EUR/USD
The EUR/USD is edging up on light volume as investors continue to bite on oversold conditions. The Trade Balance and Factory Orders data from Germany cheered up the bulls yesterday. However, we haven’t seen any game-changing movements to the upside with our 1st tier downtrend line bearing down on price. The near-term obstacle will be hopping over 3/31 highs, or our 1.3351 resistance. European paired currencies could be relatively quiet over the remainder of the week as traders shut off their computers early to celebrate Easter with their families. However, don’t forget the BOE announces its monetary policy decision today while the U.S. releases its Trade Balance and weekly Unemployment Claims. The battle of the trends proceeds with the downtrend holding the upper-hand for now. There are multiple tiers bearing down on price and vicious war zones lie ahead, including the psychological 1.35 level, 4/6 highs, and the 3/20-3/26 trading range. On the other hand, the fact that 4/8 lows were above 3/30 lows keeps the uptrend alive. Additionally, our 1st tier uptrend line held relatively well. Therefore, we wouldn’t be surprised to see more near-term gains from the EUR/USD. The question will be whether the momentum from the current upswing can sling the EUR/USD past April highs, or if the rally falls short. It seems investors are waiting for U.S. equities to make up their minds directionally, which may not happen until we see earnings from financials and the results from the ’stress tests’. We expect the positive correlation between the S&P futures and the EUR/USD to hold true, so keep an eye on both. Fundamentally, our 1.3271 resistance turns support while we maintain our supports of 1.3223, 1.3192, 1.3162, and 1.3126. To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375 and 1.3413 with fresh top-end hanging at 1.3455. The 1.35 area acts a psychological barrier again with 1.30 serving as a key psychological cushion. The EUR/USD is currently exchanging at 1.3281.
GBP/USD
The consolidation in the GBP/USD carries on as investors await the monetary policy decision from the BOE today. Though the BOE has little wiggle room as far as its benchmark rate is concerned, investors will be more focused on any hints as to the success rate of quantitative easing thus far. Britain’s economic data has been showing signs of life on all fronts the past couple weeks, preventing any sharp movements to the downside despite the recent selloff in U.S. equities. Therefore, the Cable remains in an advantageous position unless the BOE presents any unexpectedly negative news monetarily. Nevertheless, we expect the positive correlation between the Cable and U.S. equities to hold true. Hence, if the S&P futures happen to tank today, the GBP/USD may be so inclined to follow suit albeit in a less-dramatic fashion. On the other hand, if U.S. equities rally we could see the Cable explode to the upside towards our 2nd tier uptrend line and April highs. We should see volume tail off later today and tomorrow as many traders take a long weekend for the Easter holiday. Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946. The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484. The GBP/USD is currently exchanging at 1.4678.
USD/JPY
The USD/JPY is still stuck around 100 as the highly-psychological level is proving to be as difficult to overcome as investors could have anticipated. Core Machinery Orders came in far above analyst expectations today, showing capital expenditure is improving in Japan due to dwindling inventories. Core Machinery Orders are forward looking, so the positive release gives investors hope that the Japanese economy could be finding a bottom. Aso is expected to announce a $150+ Billion stimulus package by the end of the week aimed at reviving the downtrodden economy. These two developments are giving some strength to the Yen, delaying a possible breakout in the USD/JPY. However, better than expected Trade Balance and Unemployment Claims releases from the U.S. today could help the cause for the bulls. We expect the consolidation around 100 to continue until investors commit to a direction. The currency pair is holding our tight uptrend line as our downtrend lines approach. If the USD/JPY can brave through our next 3 downtrend lines, we could see some large near-term gains. Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50. To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11. The USD/JPY is currently exchanging at 100.08.
S&P
The S&P futures are popping Thursday pre-market after Wells Fargo announced earnings that blew away analyst estimates. Additionally, the U.S. just released better than expected Trade Balance and Unemployment Claims data, only adding fuel to the fire. The futures have leapt through our 2nd tier downtrend line and are approaching our 3rd tier as we speak. If the S&P futures can carry their momentum through our 3rd tier downtrend line we should see a retest of April highs and a possible breakout. The better than expected earnings from Wells Fargo will be met with cheers on the exchange today since investors have been biting their nails over earnings from financials. Although an improving Trade Balance is certainly a positive change of pace for the U.S., the underlying reasons are a bit concerning. While there was a slight uptick in exports, plummeting imports were the driving force behind a rising balance. Therefore, consumer sentiment is certainly taking a hit from higher unemployment. Speaking of unemployment, while Unemployment Claims were better than expected, the number is nothing to get excited about. Unemployment Claims are still at uncomfortably high levels, creating a sharper pinch on consumption. Brushing the warnings aside, the S&P futures are at a key juncture. If they can bust through our 3rd tier downtrend line we could experience large near-term gains with a new leg up towards the psychological 900 level. Meanwhile, gold and the 30 Year futures are dropping like a rock, indicating a breakout in U.S. equities. Furthermore, crude futures are on the cusp of their own turning point. Therefore, U.S. equities could bring a cheerful Eastern Sunday. Fundamentally, we find supports of 815, 809.25, 804.75, 799.75, and 794. To the topside, we see resistances of 821.5, 829.5, 834.75, 840.25, and 845.25. The S&P futures are currently trading at 816.50.
