EUR/USD
The EUR/USD popped from the inflection point of our 1st tier downtrend line and 2nd tier uptrend line on Friday as U.S. equities continued their upward momentum. Indicators all around are pointing towards an economic recovery, the EUR/USD included. The currency pair is following its positive correlation with the S&P futures, representing an investor return to risk. However, the EUR/USD still has several fundamental obstacles to the upside as compared to the GBP/USD. The relative strength of the Pound is also reflected in the downward pressure present in the EUR/GBP. First, the EUR/USD must brave through the thick of the March trading zone and 2009 highs, not to mention several foreseeable downtrend lines. Investors are still confused as to the future monetary policy plans of the ECB since Claude Trichet ambiguously left the door open for future cuts after the meeting last week. Additionally, if the Eastern European economies weaken further, exposing EU banks to more losses, the ECB may have no choice to implement quantitative easing. The less than expected 25 basis point cut last week didn’t exactly have its desired impact, and investors are reading into the move as an effort to create a sense of confidence. That being said, the EUR/USD still broke through all of our resistances and the psychological 1.35 barrier. We are simply giving an explanation for the currency pair’s subpar performance as compared to the GBP/USD. The EUR/USD has made some impressive strides, and if it can brave above 2009 highs then we can see a large near-term movement to the upside. The momentum remains to the upside, yet we could see a little consolidation in the near-term. We placed two new downtrend lines on our chart to give you a better idea of upcoming battle areas. Fundamentally, we find supports of 1.3523, 1.35, 1.3476, 1.3442 and 1.3413. To the topside, we see resistances of 1.3568, 1.3591, 1.3633, 1.3665 and 1.37. The 1.35 area becomes a psychological cushion with 1.40 serving as a key psychological barrier. The EUR/USD is currently exchanging at 1.3526.
GBP/USD
The Cable is on fire, continuing its rapid ascent towards the highly psychological 1.50 area. The Pound is outperforming as Britain’s economic data continues to beat analyst expectations. Both Britain’s Manufacturing and Services PMI data points showed improvement last week. While America and the EUs’ economic data points are coming in mixed, Britain’s data is stabilizing on all critical economic fronts. As a result, the GBP/USD is surging while the EUR/GBP drops into a downtrend. In the process, the Cable has broken through all foreseeable downtrend lines, and it appears as if this could be the second leg of a lasting uptrend. However, some technical barriers remain in the Cable’s path, including 1.50 and 2009 highs. Therefore, we wouldn’t be surprised to see some near-term consolidation as the GBP/USD battles with the 1.50 area. Regardless, the momentum clearly remains to the upside for the GBP/USD. Britain will release Manufacturing Production tomorrow and analysts are expecting a decline of -1.4%, which would be a vast improvement over last month’s -2.9%. Fundamentally, we find resistance of 1.4946 with additional resistances hanging at 1.4987, 1.5025, 1.5065 and 1.5111. The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we see supports of 1.4883, 1.4831, 1.4786, 1.4730 and 1.4683. The GBP/USD is currently exchanging at 1.4935.
USD/JPY
As expecting the USD/JPY is launching after finally eclipsing February highs and consequently the highly psychological 100 level. Putting the 100 area behind the USD/JPY is a huge step psychologically, and could proceed to yield a strong leg up in the near-term. All the USD/JPY needs to do is make a follow-through and push past our next two downtrend lines. If this happens, there are no foreseeable downtrend lines remaining, and the currency pair can march on to huge gains. The bears are finally giving into the bulls after last week’s data from Japan showed the Japanese economy is weakening considerably as compared to America’s economy. With both central banks maintaining a benchmark rate around zero while using quantitative easing, the pricing of the USD/JPY relies on comparative economic performance. The Japanese government is expected to fire back on Friday with what should be a new $100 billion stimulus plan. It will be interesting to see how the USD/JPY reacts, and could be what holds back a breakout in the currency pair. Investors will also be keeping a close watch on corporate earnings from America this week and the performance of U.S. equities considering the positive correlation between the USD/JPY and the S&P futures. Since the S&P futures could be in for some near-term profit taking, we could see the USD/JPY return towards 100 today as investors test the solidity of the psychological move. Fundamentally, we find resistances of 101.44, 101.98, 102.50, 103.10, and 103.76. To the downside, we see supports of 100.71, 100.28, 99.79, 99.06, and 98.16. The USD/JPY is currently exchanging at 100.89.
