GBP/USD
The Cable is crashing Monday on the news Britain is nationalizing Lloyd’s Bank. Additionally, it seems HSBC has considerable exposure in U.S. loans, hinting it will need further assistance from the British government. Hence, the Britain government is committing itself fully to unknown levels of toxic debt, meaning the BOE may have to print many more Pounds to account for the losses. This news has sent the GBP/USD tumbling below our 1st tier uptrend line and well below the psychological 1.40 level. The Cable is on the path to retest 2009 lows in a hurry. Should the currency pair reach 2009 lows intraday, we expect considerable support and a rally from these levels. However, the development is confirming our negative trend outlook on the Cable. The next important development will be whether the Cable can hold 2009 lows in the near-term. If the lows don’t hold, then we could witness the continuation of incredible near-term selling pressure. Fundamentally, we find resistances of 1.3777, 1.3805, 1.3844, and 1.3877. To the downside, we see supports of 1.3726, 1.3683, 1.3621, and 1.3585. The 1.40 level becomes a psychological barrier to the upside with 1.35 serving as a cushion to the downside. The GBP/USD is currently exchanging at 1.3764.
EUR/USD
The EUR/USD is selling off sharply on Monday, following the Pound and U.S. equities lower on the news Britain is nationalizing Lloyd’s bank. Furthermore, HSBC experienced a rapid selloff, signaling the financials are in for another wave of turmoil on a global front. This realization alone is foreboding that the major EU banks will experience similar troubles. With the ECB holding its benchmark at relatively high levels compared to the Fed and BOE, investors are speculating the ECB will need to lower rates closer to zero as well. Encouragingly, the EUR/USD is catching itself above February and March lows, rescuing the currency from a traumatic selloff for the time being. However, if the March lows are breached we could be in for a fire-sale towards 1.20. Fundamentally, we maintain our support of 1.2549 with fresh 2nd tier and bottom-end supports resting at 1.2571 and 1.2479, respectively. To the topside, find resistance at 1.2634 with 2nd tier and top-end hanging at 1.2677 and 1.2730, respectively. The EUR/USD is currently exchanging at 1.2565.
USD/JPY
The USD/JPY is rallying Monday morning, bucking its positive correlation with U.S. equities. The new negative correlation between the two continues to be confirmed with investors judging the currencies based on the comparative economic strength of Japan and the U.S. With the Carry Trade unwound, running to the Yen as a ‘safe haven’ is over. Even though the U.S. economy is crumbling, the Japanese economy is worse off. Today Japan released a discouragingly low Current Account Surplus, revealing Japanese exports are deteriorating faster than expected. Lower exports spells more trouble for Japan’s manufacturing base. However, keep in mind a depreciating Yen is great news for beleaguered Japanese exports, and could help improve the demand picture for the time being. Therefore, it will be interesting to see if the USD/JPY peaks in the near-term should the U.S. economy deteriorate and the Japanese economy show signs of improvement. One thing is for certain, our 3rd tier downtrend line and the psychological 100 area will pose a formidable challenge to the upside. Fundamentally, we find resistances of 99.05, 99.96, 100.69 and 101.47. To the downside, we see supports of 98.25, 97.66, 97.22, and 96.59. The USD/JPY is currently exchanging at 98.95.
Crude Oil
Crude futures continued their impressive rise on Friday as investors are pricing in another supply cut from OPEC at their March 15th meeting. Setting new March highs, crude futures are now approaching February highs. While February highs and the psychological $50/bbl pose a hefty near-term struggle, if the futures can manage to break through these obstacles we should see some serious gains. However, there still is a considerable downtrend at hand. Therefore, despite increasing supply cuts from OPEC, the demand side of the equation may be too much to overcome. The OPEC cuts are having their desired impact thus far. Crude surpluses are declining again and the recent rise of U.S. crude is reducing the incentive of Contago. The U.S. won’t be releasing any significant economic data until Thursday, giving Crude time to rally between now and weekly Crude Oil Inventories. Fundamentally, we find supports of $45.72/bbl, $45.09/bbl, $44.59/bbl, and $43.77/bbl. The $45/bbl level becomes a psychological cushion while $50/bbl serves as a key psychological barrier. To the topside, we see resistances of $46.59/bbl, $47.12/bbl, $47.85/bbl, and $48.64/bbl. Crude futures are currently trading at $45.79/bbl.
Gold
The recent rally in Gold has halted and the precious metal is declining Monday despite the S&P futures trading down pre-market. Despite the hesitation, Gold still has our 2nd tier uptrend for near-term to fall back on for the time being. The next week of trading in Gold should prove to be important trend wise. Gold is trying to recover from its mid-February to early-March selloff and continue its mid-term uptrend. However, considering February highs were below 2008 highs, Gold has the potential to dip back into a downtrend. We remain positive trend-wise unless Gold falls below our 1st and 2nd tier trend lines and the psychological $900/oz level. Fundamentally, we hold our resistances of $937.81/oz, $945.57/oz, $953.32/oz and $959.84/oz. To the downside, we maintain our supports of $930.76/oz, $925.09/oz., $918.58/oz., and $910.33/oz. Gold is currently trading at $935.20/oz.
