EUR/USD: Risk appetite led the way this Wednesday

EUR/USD

Risk appetite led the way this Wednesday, triggered by Chinese data released overnight which lifted hopes that the economy is finally stabilizing, as exports, in USD terms, rose by 11.5% in March whilst exports fell less than expected, down by 7.6%, resulting in a trade surplus of $29.86B, down from $32.59B in February. Asian equities soared, with European and American indexes following the lead. Safehaven assets suffered the most, whilst commodities also dropped on the back of oil's slide, all of which supported the greenback's rally. In the data front, Industrial production in the EU declined by 0.8% in February, while January’s growth was revised down to 1.9%, weighing on the common currency. As for the US, data also disappointed, with retail sales unexpectedly falling in March by 0.3% and the Producer Price Index for final demand down by 0.1%. The EUR/USD pair plummeted to a fresh 2week low of 1.1271, and trades below the base of its previous range, where selling interest capped the recovery that followed US poor macro releases, indicating that the decline may extend further during the upcoming sessions, although the possible extension of this current bearish correction is not yet clear. So far, the 4 hours chart supports some additional declines, as the technical indicators have barely lost downward strength near oversold territory, whilst the price develops now well below a mild bearish 20 SMA. The immediate support comes at 1.1245, and a break below it could see the pair extending its decline down to 1.1120/60, a major support region, in where buying interest should resume to deny a longer lasting decline.

Support levels: 1.1245 1.1200 1.1160

Resistance levels: 1.1335 1.1380 1.1420

 

GBP/USD

The GBP/USD pair erased all of its Tuesday gains and fell down to 1.4191 on broad dollar's strength and the absence of macroeconomic data in the UK. Nevertheless, the Pound was among the best performers against the greenback, as the pair has roughly gave back some 60 pips on the day. The BOE will have its monthly economic policy meeting this Thursday, but it's hardly expected to change its ongoing policy. If something, focus will turn in comments about the possible risk of a Brexit. In the meantime the 1 hour chart for the pair shows that the price developed below a now bearish 20 SMA, whilst the technical indicators lack directional strength, but hold within bearish territory, suggesting the pair may slip further during the upcoming sessions. In the 4 hours chart, the Momentum indicator has crossed below its 100 line with a strong bearish slope whilst the RSI indicator hovers in neutral territory and the price stands a few pips below a bullish 20 SMA, all of which increases chances of a downward continuation, particularly on a downward acceleration below the mentioned daily low.

Support levels: 1.4190 1.4150 1.4110

Resistance levels: 1.4240 1.4285 1.4330

 

USD/JPY

The Japanese yen fell for second day inarow against the greenback, as positive Chinese data and soaring worldwide stocks, forced investors to profit from the recent rally in the JPY. The USD/JPY pair rallied up to 109.39 daily basis, as disappointing US data played against the greenback. The pair has spent most of the American session consolidating between the mentioned high an 109.00, maintaining a short term positive tone, although with a decreasing upward momentum due to this latest ranging. The 1 hour chart shows that the price extended further after recovering above its 100 SMA late Tuesday, while the technical indicators hold well above their midlines, but with no directional bias. In the same time frame, the 200 SMA offers an immediate resistance around 109.50, and a break above it will imply a continued advance towards the 110.00 figure and beyond. In the 4 hours chart, the Momentum indicator turned south in overbought territory, but the RSI holds near 60, limiting the risk of a downward move for this Thursday. Nevertheless, the long term picture is still bearish, as it will take a recovery beyond 110.60 to support a steadier recovery in the pair.

Support levels: 108.90 108.40 107.95

Resistance levels: 109.50 110.00 110.45

 

GOLD

Gold turned south this Wednesday, as stocks rallied on the back of better than expected economic data out of China fueling risk appetite and boosting the greenback. After advancing for four days inarow, spot ended the day around $ 1,244.00 a troy ounce, down by over $20.00 from the weekly high set at 1,262.62. The daily chart shows that the mentioned high matches the one set on February 11th, establishing the second shoulder of a HandS figure, whilst the neckline stands around 1,200/205.00, the level to break lower to complete the mentioned figure, which has long term bearish implications, as it will suggest an approach to the 1,100.00 region. In the same chart, the technical indicators have turned south, but remain above their midlines, whilst the 20 SMA stands around 1,232.70. Shorter term and according to the 4 hours chart, the bias is towards the downside, as the technical indicators head sharply lower within negative territory, whilst the price continues sliding below its 20 SMA, now around 1,250.60.

