EUR/USD
The EUR/USD rocketed higher with the Dollar weakening significantly against all major pairs in reaction to the Federal Reserve deciding to inject $300 Billion into quantitative easing. The quantitative easing plan requires massive money printing, increasing the U.S. money supply considerably. The Fed intended to make U.S. exports attractive, and the Fed clearly accomplished its intention. The EUR/USD has catapulted into a clear uptrend after the currency pair was still contemplating whether to duck back into its downtrend. Since the ECB has kept its benchmark rate at a reasonable level while avoiding quantitative easing of its own, the Euro is thriving after the Fed’s decision. However, Bernanke’s move places considerable pressure on the EU since German production and manufacturing levels were already falling off a cliff prior to America’s announcement. Now that the Euro is appreciating wildly against all of its major pairs, the development makes EU exports even less attractive, putting the economy in a tight corner. Therefore, we would not be surprised to see the ECB lower rates more than expected at its next meeting to try and cool the appreciation of the Euro. For the meantime, such a significant movement afterwards will create a lasting ripple effect and should continue its move higher despite any temporary profit taking it experiences. We placed three new uptrend lines on our chart to give investors an idea of upcoming trend obstacles. Fundamentally, we see supports of 1.3427, 1.3371, 1.3304, and 1.3238. To the topside, find fresh resistances of 1.3494, 1.3554, 1.3624, 1.3666, and 1.3724. The EUR/USD is currently exchanging at 1.3509.
GBP/USD
The Pound followed the pack of currencies appreciating against the Dollar in an accelerated fashion after the Federal Reserve opted to use quantitative easing to stabilize the U.S. economy. Although the Cable has made a large movement to the upside over the last 24 hours, its rise has not been as extreme as the EUR/USD since Britain is participating in quantitative easing of its own. Furthermore, we can’t forget the Britain released a staggering CCC number earlier this week. Hence, the Cable faces many more obstacles to the upside than the EUR/USD including February highs and the highly psychological 1.50 level. Regardless, the GBP/USD continues to sprint to the upside since the $300 Billion used in quantitative easing will weaken the Dollar considerably. Such a large monetary shock should have after-effects for at least a week, which bodes well for the Cable in the near-term. We placed a new uptrend line on our chart and the GBP/USD is sitting just below it right now. Fundamentally, we find resistances of 1.4424, 1.4505, 1.4554, and 1.4617. The 1.45 area will serve as a psychological barrier for the time being. To the downside, we see supports of 1.4370, 1.4310, 1.4255 and 1.4196. The GBP/USD is currently exchanging at 1.4435.
USD/JPY
The USD/JPY is sinking lower, making its long anticipated move outside of the March trading range. The Dollar is depreciating across the board after the Fed announced a shocking $300 Billion quantitative easing plan. However, the Yen is experiencing the least strength as compared to other major Dollar crosses since the Japanese economy is the weakest in the world right now and the BOJ has been initiating quantitative easing of its own. Nevertheless, investors are favoring the Yen over the Dollar due to the sheer mass of the Federal Reserve’s quantitative easing balance sheet. Now that the USD/JPY has finally made a directional decision, it’s safe to say the downtrend is back in full-force and the possible retest of 100 becomes a distant memory. The reinstatement of the downtrend strikes another blow to the Japanese economy just after the USD/JPY was beginning to stabilize and gain momentum upwards. However, there is a silver lining in the fact the USD/JPY is still fighting to remain above our near-term uptrend line. Fundamentally, we find resistances of 95.08, 95.64, 96.37, and 97.10. To the downside, we see supports of 94.57, 93.73, 93.06, and 92.39. The USD/JPY is currently exchanging at 94.16.
Crude Oil
Crude futures are logging fundamentally significant gains, ignoring the higher than expected inventory report. Crude futures have cleared the psychological $50/bbl mark as the Dollar depreciates across the board. Since OPEC values Crude in Dollars, a weakening Dollar makes Crude much more attractive to buyers. Additionally, investors are hoping the quantitative easing initiated by the Fed will help boost manufacturing and production and consequentially consumption of Crude. This is due to the fact that a weaker Dollar makes U.S. exports much more desirable to Dollar paired countries. With $50/bbl cleared, crude futures are now free to test January highs. Therefore, we could see the continuation of near-term gains, particularly if the S&P futures can bust through 800. Fundamentally, we find supports of $50.98/bbl, $50.53/bbl, $50.03/bbl, and $49.49/bbl. The $50/bbl becomes a psychological cushion. To the topside, we see resistances of $51.56/bbl, $52.09/bbl, $52.53/bbl, and $53.18/bbl. Crude futures are currently trading at $50.91/bbl.