Crude Oil
Crude futures are falling sharply Monday morning after being deflected from the inflection point of our 2nd tier uptrend and downtrend lines. The weakness in Crude follows a decline in the S&P futures after IBM’s acquisition of Sun Microsystems appears to have fallen through. The failed purchase of Sun raises a red flag concerning the health of the economy, and gives investors a reason to take profits after such a large run in Crude. The selloff in Crude is a bit disappointing for bulls since the futures were so close to breaking out of key trend lines and March highs. Additionally, the decline in Crude this morning is more exaggerated than that of the S&P futures. However, today’s drop in Crude shouldn’t have investors too concerned since the IBM news isn’t critical concerning the state of the overall economy. Investors will be paying more attention to the earnings season kicking off tomorrow. With economic data release from the U.S. few and far between this week, earnings will play a key role in determining investor sentiment towards U.S. production and individual consumption of Crude. Therefore, we expect Crude futures to exhibit a tight correlation with the S&P futures throughout the week. On the cautionary side, Crude has just fallen through our 1st tier downtrend line, and it will be interesting to see if the futures can fight back above the trend line today. Crude remains well above the key $50/bbl mark, and the near-term uptrend is still in play. Fundamentally, we find resistances of $51.73/bbl, $52.05/bbl, $52.46/bbl, $52.86/bbl, and $53.30/bbl. To the downside, we see supports of $51.28/bbl, $50.80/bbl, $50.38/bbl, and $49.97/bbl. Crude futures are presently trading at $51.53/bbl.
Gold
Gold collapsed after dipping below our previous bottom-end support and the key psychological $900/oz level. Consequently, the precious metal seems to have made a commitment to the downtrend, which is reflected in the strength of U.S. equities. Gold is finding some support around its 1/29 lows, and could see a little rally back towards $900/oz as investors take advantage of oversold conditions. However, the damage has been done. The only hope for a recovery in Gold would be a complete reversal in U.S. equities and a return to panic concerning the economic crisis. With economic data stabilizing globally and stimulus packages kicking in, this seems like a long-shot in the near-term. Therefore, the downtrend is back in full swing and could pick up steam if the S&P futures break out again. Investors will be keeping a close eye on corporate earnings this week and this should help determine the near-term path of gold. Fundamentally we see resistances of $881.57/oz, $884.10/oz, $887.21/oz, $890.64/oz, and $894.46/oz. To the downside, we find supports of $877.02/oz, $873.74/oz, $870.47/oz, $866.11, and $862.30/oz. Gold is currently trading at $877.00/oz.