S&P
The S&P futures are set to open lower again on Monday with the S&P futures trading in the red pre-market. Friday’s late session rally was encouraging in the fact that investors are starting to bite on oversold conditions, signs of a new bottom coming. However, a high level of uncertainty is still swirling around the financial world and the problems that plagued equities last week remain unanswered. While the U.S. won’t report any significant economic data until Thursday, the week is filled with keynote speeches from members of the Fed and Treasury. Hence, while it looks like the S&P is under more near-term selling pressure, if the government can issue a plan regarding the major banks and car manufacturers currently priced for bankruptcy, this action could be the start of a new bottom followed by base building. Therefore, even if the S&P sells off again on Monday, we expect a furious rally coming this week. The Pound is presently crashing against the Dollar following large losses in HSBC and Britain nationalizing Lloyd’s Bank, a negative sign for U.S. equities. Meanwhile, Crude is selling off Monday morning and the 30 Year T-Bond futures appear primed for a pop. Hence, the correlations are confirming another downwards movement in the S&P futures. Fundamentally, we find resistance of 681.5 with additional resistances hanging at 687.75, 696.75, and 702.75. The 700 level will serve as a key psychological barrier for the near-term. To the downside, we see support of 670.75 with 2nd tier waiting at 665. We can’t find any other near-term supports, usually a negative sign. The next psychological cushion should be just above 650. The S&P futures are currently trading at 677.25.
30 Year
The 30 Year T-Bond futures sold off on Friday as U.S. equities posted a late day rally. However, it appears Friday’s downturn was merely profit taking. The 30 Year futures found support on our 127.8125 level and are edging up Monday with the S&P futures looking to close lower. While the 30 Year futures are wedged between our uptrend and 2nd tier downtrend lines, they could be choosing the upside with no bottom in sight yet for U.S. equities. If the 30 Year futures can rise above February highs, then we anticipate strong near-term gains. Meanwhile, the futures have built a solid base from the trading range over the past 5 weeks. Therefore, the 30 Year futures have some reliable support if things should turn south. Fundamentally, our 128.5156 support becomes resistance while we maintain our additional resistances of 129.3125, 129.891, and 130.375. To the downside, we hold our supports of 127.8125 and 127.4219 with fresh bottom-end support of 126.7813. The 30 Year Treasury Bond futures are currently trading at 128 14.5.
The Cable is crashing Monday on the news Britain is nationalizing Lloyd’s Bank. Additionally, it seems HSBC has considerable exposure in U.S. loans, hinting it will need further assistance from the British government. Hence, the Britain government is committing itself fully to unknown levels of toxic debt, meaning the BOE may have to print many more Pounds to account for the losses. This news has sent the GBP/USD tumbling below our 1st tier uptrend line and well below the psychological 1.40 level. The Cable is on the path to retest 2009 lows in a hurry. Should the currency pair reach 2009 lows intraday, we expect considerable support and a rally from these levels. However, the development is confirming our negative trend outlook on the Cable. The next important development will be whether the Cable can hold 2009 lows in the near-term. If the lows don’t hold, then we could witness the continuation of incredible near-term selling pressure. Fundamentally, we find resistances of 1.3777, 1.3805, 1.3844, and 1.3877. To the downside, we see supports of 1.3726, 1.3683, 1.3621, and 1.3585. The 1.40 level becomes a psychological barrier to the upside with 1.35 serving as a cushion to the downside. The GBP/USD is currently exchanging at 1.3764.
EUR/USD
The EUR/USD is selling off sharply on Monday, following the Pound and U.S. equities lower on the news Britain is nationalizing Lloyd’s bank. Furthermore, HSBC experienced a rapid selloff, signaling the financials are in for another wave of turmoil on a global front. This realization alone is foreboding that the major EU banks will experience similar troubles. With the ECB holding its benchmark at relatively high levels compared to the Fed and BOE, investors are speculating the ECB will need to lower rates closer to zero as well. Encouragingly, the EUR/USD is catching itself above February and March lows, rescuing the currency from a traumatic selloff for the time being. However, if the March lows are breached we could be in for a fire-sale towards 1.20. Fundamentally, we maintain our support of 1.2549 with fresh 2nd tier and bottom-end supports resting at 1.2571 and 1.2479, respectively. To the topside, find resistance at 1.2634 with 2nd tier and top-end hanging at 1.2677 and 1.2730, respectively. The EUR/USD is currently exchanging at 1.2565.