Gold
Gold is surging after the Fed’s announcement of proceeding with a $300 Billion quantitative easing plan. Quantitative easing is weakening the Dollar extraordinarily, providing incredible upward momentum for gold. Once drifting back into its downtrend, gold has done a 360 overnight. The uptrend is back in full force and the precious metal is currently fighting to get back above the psychological $950/oz level. If gold should accomplish this feat, we expect to see the continuation of violent movements to the upside for the near-term. A retest of $1000/oz is no longer out of the question, and has suddenly become a reality. Such incredible directional movements have ripple effects so we expect the high volatility to continue for some time. A fundamental shift has taken place in gold and investors should take notice. Meanwhile, the precious metal is facing our 3rd tier uptrend line so we could see a little consolidation in the immediate future. Fundamentally we see resistances of $947.12/oz, $950.58/oz, $954.38/oz, and $957.84/oz. To the downside, find supports of $940.55/oz, $937.44/oz, $935.02/oz, and $931.56/oz. Gold is currently trading at $943.95/oz.
S&P
The S&P jumped yesterday but backed away from the highly psychological 800 level after the Fed announced a surprise injection of $300 Billion into a quantitative easing program. The actual announcement of quantitative easing was not entirely unexpected since Bernanke has left the window open as an avenue of last resort since December. It was the amount of money being injected which caught investors off-guard. The FX markets certainly took notice as the Dollar plunged against both the Euro and the Pound by extraordinary amounts. Additionally, we saw Gold fly, and naturally the U.S. Treasury futures experienced a huge pop. Sifting past all the headline data, we must ask ourselves what the Fed intended to achieve with such a decision. With the markets locked into trends across the board, we believe Bernanke and company saw that the only way to shift markets into America’s favor was to administer a giant monetary shock and hope key resistances were passed to override trends. Looking at how FX and commodity markets reacted, the move clearly accomplished its intention. The U.S. is hoping to boost manufacturing and production by weakening the Dollar to provide a monetary incentive for countries to increase their U.S. imports. Furthermore, the U.S. is appeasing China by dramatically boosting the price of Treasuries and showing America is committed to make U.S. debt a reliable investment for foreign countries. Though the S&P futures haven’t committed to a 800+ future yet, the indicie’s correlations sure have. Therefore, it seems the Fed has accomplished its goal for the time being. Such a large shock will have considerable aftershocks for the near-term, and we should see continued volatility over the next few weeks. Pundits are warning the U.S. runs the risk of hyperinflation in the future, warranting interest rate hikes down the road. However, this is a ways away, and we will have to see how the situation plays out over time. If the S&P futures can jump back over 800 we foresee clear sailing until the futures approach February highs. Fundamentally, we find resistance of 794.5 with additional resistances hanging at 804, 812.75, 818.75, and 829. To the downside, we see support of 788.75 with additional supports sitting at782.5, 775, and 765.25. The S&P futures are currently trading at 793.50.
30 Year
The 30 Year T-Bond futures posted incredible gains yesterday after the Federal Reserve decided to proceed with quantitative easing by injecting $300 Billion into U.S. Treasuries. Even though Bernanke stated the Fed will focus its accrual of Treasuries on the 5 and 10 Year Notes, the 30 Year was more than happy to participate in the incredible rally taking place. In succession, the 30 Year futures have been jolted out of their downtrend, and are looking to head back north in a hurry. The U.S. has taken care of the rising concern over excess supply to fund the government’s massive stimulus package. Furthermore, the Feds are appeasing China by reassuring the East that their investment in U.S. debt will be a secure one. Consequently, yields are dropping like a rock and it will be interesting to see if the movement translates into accelerated home purchases. The challenge for the 30 Year futures in the near-term will be climbing back into the January trading zone. If the futures are successful in doing so, we anticipate a retest of January highs. Fundamentally, we see resistance of 132.39 with additional resistances hanging at 132.98, 133.36, and 133.69. To the downside, we find supports of 131.92, 131.34, and 130.95. The 30 Year Treasury Bond futures are currently trading at 132 01.0.
