EUR/USD

The ECB delivered and more, but the announcement of a multifront extension of the financial stimulus backfired on Draghi's face, as the common currency plummeted to 1.0821 against the greenback with the news, only to soar beyond 1.1200 mid American afternoon. The ECB decided to cut rates across the board, leaving the main benchmark at 0.0% from previous 0.5%, and cutting the deposit rate by 10bp as expected, down to 0.4%. Also, QE was expanded to €80bn per month starting in April, with the eligible collateral was expanded to include investment grade euro denominated non bank corporate bonds, and new four year TLTROs were added. The Central Bank also downgraded its growth and inflation forecasts, sending 2016 inflation expectations to 0.1% from previous 1.0%. But after the press conference and within the Q and A, Draghi added that the Government Council sees no need for further rates cuts from here. The comment saw the pair reversing its rally, but also stocks plummeting to fresh monthly lows in Europe, and the EUR/USD topping out at 1.1217 in the American afternoon. Although the initial tough could be that the market overreacted, the fact is that Mario has fired all of its bullets, pretty much promising ad eternum QE, and no more rate cuts. And speculators have run to price it in, particularly considering recent dollar's weakness. The EUR/USD pair retreated partially from its highs, but holds near the 1.1200 region, as seems poised to continue advancing, now as long as buying interest surges in pullbacks towards the 1.1120 level. Intraday technical readings are in extreme overbought territory, but more relevant, the pair has breached the 61.8% retracement of its latest daily slide around 1.1160, the immediate support, while trading above its 100 and 200 DMAs. 1.1245 is the level to watch as a break above it can see the pair rallying up to 1.1460 a major long term resistance during the upcoming days.

Support levels:1.1160 1.1120 1.1080

Resistance levels: 1.1245 1.1285 1.1335

EURUSD


GBP/USD

The GBP/USD pair fell down to 1.4117 on the back of dollar's rally post ECB announcement, but managed to recover towards a fresh 3week high of 1.4316 as the American currency resumed its slide. Pound had no life of its own this Thursday, as the macroeconomic calendar remained empty in the UK, for the most, replicating EUR/USD behavior within a narrower range. On Friday, the United Kingdom will release its January trade balance figure, with a larger deficit expected, and the Consumer Inflation expectations, latest at 2.0%. Better than expected readings can push the pair higher, leaving it poised to test the 1.4500 mark next week. Short term, the 1 hour chart shows that the price is well above a bullish 20 SMA, but that the technical indicators are retreating partially from near overbought territory, still well into positive territory. In the 4 hours chart, the price is holding above the 200 EMA for the first time since early February, while the technical indicators have recovered above their midlines, back lack enough upward momentum to confirm further gains at this point. An advance beyond 1.4335 however, will likely confirm an upward continuation, with Friday's target at 1.4410.

Support levels: 1.4240 1.4190 1.4150

Resistance levels: 1.4335 1.4370 1.4410

GBPUSD


USD/JPY

The USD/JPY pair rallied up to a fresh weekly high of 114.44, as the dollar got benefited from the ECB's decision of implementing several different measures to boost local growth and inflation. The advance was also supported by improved US data, as weekly unemployment rates dropped to a 5month low of 259K in the week ended March 4th, well below the 275K expected. But the pair turned south as stocks trimmed daily gains and fell deep in the red, shedding over 150 pips from the mentioned high. Now trading below the 113.00 figure, the technical picture has been barely affected by all this noise, retaining the dominant bearish trend. Short term, and according to the 1 hour chart, the pair can continue falling during the upcoming hours, given that the price is well below the 100 and 200 SMAs after a short lived advance beyond them, while the technical indicators remain near oversold territory, having partially lost their bearish slopes. In the 4 hours chart, the technical indicators have turned lower, and are currently crossing their midlines towards the downside, supporting additional declines particularly on a break below 112.10.