USD/JPY
The USD/JPY is rallying Monday morning, bucking its positive correlation with U.S. equities. The new negative correlation between the two continues to be confirmed with investors judging the currencies based on the comparative economic strength of Japan and the U.S. With the Carry Trade unwound, running to the Yen as a ‘safe haven’ is over. Even though the U.S. economy is crumbling, the Japanese economy is worse off. Today Japan released a discouragingly low Current Account Surplus, revealing Japanese exports are deteriorating faster than expected. Lower exports spells more trouble for Japan’s manufacturing base. However, keep in mind a depreciating Yen is great news for beleaguered Japanese exports, and could help improve the demand picture for the time being. Therefore, it will be interesting to see if the USD/JPY peaks in the near-term should the U.S. economy deteriorate and the Japanese economy show signs of improvement. One thing is for certain, our 3rd tier downtrend line and the psychological 100 area will pose a formidable challenge to the upside. Fundamentally, we find resistances of 99.05, 99.96, 100.69 and 101.47. To the downside, we see supports of 98.25, 97.66, 97.22, and 96.59. The USD/JPY is currently exchanging at 98.95.
Crude Oil
Crude futures continued their impressive rise on Friday as investors are pricing in another supply cut from OPEC at their March 15th meeting. Setting new March highs, crude futures are now approaching February highs. While February highs and the psychological $50/bbl pose a hefty near-term struggle, if the futures can manage to break through these obstacles we should see some serious gains. However, there still is a considerable downtrend at hand. Therefore, despite increasing supply cuts from OPEC, the demand side of the equation may be too much to overcome. The OPEC cuts are having their desired impact thus far. Crude surpluses are declining again and the recent rise of U.S. crude is reducing the incentive of Contago. The U.S. won’t be releasing any significant economic data until Thursday, giving Crude time to rally between now and weekly Crude Oil Inventories. Fundamentally, we find supports of $45.72/bbl, $45.09/bbl, $44.59/bbl, and $43.77/bbl. The $45/bbl level becomes a psychological cushion while $50/bbl serves as a key psychological barrier. To the topside, we see resistances of $46.59/bbl, $47.12/bbl, $47.85/bbl, and $48.64/bbl. Crude futures are currently trading at $45.79/bbl.
Gold
The recent rally in Gold has halted and the precious metal is declining Monday despite the S&P futures trading down pre-market. Despite the hesitation, Gold still has our 2nd tier uptrend for near-term to fall back on for the time being. The next week of trading in Gold should prove to be important trend wise. Gold is trying to recover from its mid-February to early-March selloff and continue its mid-term uptrend. However, considering February highs were below 2008 highs, Gold has the potential to dip back into a downtrend. We remain positive trend-wise unless Gold falls below our 1st and 2nd tier trend lines and the psychological $900/oz level. Fundamentally, we hold our resistances of $937.81/oz, $945.57/oz, $953.32/oz and $959.84/oz. To the downside, we maintain our supports of $930.76/oz, $925.09/oz., $918.58/oz., and $910.33/oz. Gold is currently trading at $935.20/oz.
S&P
The S&P futures are set to open lower again on Monday with the S&P futures trading in the red pre-market. Friday’s late session rally was encouraging in the fact that investors are starting to bite on oversold conditions, signs of a new bottom coming. However, a high level of uncertainty is still swirling around the financial world and the problems that plagued equities last week remain unanswered. While the U.S. won’t report any significant economic data until Thursday, the week is filled with keynote speeches from members of the Fed and Treasury. Hence, while it looks like the S&P is under more near-term selling pressure, if the government can issue a plan regarding the major banks and car manufacturers currently priced for bankruptcy, this action could be the start of a new bottom followed by base building. Therefore, even if the S&P sells off again on Monday, we expect a furious rally coming this week. The Pound is presently crashing against the Dollar following large losses in HSBC and Britain nationalizing Lloyd’s Bank, a negative sign for U.S. equities. Meanwhile, Crude is selling off Monday morning and the 30 Year T-Bond futures appear primed for a pop. Hence, the correlations are confirming another downwards movement in the S&P futures. Fundamentally, we find resistance of 681.5 with additional resistances hanging at 687.75, 696.75, and 702.75. The 700 level will serve as a key psychological barrier for the near-term. To the downside, we see support of 670.75 with 2nd tier waiting at 665. We can’t find any other near-term supports, usually a negative sign. The next psychological cushion should be just above 650. The S&P futures are currently trading at 677.25.
30 Year
The 30 Year T-Bond futures sold off on Friday as U.S. equities posted a late day rally. However, it appears Friday’s downturn was merely profit taking. The 30 Year futures found support on our 127.8125 level and are edging up Monday with the S&P futures looking to close lower. While the 30 Year futures are wedged between our uptrend and 2nd tier downtrend lines, they could be choosing the upside with no bottom in sight yet for U.S. equities. If the 30 Year futures can rise above February highs, then we anticipate strong near-term gains. Meanwhile, the futures have built a solid base from the trading range over the past 5 weeks. Therefore, the 30 Year futures have some reliable support if things should turn south. Fundamentally, our 128.5156 support becomes resistance while we maintain our additional resistances of 129.3125, 129.891, and 130.375. To the downside, we hold our supports of 127.8125 and 127.4219 with fresh bottom-end support of 126.7813. The 30 Year Treasury Bond futures are currently trading at 128 14.5.
