EUR/USD
The EUR/USD popped up yesterday after Timothy Geithner admitted that there may be a better international currency reserve than the U.S. Dollar. However, Geithner later clarified that he believes the U.S. Dollar will continue to play a key role in international reserves and transactions. The stability of the U.S. Dollar has been thrown into doubt in the face of historical governmental spending and the Federal Reserve’s planned use of quantitative easing. Analysts are anticipating massive inflation in the U.S., or an extreme depreciation of the Dollar against major currency pairs. Therefore, governments are voicing their opinion concerning the domination of the U.S. Dollar before the G20 summit. The Euro is poised to benefit from such talks since the ECB has kept its benchmark rate at a reasonable level while avoiding quantitative easing thus far. Therefore, it’s fair to assume the uptrend is intact for the EUR/USD for the time being. The currency pair reflects this belief fundamentally, finding stability along our 2nd tier uptrend line while peering at March highs. If the EUR/USD can propel itself over these highs, then we foresee large near-term gains towards the psychological 1.340 mark. Then again, if the currency pair can’t hold yesterday’s lows, or our previous 1.3427 support, then we could see a large near-term contraction. Fundamentally, we find supports of 1.3554, 1.3494, 1.3427, and 1.3371. To the topside, we see resistances of 1.3624, 1.3688, 1.3724, 1.3762, and 1.3811. The EUR/USD is currently exchanging at 1.3580.
USD/JPY
The USD/JPY continues its struggle with our 3rd tier downtrend line as it tries to ascend past key February highs. The next 24 hours are crucial for the USD/JPY. For if the currency pair can climb past February highs then we will finally see a retest of 100 with the possibility of large near-term gains. On the other hand, if the USD/JPY can’t brave through February highs within this time frame, we could very well see the currency collapse back into its downtrend with a movement towards our near-term uptrend line. With key economic data coming from both Japan and the U.S. in the next 24 hours, the USD/JPY will certainly have the fuel to ignite a fundamental movement in either direction. If the Tokyo Core CPI and Japanese Retail Sales come in lower than expected while America’s data either meets or surpasses expectations, then we could see the currency pair dart towards the upside. On the other hand, signals of heavy economic contraction in the U.S. coupled with reasonable data from Japan would send the USD/JPY south in a hurry. Fundamentally, we maintain our resistances of 99.00, 99.79 and 100.69 with fresh top-end of 101.58. To the downside, we find supports of 98.11, 97.49, 96.65, and 95.92. The USD/JPY is currently exchanging at 98.25.
GBP/USD
The Cable is weakening below our uptrend line while approaching the psychological 1.45 cushion. The Dollar is experiencing relative strength against the Pound due to the combination of yesterday’s better than expected economic data from the U.S. combined with much weaker than expected Retail Sales from Britain today. In a nutshell, this week’s data reveals that inflation is rising rapidly in Britain while consumption slows. Meanwhile, both America’s and Britain’s central banks have lowered their benchmark rates to record lows while implementing quantitative easing. We do not know whether the quantitative easing and stimulus packages will have a greater impact on CPI and PPI in the two countries. Therefore, until the U.S. releases this inflation data the GBP/USD should be tightly weighted to comparative production and unemployment data from the two countries. While the Cable is fighting to hold onto its uptrend, the Euro is witnessing considerable strength against the Dollar, which is reflected clearly in the EUR/GBP. All eyes will be on America’s release of weekly Unemployment Claims and Final GDP today. Fundamentally, we find resistance of 1.4570 with additional resistances hanging at 1.4619, 1.4671, and 1.4704. The 1.45 area will serve as a psychological cushion with 1.50 acting as a highly psychological barrier. To the downside, we see supports of 1.4544, 1.4498, 1.4453, and 1.4420. The GBP/USD is currently exchanging at 1.4560.