30 Year
The 30 Year T-Bond futures tumbled back below our downtrend line on Friday as the S&P futures continued their upward momentum. The movement was a strong reversal and the 30 Year futures dipped below March 24 lows. The futures are recovering Monday morning and are trading right at our downtrend line in reaction to the S&P futures pointing towards a lower open in U.S. equities. The 30 Year futures continue to show an inclination towards the downtrend since March 18th’s historical surge. The weakness in the futures is a bit disconcerting since the Fed’s implementation of quantitative easing was supposed satisfy the rising supply and buoy interest rates to keep U.S. debt attractive. Therefore, investors should keep a close eye on the 30 Year futures since the use of quantitative easing is unprecedented in U.S. history and its ramifications on the value of the 30 Year is unknown. That being said, we expect to see the high volatility continue while the 30 Year futures lock into their positive correlation with the S&P futures. Fundamentally, we find resistances of 127.55, 127.83, 128.19, and 128.61. To the downside, we hold our supports of 126.98, 126.69, 126.45, and 126.19. The 30 Year T-Bond futures are presently trading at 127 20.0.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.All materials are proprerty of Fast Trading services, LLC and unless otherwise indicated, any unauthorised reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
The EUR/USD popped from the inflection point of our 1st tier downtrend line and 2nd tier uptrend line on Friday as U.S. equities continued their upward momentum. Indicators all around are pointing towards an economic recovery, the EUR/USD included. The currency pair is following its positive correlation with the S&P futures, representing an investor return to risk. However, the EUR/USD still has several fundamental obstacles to the upside as compared to the GBP/USD. The relative strength of the Pound is also reflected in the downward pressure present in the EUR/GBP. First, the EUR/USD must brave through the thick of the March trading zone and 2009 highs, not to mention several foreseeable downtrend lines. Investors are still confused as to the future monetary policy plans of the ECB since Claude Trichet ambiguously left the door open for future cuts after the meeting last week. Additionally, if the Eastern European economies weaken further, exposing EU banks to more losses, the ECB may have no choice to implement quantitative easing. The less than expected 25 basis point cut last week didn’t exactly have its desired impact, and investors are reading into the move as an effort to create a sense of confidence. That being said, the EUR/USD still broke through all of our resistances and the psychological 1.35 barrier. We are simply giving an explanation for the currency pair’s subpar performance as compared to the GBP/USD. The EUR/USD has made some impressive strides, and if it can brave above 2009 highs then we can see a large near-term movement to the upside. The momentum remains to the upside, yet we could see a little consolidation in the near-term. We placed two new downtrend lines on our chart to give you a better idea of upcoming battle areas. Fundamentally, we find supports of 1.3523, 1.35, 1.3476, 1.3442 and 1.3413. To the topside, we see resistances of 1.3568, 1.3591, 1.3633, 1.3665 and 1.37. The 1.35 area becomes a psychological cushion with 1.40 serving as a key psychological barrier. The EUR/USD is currently exchanging at 1.3526.
GBP/USD
The Cable is on fire, continuing its rapid ascent towards the highly psychological 1.50 area. The Pound is outperforming as Britain’s economic data continues to beat analyst expectations. Both Britain’s Manufacturing and Services PMI data points showed improvement last week. While America and the EUs’ economic data points are coming in mixed, Britain’s data is stabilizing on all critical economic fronts. As a result, the GBP/USD is surging while the EUR/GBP drops into a downtrend. In the process, the Cable has broken through all foreseeable downtrend lines, and it appears as if this could be the second leg of a lasting uptrend. However, some technical barriers remain in the Cable’s path, including 1.50 and 2009 highs. Therefore, we wouldn’t be surprised to see some near-term consolidation as the GBP/USD battles with the 1.50 area. Regardless, the momentum clearly remains to the upside for the GBP/USD. Britain will release Manufacturing Production tomorrow and analysts are expecting a decline of -1.4%, which would be a vast improvement over last month’s -2.9%. Fundamentally, we find resistance of 1.4946 with additional resistances hanging at 1.4987, 1.5025, 1.5065 and 1.5111. The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we see supports of 1.4883, 1.4831, 1.4786, 1.4730 and 1.4683. The GBP/USD is currently exchanging at 1.4935.
USD/JPY
As expecting the USD/JPY is launching after finally eclipsing February highs and consequently the highly psychological 100 level. Putting the 100 area behind the USD/JPY is a huge step psychologically, and could proceed to yield a strong leg up in the near-term. All the USD/JPY needs to do is make a follow-through and push past our next two downtrend lines. If this happens, there are no foreseeable downtrend lines remaining, and the currency pair can march on to huge gains. The bears are finally giving into the bulls after last week’s data from Japan showed the Japanese economy is weakening considerably as compared to America’s economy. With both central banks maintaining a benchmark rate around zero while using quantitative easing, the pricing of the USD/JPY relies on comparative economic performance. The Japanese government is expected to fire back on Friday with what should be a new $100 billion stimulus plan. It will be interesting to see how the USD/JPY reacts, and could be what holds back a breakout in the currency pair. Investors will also be keeping a close watch on corporate earnings from America this week and the performance of U.S. equities considering the positive correlation between the USD/JPY and the S&P futures. Since the S&P futures could be in for some near-term profit taking, we could see the USD/JPY return towards 100 today as investors test the solidity of the psychological move. Fundamentally, we find resistances of 101.44, 101.98, 102.50, 103.10, and 103.76. To the downside, we see supports of 100.71, 100.28, 99.79, 99.06, and 98.16. The USD/JPY is currently exchanging at 100.89.
