EUR/USD

The dollar got selloff on Friday after a mixed US employment report showed a solid monthly job's gain, but also that wages plummeted, as hourly earnings fell by 0.1%, the first decline since December 2014, dragging the yearonyear gain pace to 2.2% from previous 2.5%. The headline reading printed 214K while January was revised up to 172K from the previous 151K. The news initially pushed the greenback higher, but investors then chose to drop the American currency, as soft data keeps pushing a possible US rate hike further away in time. The EUR/USD pair closed the week with solid gains around 1.1000, but the common currency's strength is limited ahead of the ECB's upcoming economic policy decision his Thursday. With the EU inflation in negative territory, the Central Bank is almost forced to act, as inaction seems not an option. Expectations are of a 1015bp cut in the deposit rate, but Draghi can be ready to surprise again, with a more dramatic announcement. Technically, the pair retreated on Friday from a daily high of 1.1042, a couple of pips above the 38.2% retracement of the decline between 1.1375 and 1.0862, a major static resistance region. Despite the weekly recovery, the price was unable to regain ground above the 200 DMA, around 1.1020, and the most likely scenario is that the pair will remain range bound ahead of the ECB, although the general technical picture favors the upside, as in the daily chart, the price is well above the 100 DMA, whilst the technical indicators have extended their advances further within bearish territory. In the shorter term, the 4 hours chart shows that the price has bounced sharply from a mild bullish 20 SMA, while the technical indicators have resumed their advances near overbought levels. Nevertheless, a strong continuation through the 1.1050 region is required to confirm further gains, up to 1.1120 this Monday.

Support levels: 1.0980 1.0950 1.0920

Resistance levels: 1.1050 1.1090 1.1120

EURUSD


GBP/USD

The British Pound advanced against the greenback for the past five days, surging up to 1.4247 on Friday, and closing the week a handful of pips below the level. Markets seem to have already digested the possibility of a Brexit, and most experts agree that, despite being unknown territory, it will be negatively in economic terms for the UK. Nevertheless, speculative selling was quite overdone ahead of the referendum, and the GBP/USD fell to the 1.3800 region, its lowest in almost six years. This latest recovery, was supported by a mixture of improvement market sentiment and profit taking, with the pair rallying up to a major static resistance at this 1.4250 price zone, in which further advances will likely see bulls retaining the driver's seat. From a technical point of view, the daily chart shows that the price has recovered above a still bearish 20 SMA, for the first time since mid February, and that the technical indicators have lost upward strength right below their midlines, suggesting some consolidation/short term downward correction for this Monday. In the 4 hours chart, the price is still below the 200 EMA, while the technical indicators have lost upward strength near overbought territory, in line with a limited downward corrective move.

Support levels: 1.4185 1.4140 1.4100

Resistance levels: 1.4250 1.4290 1.4330

GBPUSD


USD/JPY

The USD/JPY pair posted some limited gains during the past week, but retained the long term bearish dominant bias. The Japanese Yen held ground as risk aversion sentiment eased after China cut its reverse requirement ratio by 0.5% points at the beginning of the week, helping further to stabilize financial markets. But the world's second largest economy could well be the reason risk aversion trading resumes this week, as the country cut its 2016 growth forecast during the weekend, to a range of 6.5% to 7%, from the previous 7%. BOJ's Governor Kuroda is due to speak at the Yomiuri International Economic Society, in Tokyo at the beginning of the week, and any clue on upcoming measures would affect the currency. From a technical perspective, the daily chart shows that the price has managed to hold above the 23.6% retracement of the latest slump around 113.50, the immediate support, but that the price remains far below its moving averages, while the technical indicators are turning slightly lower below their midlines, all of which should keep the upside limited. In the 4 hours chart, the pair presents a neutral stance, as the technical indicators are hovering around their midlines, with no certain directional strength. The key resistance is the 115.05 level, the 38.2% retracement of the mentioned decline and the neckline of the double floor established around 111.00. It will take a clear recovery above it to see bears give up and indicate some further midterm gains.

Support levels: 113.50 113.10 112.70

Resistance levels: 114.25 114.60 115.05

USDJPY


GOLD

Gold surged to its highest in over a year on Friday, with spot posting a high of $1,279.75 a troy ounce as the greenback got selloff after a mixed employment report. Following two weeks of consolidation, the commodity surged sharply this past one, in line with the solid upward momentum that dominated the metal since late January. Daily basis, the pair closed with a doji, which may signal some downward upcoming movement, but given that the 20 SMA maintains a bullish slope below the current level, and that the technical indicators hover well above their midlines, the risk remains towards the upside. In the 4 hours chart, the price continues developing above a bullish 20 SMA, currently around 1,247.50, but the technical indicators have retreated from overbought levels, and head slightly lower within bullish territory. Overall, retracements will likely be seen as buying opportunities, down towards the 1,200 region, and as long as chances of a US rake hike keep being delayed by soft local data.