Support levels: 1,232.70 1,223.05 1,214.60

Resistance levels: 1,250.60 1,262.60 1,271.90

 

WTI CRUDE

Crude oil prices retreated from fresh year to date highs, after the US Energy Information Administration reported a 6.6 million barrel climb in crude oil stockpiles for the week ended April 8. Late Tuesday, the American Petroleum Institute reported a 6.2 million barrel increase, well above market's estimate of a 1.9 million barrels increase in crude inventories. West Texas Intermediate crude oil futures rallied up to $42.39 before settling around 41.60, and the daily chart shows that the commodity ended the day flat. Also, the commodity remains well above its moving averages, while the technical indicators have lost upward strength, but hold within positive territory, limiting chances of a downward move. In the 4 hours chart, the 20 SMA maintains a strong bullish slope below the current level, offering an immediate support at 40.80 whilst the technical indicators retreated partially from overbought readings.

Support levels: 41.25 40.80 40.20

Resistance levels: 42.30 42.90 43.60

 

DAX

European stocks extended their winning streak for a fourth consecutive session, as Chinese strong trade balance figures reduced fears of a continued global economic slowdown. The German DAX soared to close the day at 10,026.10, up by 271 points, underpinned by the strong positive mood among local investors, and in spite of tepid EU industrial production data. According to official data, EU Industrial Production, declined by 0.8% MoM vs. the 0.7% expected, while year on year the Industrial Production rose by 0.8% against the 1.3% expected. Back above 10,000, the daily chart shows that the index is currently aiming to advance beyond its 100 DMA, having been below it since January 4th. Also, and in the same chart, the technical indicators are crossing their midlines towards the upside, all of which increases chances of a stronger advance, particularly on an upward acceleration beyond 10,118, March high. In the shorter term, the 4 hours chart shows that the technical indicators have lost upward strength near oversold territory, with only the Momentum retreating at the time being. All in one, the upside is favored, although failure to sustain gains above the 10,000 figure could imply a strong downward move during the upcoming weeks.

Support levels: 9,996 9,918 9,834

Resistance levels: 10,042 10,118 10,196

 

DOW JONES

Wall Street was boosted by market's optimism, which sent the DJIA and the SandP to fresh year to date highs. The Dow added 187 points to close at 17,908.28, while the Nasdaq advanced 1.55% to end at 4,947.42 and the S and P added 20 point to 2,082.42. Better than expected results from J.P. Morgan Chase and Co., fueled the advance, as the bank added 4.2% after reporting a $1.35 earn per share, beating the average estimate of $1.26. Total revenue fell by 3.0% to $24.08 billion, but beat the average estimate of $23.40 billion. Steady around the close, the DJIA daily chart presents a clear bullish tone, as the technical indicators present neat bullish slopes within positive territory, as the index rallied further above its 20 SMA. In the 4 hours chart, the technical indicators maintain strong upward slopes, despite being in overbought territory, whilst the 20 SMA turned higher and recovered above its 100 SMA, with the shortest now around 17,675.

Support levels: 17,874 17,814 17,723

Resistance levels: 17,935 18,010 18,095

 

FTSE 100

The FTSE 100 gathered momentum and extended to a fresh yearly high, adding 1.93% or 122 points this Wednesday to close at 6,362.89. The rally was underpinned by positive data coming from China, and given that the country is among the world's largest consumer of basic resources, the commodity related sector benefited the most, leading the way higher. Anglo American was the biggest winner by adding 11.05%, followed by Rio Tinto, up by 7.6%. The energy related sector also edged higher, despite oil's decline, with Glencore up 6.7%. Daily basis, the FTSE 100 is poised to extend its advance, as the technical indicators have accelerated higher within bullish territory, whilst the index is now far above its moving averages. In the 4 hours chart, the technical indicators have turned flat in oversold territory, rather reflecting the lack of volume at the time being than suggesting upward exhaustion, whilst the 20 SMA has gained a nice bullish slope below the current level, also in line with further advances.

Support levels: 6,346 6,301 6,243

Resistance levels: 6,390 6,447 6,488