Crude Oil
Crude futures are falling sharply Monday morning after being deflected from the inflection point of our 2nd tier uptrend and downtrend lines. The weakness in Crude follows a decline in the S&P futures after IBM’s acquisition of Sun Microsystems appears to have fallen through. The failed purchase of Sun raises a red flag concerning the health of the economy, and gives investors a reason to take profits after such a large run in Crude. The selloff in Crude is a bit disappointing for bulls since the futures were so close to breaking out of key trend lines and March highs. Additionally, the decline in Crude this morning is more exaggerated than that of the S&P futures. However, today’s drop in Crude shouldn’t have investors too concerned since the IBM news isn’t critical concerning the state of the overall economy. Investors will be paying more attention to the earnings season kicking off tomorrow. With economic data release from the U.S. few and far between this week, earnings will play a key role in determining investor sentiment towards U.S. production and individual consumption of Crude. Therefore, we expect Crude futures to exhibit a tight correlation with the S&P futures throughout the week. On the cautionary side, Crude has just fallen through our 1st tier downtrend line, and it will be interesting to see if the futures can fight back above the trend line today. Crude remains well above the key $50/bbl mark, and the near-term uptrend is still in play. Fundamentally, we find resistances of $51.73/bbl, $52.05/bbl, $52.46/bbl, $52.86/bbl, and $53.30/bbl. To the downside, we see supports of $51.28/bbl, $50.80/bbl, $50.38/bbl, and $49.97/bbl. Crude futures are presently trading at $51.53/bbl.
Gold
Gold collapsed after dipping below our previous bottom-end support and the key psychological $900/oz level. Consequently, the precious metal seems to have made a commitment to the downtrend, which is reflected in the strength of U.S. equities. Gold is finding some support around its 1/29 lows, and could see a little rally back towards $900/oz as investors take advantage of oversold conditions. However, the damage has been done. The only hope for a recovery in Gold would be a complete reversal in U.S. equities and a return to panic concerning the economic crisis. With economic data stabilizing globally and stimulus packages kicking in, this seems like a long-shot in the near-term. Therefore, the downtrend is back in full swing and could pick up steam if the S&P futures break out again. Investors will be keeping a close eye on corporate earnings this week and this should help determine the near-term path of gold. Fundamentally we see resistances of $881.57/oz, $884.10/oz, $887.21/oz, $890.64/oz, and $894.46/oz. To the downside, we find supports of $877.02/oz, $873.74/oz, $870.47/oz, $866.11, and $862.30/oz. Gold is currently trading at $877.00/oz.
30 Year
The 30 Year T-Bond futures tumbled back below our downtrend line on Friday as the S&P futures continued their upward momentum. The movement was a strong reversal and the 30 Year futures dipped below March 24 lows. The futures are recovering Monday morning and are trading right at our downtrend line in reaction to the S&P futures pointing towards a lower open in U.S. equities. The 30 Year futures continue to show an inclination towards the downtrend since March 18th’s historical surge. The weakness in the futures is a bit disconcerting since the Fed’s implementation of quantitative easing was supposed satisfy the rising supply and buoy interest rates to keep U.S. debt attractive. Therefore, investors should keep a close eye on the 30 Year futures since the use of quantitative easing is unprecedented in U.S. history and its ramifications on the value of the 30 Year is unknown. That being said, we expect to see the high volatility continue while the 30 Year futures lock into their positive correlation with the S&P futures. Fundamentally, we find resistances of 127.55, 127.83, 128.19, and 128.61. To the downside, we hold our supports of 126.98, 126.69, 126.45, and 126.19. The 30 Year T-Bond futures are presently trading at 127 20.0.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.All materials are proprerty of Fast Trading services, LLC and unless otherwise indicated, any unauthorised reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