Support levels: 1,253.45 1,242.50 1,234.90

Resistance levels: 1,263.40 1,271.80 1,279.75

XAUUSD


WTI CRUDE

Crude oil prices kept rising, with WTI futures closing at the highest since January 5th, at $36.29 a barrel. Up by third week inarow, the commodity surged on Friday as the Baker Hughes report showed that the number of rigs drilling for crude in the US, dropped by eight in the past week to 392, the lowest in nearly six years. Additionally, last Thursday Nigeria's oil minister Emmanuel Kachikwu said that OPEC and non OPEC oil producers are going to meet in Russia next March 20th, to continue talks on freezing oil production, which should bring some further stability to oil's markets. WTI technical structure suggests that the black gold may continue rallying, as it closed Friday above its 100 DMA for the first time this year, while the RSI indicator keeps heading north around 64. The Momentum indicator in the same time frame diverges lower, but remains well above its 100 level. In the 4 hours chart, the price has consistently met buying interest around a bullish 20 SMA, currently around 34.90, while the Momentum indicator lacks directional strength and the RSI hovers around 73, all of which maintains the risk towards the upside.

Support levels: 35.70 34.90 34.20

Resistance levels: 36.35 37.10 37.90

WTI


DAX

European equities edged higher on Friday, with the DAX closing the day at 9,824.17, up by 72 points. The German benchmark advanced for a third consecutive week, as bund yields continued to plummet, with Deutsche Bank adding 2.13% and Lufthansa 4.24%. The index however, remains below the 10,000 level, a strong line in the sand, as investors will only consider adding more buying positions on a break above it. Additionally, the index has been trading steadily below its long term moving averages, with the 100 DMA currently at 10,213. The momentum indicator has turned sharply lower from overbought levels in the daily chart, while the RSI stands flat around 58, indicating limited upward potential at current levels. Shorter term, the 4 hours chart shows that the technical indicators head south within bullish territory, whilst the index extended its consolidative stage above its 200 SMA, now converging with the 20 SMA around 9,690. A break below this level should favor a downward continuation for this Monday, towards the 9,580 region, where the index has several intraday highs and lows.

Support levels: 9,690 9,635 9,580

Resistance levels: 9,837 9,924 10,000

DAX


DOW JONES

Wall Street closed up for a third consecutive day, although gains were modest, as the mixed US employment report fueled concerns over local economic growth. The Dow Jones Industrial Average added 62 points on Friday to close at 17,006.77, while the Nasdaq advanced 0.20% to end at 4,717.02, and the SandP added 6 points, to close at 1,999.99. Energyrelated stocks gained ground following oil's advance, and in general, market's positive mood have continued to improve. However, the fundamental background of depressed inflation and slow growth has not changed, and if fact, worsened according to the latest macro readings, which means stocks may revert their latest rally, on any additional sign of economic slowdown. From a technical point of view, the DJIA maintains the bullish tone in its daily chart, given that it has recovered above its 100 DMA, although the rally has been limited. In the same chart, the Momentum indicator has retreated from overbought readings, but remains well into positive territory, while the RSI indicator is aiming back north after some consolidation around 65. In the 4 hours chart, the technical indicators lack upward strength, but hold within bullish territory, while the 20 SMA has advanced further alongside with the index, now providing an immediate support around 16,909.

Support levels: 16,909 16,825 16,761

Resistance levels: 17,105 17,174 17,243

Dow


FTSE 100

The FTSE 100 added 1.13% or 69 points on Friday to close the day at 6,199.43, helped by the continued advance in mining related shares, which continued to rebound. Among the daily winners were Anglo American, up by 11%, and Glencore, which added 12% to its previous weekly gains, posting a whopping 25% weekly rise. However, most of this last three weeks gains has been based on some stability in China, which means the rally can be quickly reversed with more signs of economic slowdown coming from the country. Anyway, the index has managed to post a fresh high for this 2016 at 6,221, and the daily chart shows that the index held above its 100 DMA for a third consecutive day, while the RSI indicator heads slightly higher around 61, and the Momentum holds well above its midline, favoring some further gains for this week. Shorter term, the 4 hours chart shows that the technical indicators remain within positive territory, although lacking upward momentum. Also in this last time frame, the 20 SMA continues heading north below the current level, providing an immediate support around 6,142.

Support levels: 6,142 6,094 6,027

Resistance levels: 6,221 6,286 6,350

FTSE

The information set forth herein was obtained from sources which we believe to be reliable, but its accuracy cannot be guaranteed. It is not intended to be an offer, or the solicitation of any offer, to buy or sell the products or instruments referred herein. Any person placing reliance on this commentary to undertake trading does so entirely at their own risk.

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