Gold
Gold recovered well from our 1st tier uptrend line after Treasury Secretary Geithner alluded to the fact the U.S. would not be opposed to migrating from using the Dollar as the standard international currency. Consequently, gold flexed its negative correlation with the Dollar, which is interesting because U.S. equities have been positively correlated with the EUR/USD, GBP/USD and USD/JPY throughout the heat of the crisis. Such movements indicate that the correlations may be shifting between U.S. equities and the major Dollar pairs. However, this is merely a hypothesis based on observation and will need to be clarified further. What we can say is that the uptrend for Gold has been rescued for now. Considering the large movement upwards last week on considerable volume, we’ve expected consistent reflections to the upside, and we may be witnessing these soon. That being said, if gold can get above our 2nd tier uptrend line and 3/6 highs, then we could see significant near-term gains towards our downtrend line and the psychological $950/oz area. Fundamentally we see resistances of $939.27/oz, $941.79/oz, $944.03/oz, $947.40/oz, and $949.92/oz. To the downside, find supports of $935.34/oz, $931.98/oz, $927.78/oz, and $924.69/oz. Gold is currently trading at $939.75/oz.
Crude Oil
Crude futures strengthened from our bottom-end support yesterday despite higher than expected Crude Oil Inventories for the fourth straight week. Despite the concerning increase in supply, crude is finding comfort in better than expected economic data from the U.S. coupled with depreciation of the Dollar. Consequently, analysts are expecting rampant inflation in America. Improving economic data is encouraging to investors because it sparks the hope that production can pick up along with the consumption of crude. Furthermore, a depreciating Dollar makes Dollar-denominated commodities such as crude more attractive for international consumption. Finally, economists are cautioning about inflation, which implies rising crude prices. Crude futures are currently battling with March highs and appear poised to break out. Considering crude futures have stabilized very well above our trend lines and the psychological $50/bbl area, crude is on the path to retest 2009 highs. Therefore, we could very well witness large near-term gains. However, the psychological $55/bbl and January highs should each prove to be formidable foes to the upside. Fundamentally, we find resistances of $54.52/bbl, $54.90/bbl, $55.45/bbl, and $55.98/bbl. To the downside, we see supports of $53.77/bbl, $53.40/bbl, $52.69/bbl, and $52.36/bbl. The crude futures are presently trading at $52.36/bbl.
The EUR/USD popped up yesterday after Timothy Geithner admitted that there may be a better international currency reserve than the U.S. Dollar. However, Geithner later clarified that he believes the U.S. Dollar will continue to play a key role in international reserves and transactions. The stability of the U.S. Dollar has been thrown into doubt in the face of historical governmental spending and the Federal Reserve’s planned use of quantitative easing. Analysts are anticipating massive inflation in the U.S., or an extreme depreciation of the Dollar against major currency pairs. Therefore, governments are voicing their opinion concerning the domination of the U.S. Dollar before the G20 summit. The Euro is poised to benefit from such talks since the ECB has kept its benchmark rate at a reasonable level while avoiding quantitative easing thus far. Therefore, it’s fair to assume the uptrend is intact for the EUR/USD for the time being. The currency pair reflects this belief fundamentally, finding stability along our 2nd tier uptrend line while peering at March highs. If the EUR/USD can propel itself over these highs, then we foresee large near-term gains towards the psychological 1.340 mark. Then again, if the currency pair can’t hold yesterday’s lows, or our previous 1.3427 support, then we could see a large near-term contraction. Fundamentally, we find supports of 1.3554, 1.3494, 1.3427, and 1.3371. To the topside, we see resistances of 1.3624, 1.3688, 1.3724, 1.3762, and 1.3811. The EUR/USD is currently exchanging at 1.3580.
USD/JPY
The USD/JPY continues its struggle with our 3rd tier downtrend line as it tries to ascend past key February highs. The next 24 hours are crucial for the USD/JPY. For if the currency pair can climb past February highs then we will finally see a retest of 100 with the possibility of large near-term gains. On the other hand, if the USD/JPY can’t brave through February highs within this time frame, we could very well see the currency collapse back into its downtrend with a movement towards our near-term uptrend line. With key economic data coming from both Japan and the U.S. in the next 24 hours, the USD/JPY will certainly have the fuel to ignite a fundamental movement in either direction. If the Tokyo Core CPI and Japanese Retail Sales come in lower than expected while America’s data either meets or surpasses expectations, then we could see the currency pair dart towards the upside. On the other hand, signals of heavy economic contraction in the U.S. coupled with reasonable data from Japan would send the USD/JPY south in a hurry. Fundamentally, we maintain our resistances of 99.00, 99.79 and 100.69 with fresh top-end of 101.58. To the downside, we find supports of 98.11, 97.49, 96.65, and 95.92. The USD/JPY is currently exchanging at 98.25.