The EUR/USD rocketed higher with the Dollar weakening significantly against all major pairs in reaction to the Federal Reserve deciding to inject $300 Billion into quantitative easing. The quantitative easing plan requires massive money printing, increasing the U.S. money supply considerably. The Fed intended to make U.S. exports attractive, and the Fed clearly accomplished its intention. The EUR/USD has catapulted into a clear uptrend after the currency pair was still contemplating whether to duck back into its downtrend. Since the ECB has kept its benchmark rate at a reasonable level while avoiding quantitative easing of its own, the Euro is thriving after the Fed’s decision. However, Bernanke’s move places considerable pressure on the EU since German production and manufacturing levels were already falling off a cliff prior to America’s announcement. Now that the Euro is appreciating wildly against all of its major pairs, the development makes EU exports even less attractive, putting the economy in a tight corner. Therefore, we would not be surprised to see the ECB lower rates more than expected at its next meeting to try and cool the appreciation of the Euro. For the meantime, such a significant movement afterwards will create a lasting ripple effect and should continue its move higher despite any temporary profit taking it experiences. We placed three new uptrend lines on our chart to give investors an idea of upcoming trend obstacles. Fundamentally, we see supports of 1.3427, 1.3371, 1.3304, and 1.3238. To the topside, find fresh resistances of 1.3494, 1.3554, 1.3624, 1.3666, and 1.3724. The EUR/USD is currently exchanging at 1.3509.
GBP/USD
The Pound followed the pack of currencies appreciating against the Dollar in an accelerated fashion after the Federal Reserve opted to use quantitative easing to stabilize the U.S. economy. Although the Cable has made a large movement to the upside over the last 24 hours, its rise has not been as extreme as the EUR/USD since Britain is participating in quantitative easing of its own. Furthermore, we can’t forget the Britain released a staggering CCC number earlier this week. Hence, the Cable faces many more obstacles to the upside than the EUR/USD including February highs and the highly psychological 1.50 level. Regardless, the GBP/USD continues to sprint to the upside since the $300 Billion used in quantitative easing will weaken the Dollar considerably. Such a large monetary shock should have after-effects for at least a week, which bodes well for the Cable in the near-term. We placed a new uptrend line on our chart and the GBP/USD is sitting just below it right now. Fundamentally, we find resistances of 1.4424, 1.4505, 1.4554, and 1.4617. The 1.45 area will serve as a psychological barrier for the time being. To the downside, we see supports of 1.4370, 1.4310, 1.4255 and 1.4196. The GBP/USD is currently exchanging at 1.4435.
USD/JPY
The USD/JPY is sinking lower, making its long anticipated move outside of the March trading range. The Dollar is depreciating across the board after the Fed announced a shocking $300 Billion quantitative easing plan. However, the Yen is experiencing the least strength as compared to other major Dollar crosses since the Japanese economy is the weakest in the world right now and the BOJ has been initiating quantitative easing of its own. Nevertheless, investors are favoring the Yen over the Dollar due to the sheer mass of the Federal Reserve’s quantitative easing balance sheet. Now that the USD/JPY has finally made a directional decision, it’s safe to say the downtrend is back in full-force and the possible retest of 100 becomes a distant memory. The reinstatement of the downtrend strikes another blow to the Japanese economy just after the USD/JPY was beginning to stabilize and gain momentum upwards. However, there is a silver lining in the fact the USD/JPY is still fighting to remain above our near-term uptrend line. Fundamentally, we find resistances of 95.08, 95.64, 96.37, and 97.10. To the downside, we see supports of 94.57, 93.73, 93.06, and 92.39. The USD/JPY is currently exchanging at 94.16.
Crude Oil
Crude futures are logging fundamentally significant gains, ignoring the higher than expected inventory report. Crude futures have cleared the psychological $50/bbl mark as the Dollar depreciates across the board. Since OPEC values Crude in Dollars, a weakening Dollar makes Crude much more attractive to buyers. Additionally, investors are hoping the quantitative easing initiated by the Fed will help boost manufacturing and production and consequentially consumption of Crude. This is due to the fact that a weaker Dollar makes U.S. exports much more desirable to Dollar paired countries. With $50/bbl cleared, crude futures are now free to test January highs. Therefore, we could see the continuation of near-term gains, particularly if the S&P futures can bust through 800. Fundamentally, we find supports of $50.98/bbl, $50.53/bbl, $50.03/bbl, and $49.49/bbl. The $50/bbl becomes a psychological cushion. To the topside, we see resistances of $51.56/bbl, $52.09/bbl, $52.53/bbl, and $53.18/bbl. Crude futures are currently trading at $50.91/bbl.
