, with Antofagasta up 1.69%, followed by Anglo American that added 1.44% and Randgold Resources that closed 1.39% higher. In the losers’ list, Kingfisher shed 5.09%, while Standard Life closed 2.78% lower. The index recovered modestly after the cross, as Wall Street pared losses. Nevertheless, the daily chart shows that the index remains below its 20 DMA, while technical indicators hold below their mid-lines, although having lost their bearish strength. In the 4 hours chart, the technical setting favors the downside, as the 20 SMA has turned lower well above the current level, whilst technical indicators have resumed their declines near oversold levels.
Support levels: 7,294 7,262 7,239
Resistance levels: 7,367 7,400 7,439
DAX
European equities tracked losses from their overseas counterparts, with all of the major benchmarks closing in the red. The German DAX lost 57 points or 0.48% and closed at 11,904.12, as investors continued to unwind the so-called "Trump-trade." Volkswagen was the best performer, up 2.0%, followed by SAP that added 1.05%. Deutsche Boerse, on the other hand, led decliners, down 2.79%, and followed by Linde that closed 1.38% lower. From a technical point of view, the downward potential moderated, but is still present, given that in the daily chart, the index settled again below a now flat 20 SMA, but technical indicators lost bearish strength and stand horizontal right below their mid-lines. In the 4 hours chart, the German benchmark remained below its 20 and 100 SMAs, with the shortest gaining bearish strength above the largest, whilst technical indicators have recovered modestly from near oversold readings, but remain well below their mid-lines.
Support levels: 11,895 11,851 11,811
Resistance levels: 11,949 11,987 12,039