GBP/USD
The Cable is weakening below our uptrend line while approaching the psychological 1.45 cushion. The Dollar is experiencing relative strength against the Pound due to the combination of yesterday’s better than expected economic data from the U.S. combined with much weaker than expected Retail Sales from Britain today. In a nutshell, this week’s data reveals that inflation is rising rapidly in Britain while consumption slows. Meanwhile, both America’s and Britain’s central banks have lowered their benchmark rates to record lows while implementing quantitative easing. We do not know whether the quantitative easing and stimulus packages will have a greater impact on CPI and PPI in the two countries. Therefore, until the U.S. releases this inflation data the GBP/USD should be tightly weighted to comparative production and unemployment data from the two countries. While the Cable is fighting to hold onto its uptrend, the Euro is witnessing considerable strength against the Dollar, which is reflected clearly in the EUR/GBP. All eyes will be on America’s release of weekly Unemployment Claims and Final GDP today. Fundamentally, we find resistance of 1.4570 with additional resistances hanging at 1.4619, 1.4671, and 1.4704. The 1.45 area will serve as a psychological cushion with 1.50 acting as a highly psychological barrier. To the downside, we see supports of 1.4544, 1.4498, 1.4453, and 1.4420. The GBP/USD is currently exchanging at 1.4560.
Gold
Gold recovered well from our 1st tier uptrend line after Treasury Secretary Geithner alluded to the fact the U.S. would not be opposed to migrating from using the Dollar as the standard international currency. Consequently, gold flexed its negative correlation with the Dollar, which is interesting because U.S. equities have been positively correlated with the EUR/USD, GBP/USD and USD/JPY throughout the heat of the crisis. Such movements indicate that the correlations may be shifting between U.S. equities and the major Dollar pairs. However, this is merely a hypothesis based on observation and will need to be clarified further. What we can say is that the uptrend for Gold has been rescued for now. Considering the large movement upwards last week on considerable volume, we’ve expected consistent reflections to the upside, and we may be witnessing these soon. That being said, if gold can get above our 2nd tier uptrend line and 3/6 highs, then we could see significant near-term gains towards our downtrend line and the psychological $950/oz area. Fundamentally we see resistances of $939.27/oz, $941.79/oz, $944.03/oz, $947.40/oz, and $949.92/oz. To the downside, find supports of $935.34/oz, $931.98/oz, $927.78/oz, and $924.69/oz. Gold is currently trading at $939.75/oz.
Crude Oil
Crude futures strengthened from our bottom-end support yesterday despite higher than expected Crude Oil Inventories for the fourth straight week. Despite the concerning increase in supply, crude is finding comfort in better than expected economic data from the U.S. coupled with depreciation of the Dollar. Consequently, analysts are expecting rampant inflation in America. Improving economic data is encouraging to investors because it sparks the hope that production can pick up along with the consumption of crude. Furthermore, a depreciating Dollar makes Dollar-denominated commodities such as crude more attractive for international consumption. Finally, economists are cautioning about inflation, which implies rising crude prices. Crude futures are currently battling with March highs and appear poised to break out. Considering crude futures have stabilized very well above our trend lines and the psychological $50/bbl area, crude is on the path to retest 2009 highs. Therefore, we could very well witness large near-term gains. However, the psychological $55/bbl and January highs should each prove to be formidable foes to the upside. Fundamentally, we find resistances of $54.52/bbl, $54.90/bbl, $55.45/bbl, and $55.98/bbl. To the downside, we see supports of $53.77/bbl, $53.40/bbl, $52.69/bbl, and $52.36/bbl. The crude futures are presently trading at $52.36/bbl.