Crude Oil
Crude futures shot higher yesterday on impressive volume despite weekly inventories coming in slightly higher than expectations. Even though the number missed, inventory levels were still an improvement from last week’s rise of 2.8 million barrels. Crude futures proceeded to muscle through our 1st and 2nd tier uptrend lines and rallied past the highly psychological $50/bbl level in the process. Despite the strong rally, the futures were deflected by our 1st tier downtrend line while backing away from 4/7 highs, indicating the downtrend continues to pull its weight. A battle between trends could ensue in the next 24 hours as our 2nd tier uptrend and 1st tier downtrend lines reach an inflection point. The importance of the moment is reflected on Wall Street as investors debate whether to keep the uptrend alive or self-destruct into the crisis freefall. Though we have a good idea of where supply stands with weekly inventory releases and OPEC standing pat, the demand side of the equation still produces a glaring question mark. Corporate earnings and projections will play a large part in determining the path of crude as investors look for clarity regarding the outlook for production and consumption. We expect crude and equities to continue to walk in lock-step with the positive correlation in full force. Fundamentally, we find resistances of $48.21/bbl, $48.74/bbl, $49.28/bbl, $49.72/bbl, and $50.20/bbl. To the downside, we see supports of $47.72/bbl, $47.32/bbl, $46.89/bbl, $46.42/bbl, and $45.92/bbl. Crude futures are presently trading at $48.04/bbl.
Gold
Gold has carried it’s upwards momentum into Thursday’s trading session despite the S&P futures trading higher pre-market. Therefore, we could see a pop towards our 1st tier downtrend line as investors take advantage of oversold conditions. Of course, the path of gold will ultimately depend on its negative correlation with equities. If the U.S. economic releases come in better than expected today, we could see a rapid reversal into the precious metal’s debilitating downtrend. The downtrend is clearly still in play with the uptrend’s backbone broken and the highly psychological $900/oz relaxing in the distance. The near-term uphill battle will be yesterday’s highs, or our previous $890.64/oz resistance. We have yet to see if gold’s recent commitment to the downside indicates a breakout in the S&P futures. On the other hand, gold’s rapid decline could be a sign of deflation as we witnessed during the height of the financial crisis. This would imply an odd positive correlation between the precious metal and U.S. equities. Only time will tell, and the correlative relationship will be made clear once equities decide whether to commit to the uptrend or fall back into their devastating downtrend. Fundamentally we maintain our resistances of $884.10/oz, $887.21/oz, $890.64/oz, $894.46/oz, and $897.82/oz. To the downside, we hold our supports of $881.57, $877.02/oz, $873.74/oz, $870.47/oz, and $866.11. Gold is currently trading at $883.80/oz.
30 Year
The weak rally in the 30 Year futures peaked yesterday as anticipated. The futures are making a clear commitment to the downtrend, and will need a sharp reversal in equities to change this development. The 30 Year futures are dropping below 3/24 lows as we type, and a retracement beneath our downtrend line seems imminent. The question becomes whether April lows can hold. If not, then we could see the present selloff pick up. April volume remains relatively light compared to March. The downturn in the 30 Year futures could be a cause for concern for the Federal Reserve, indicating the concept of quantitative easing may not have the desired impact on interest rates. Meanwhile, China is quietly coordinating large currency swaps with several countries to take a jab at the Federal Reserve, showing they are prepared to diversify their foreign exchange reserves from a heavy reliance on U.S. debt. This development is disconcerting for the 30 Year futures since the T-Bond auctions may not get as much interest from foreign invest as anticipated. Our outlook for the 30 Year futures remains to the downside for the above-mentioned reasons. Fundamentally, we hold our resistances of 127.05, 127.28, 127.64, 127.89, and 128.31. To the downside, we maintain our supports of 126.69, 126.45, 126.19, 125.91, and 125.47. The 30 Year T-Bond futures are presently trading at 126 23.0.