Support levels: 112.50 112.10 111.65

Resistance levels: 113.10 113.50 114.00

USDJPY


GOLD

Gold recovered its shine, erasing all of its previous two days' losses, with spot hovering near $ 1,273.00 a troy ounce by the end of the US session. The commodity suffered a short lived kneejerk down to 1,236.95 following the aggressive monetary stimulus announced by the ECB, only to reverse towards its recent multi month highs tracking the common currency's uturn. Buying on dips continues to be the name of the game around the commodity, and the daily chart shows that the price has bounced after briefly sliding below a sharply bullish 20 DMA around 1,239.50. The underlying bullish trend remains in place, given that the technical indicators hold within bullish territory, with the RSI indicator advancing around 67. In the 4 hours chart, the price is currently developing above a horizontal 20 SMA after testing the 100 SMA earlier in the day, while the Momentum indicator turned flat right below its 100 level and the RSI indicator maintains a tepid upward slope around 63, favoring additional gains, despite the current lack of strength.

Support levels: 1,265.10 1,258.90 1,239.50

Resistance levels: 1,279.75 1,286.40 1,293.60

Gold


WTI CRUDE

Oil prices settled lower on Thursday, albeit not far from the year highs posted late Wednesday, as investors lost faith in an output freeze, as the meeting between OPEC and non OPEC oil producers scheduled for this month, may not take place, given that Iran seems not willing to participate. While major oil producers pledged to take measures to prevent oil's prices from falling further, the fact is that if Iran refuses to take part on the freezing deal, the results will fall short of the desire outcome that is, to see the barrel closer to $50.00 a barrel. WTI crude oil futures however, held near $38.00 a barrel by the end of the day, maintaining the positive tone in the daily chart, as the price is well above its 20 an 100 DMAs while the Momentum indicator heads north at fresh highs near overbought territory. In the 4 hours chart, the price has briefly fell below a bullish 20 SMA, but is now a few cents above it, while the Momentum indicator holds flat around its 100 level and the RSI indicator is aiming to advance within positive territory, all of which pointing to a continued advance.

Support levels: 37.40 36.60 36.05

Resistance levels: 38.50 39.20 40.00

Crude Oil


DOW JONES

Wall Street ended the day pretty much flat, with the DJIA down 5 points to 16,995.13 reverting a triple digit intraday decline, the Nasdaq down to 4,662.16, and the SandP closing the day 0.02% higher at 1,989.57. Stocks suffered from lower oil prices and concerns over the economic future of the EU after Draghi announced more of what has not worked for the past two years, while saying that the Central Bank sees no need to cut rate further, and that he is not willing to take rates too low that they end up hurting banks. The Dow saw a strong intraday gain ahead of the announcement, and the daily chart shows that the index managed to close with a doji above its 200 SMA. Also in the same chart, the Momentum indicator heads higher above its 100 level, while the RSI consolidates near 63, showing no signs of an upcoming downward move. Shorter term, the 4 hours chart shows that the index is currently around a horizontal 20 SMA while the technical indicators have bounced some from their midlines, not yet confirming further gains, but in line with the longer term outlook.

Support levels: 16,915 16,835 16,761

Resistance levels: 17,049 17,105 17,174

Dow Jones


FTSE 100

The FTSE 100 lost 96 points to close at 6,047.87, pressured even before the ECB's chaotic outcome, on fears Iran may derail OPEC output freeze. The commodity related sector led the way lower, with BP losing 3.6% and Royal Dutch Shell 2.8%. The worst performer was Tullow Oil down 5.8%. Mining stocks were also affected, with Anglo American shedding 5.2% and Glencore 4.2%. From a technical point of view, the daily chart shows that the index has extended its decline below its 100 DMA, but so far is holding above a bullish 20 SMA around 6,037, whilst the technical indicators have turned back south, but for now hold within bullish territory, all of which suggests further slides are possible, but not yet confirmed. In the 4 hours chart, the technical outlook is bearish as the index is developing below a bearish 20 SMA while the Momentum indicator heads south below its 100 level and the RSI indicator consolidates around 41.

Support levels: 6,037 5,965 5,910

Resistance levels: 6,100 6,148 6,200

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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