Gold
Gold is surging after the Fed’s announcement of proceeding with a $300 Billion quantitative easing plan. Quantitative easing is weakening the Dollar extraordinarily, providing incredible upward momentum for gold. Once drifting back into its downtrend, gold has done a 360 overnight. The uptrend is back in full force and the precious metal is currently fighting to get back above the psychological $950/oz level. If gold should accomplish this feat, we expect to see the continuation of violent movements to the upside for the near-term. A retest of $1000/oz is no longer out of the question, and has suddenly become a reality. Such incredible directional movements have ripple effects so we expect the high volatility to continue for some time. A fundamental shift has taken place in gold and investors should take notice. Meanwhile, the precious metal is facing our 3rd tier uptrend line so we could see a little consolidation in the immediate future. Fundamentally we see resistances of $947.12/oz, $950.58/oz, $954.38/oz, and $957.84/oz. To the downside, find supports of $940.55/oz, $937.44/oz, $935.02/oz, and $931.56/oz. Gold is currently trading at $943.95/oz.
S&P
The S&P jumped yesterday but backed away from the highly psychological 800 level after the Fed announced a surprise injection of $300 Billion into a quantitative easing program. The actual announcement of quantitative easing was not entirely unexpected since Bernanke has left the window open as an avenue of last resort since December. It was the amount of money being injected which caught investors off-guard. The FX markets certainly took notice as the Dollar plunged against both the Euro and the Pound by extraordinary amounts. Additionally, we saw Gold fly, and naturally the U.S. Treasury futures experienced a huge pop. Sifting past all the headline data, we must ask ourselves what the Fed intended to achieve with such a decision. With the markets locked into trends across the board, we believe Bernanke and company saw that the only way to shift markets into America’s favor was to administer a giant monetary shock and hope key resistances were passed to override trends. Looking at how FX and commodity markets reacted, the move clearly accomplished its intention. The U.S. is hoping to boost manufacturing and production by weakening the Dollar to provide a monetary incentive for countries to increase their U.S. imports. Furthermore, the U.S. is appeasing China by dramatically boosting the price of Treasuries and showing America is committed to make U.S. debt a reliable investment for foreign countries. Though the S&P futures haven’t committed to a 800+ future yet, the indicie’s correlations sure have. Therefore, it seems the Fed has accomplished its goal for the time being. Such a large shock will have considerable aftershocks for the near-term, and we should see continued volatility over the next few weeks. Pundits are warning the U.S. runs the risk of hyperinflation in the future, warranting interest rate hikes down the road. However, this is a ways away, and we will have to see how the situation plays out over time. If the S&P futures can jump back over 800 we foresee clear sailing until the futures approach February highs. Fundamentally, we find resistance of 794.5 with additional resistances hanging at 804, 812.75, 818.75, and 829. To the downside, we see support of 788.75 with additional supports sitting at782.5, 775, and 765.25. The S&P futures are currently trading at 793.50.
30 Year
The 30 Year T-Bond futures posted incredible gains yesterday after the Federal Reserve decided to proceed with quantitative easing by injecting $300 Billion into U.S. Treasuries. Even though Bernanke stated the Fed will focus its accrual of Treasuries on the 5 and 10 Year Notes, the 30 Year was more than happy to participate in the incredible rally taking place. In succession, the 30 Year futures have been jolted out of their downtrend, and are looking to head back north in a hurry. The U.S. has taken care of the rising concern over excess supply to fund the government’s massive stimulus package. Furthermore, the Feds are appeasing China by reassuring the East that their investment in U.S. debt will be a secure one. Consequently, yields are dropping like a rock and it will be interesting to see if the movement translates into accelerated home purchases. The challenge for the 30 Year futures in the near-term will be climbing back into the January trading zone. If the futures are successful in doing so, we anticipate a retest of January highs. Fundamentally, we see resistance of 132.39 with additional resistances hanging at 132.98, 133.36, and 133.69. To the downside, we find supports of 131.92, 131.34, and 130.95. The 30 Year Treasury Bond futures are currently trading at 132 01.0.