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 is edging up on light volume as investors continue to bite on oversold conditions. The Trade Balance and Factory Orders data from Germany cheered up the bulls yesterday. However, we haven’t seen any game-changing movements to the upside with our 1st tier downtrend line bearing down on price. The near-term obstacle will be hopping over 3/31 highs, or our 1.3351 resistance. European paired currencies could be relatively quiet over the remainder of the week as traders shut off their computers early to celebrate Easter with their families. However, don’t forget the BOE announces its monetary policy decision today while the U.S. releases its Trade Balance and weekly Unemployment Claims. The battle of the trends proceeds with the downtrend holding the upper-hand for now. There are multiple tiers bearing down on price and vicious war zones lie ahead, including the psychological 1.35 level, 4/6 highs, and the 3/20-3/26 trading range. On the other hand, the fact that 4/8 lows were above 3/30 lows keeps the uptrend alive. Additionally, our 1st tier uptrend line held relatively well. Therefore, we wouldn’t be surprised to see more near-term gains from the EUR/USD. The question will be whether the momentum from the current upswing can sling the EUR/USD past April highs, or if the rally falls short. It seems investors are waiting for U.S. equities to make up their minds directionally, which may not happen until we see earnings from financials and the results from the ’stress tests’. We expect the positive correlation between the S&P futures and the EUR/USD to hold true, so keep an eye on both. Fundamentally, our 1.3271 resistance turns support while we maintain our supports of 1.3223, 1.3192, 1.3162, and 1.3126. To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375 and 1.3413 with fresh top-end hanging at 1.3455. The 1.35 area acts a psychological barrier again with 1.30 serving as a key psychological cushion. The EUR/USD is currently exchanging at 1.3281.
GBP/USD
The consolidation in the GBP/USD carries on as investors await the monetary policy decision from the BOE today. Though the BOE has little wiggle room as far as its benchmark rate is concerned, investors will be more focused on any hints as to the success rate of quantitative easing thus far. Britain’s economic data has been showing signs of life on all fronts the past couple weeks, preventing any sharp movements to the downside despite the recent selloff in U.S. equities. Therefore, the Cable remains in an advantageous position unless the BOE presents any unexpectedly negative news monetarily. Nevertheless, we expect the positive correlation between the Cable and U.S. equities to hold true. Hence, if the S&P futures happen to tank today, the GBP/USD may be so inclined to follow suit albeit in a less-dramatic fashion. On the other hand, if U.S. equities rally we could see the Cable explode to the upside towards our 2nd tier uptrend line and April highs. We should see volume tail off later today and tomorrow as many traders take a long weekend for the Easter holiday. Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946. The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484. The GBP/USD is currently exchanging at 1.4678.
USD/JPY
The USD/JPY is still stuck around 100 as the highly-psychological level is proving to be as difficult to overcome as investors could have anticipated. Core Machinery Orders came in far above analyst expectations today, showing capital expenditure is improving in Japan due to dwindling inventories. Core Machinery Orders are forward looking, so the positive release gives investors hope that the Japanese economy could be finding a bottom. Aso is expected to announce a $150+ Billion stimulus package by the end of the week aimed at reviving the downtrodden economy. These two developments are giving some strength to the Yen, delaying a possible breakout in the USD/JPY. However, better than expected Trade Balance and Unemployment Claims releases from the U.S. today could help the cause for the bulls. We expect the consolidation around 100 to continue until investors commit to a direction. The currency pair is holding our tight uptrend line as our downtrend lines approach. If the USD/JPY can brave through our next 3 downtrend lines, we could see some large near-term gains. Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50. To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11. The USD/JPY is currently exchanging at 100.08.
S&P
The S&P futures are popping Thursday pre-market after Wells Fargo announced earnings that blew away analyst estimates. Additionally, the U.S. just released better than expected Trade Balance and Unemployment Claims data, only adding fuel to the fire. The futures have leapt through our 2nd tier downtrend line and are approaching our 3rd tier as we speak. If the S&P futures can carry their momentum through our 3rd tier downtrend line we should see a retest of April highs and a possible breakout. The better than expected earnings from Wells Fargo will be met with cheers on the exchange today since investors have been biting their nails over earnings from financials. Although an improving Trade Balance is certainly a positive change of pace for the U.S., the underlying reasons are a bit concerning. While there was a slight uptick in exports, plummeting imports were the driving force behind a rising balance. Therefore, consumer sentiment is certainly taking a hit from higher unemployment. Speaking of unemployment, while Unemployment Claims were better than expected, the number is nothing to get excited about. Unemployment Claims are still at uncomfortably high levels, creating a sharper pinch on consumption. Brushing the warnings aside, the S&P futures are at a key juncture. If they can bust through our 3rd tier downtrend line we could experience large near-term gains with a new leg up towards the psychological 900 level. Meanwhile, gold and the 30 Year futures are dropping like a rock, indicating a breakout in U.S. equities. Furthermore, crude futures are on the cusp of their own turning point. Therefore, U.S. equities could bring a cheerful Eastern Sunday. Fundamentally, we find supports of 815, 809.25, 804.75, 799.75, and 794. To the topside, we see resistances of 821.5, 829.5, 834.75, 840.25, and 845.25. The S&P futures are currently trading at 816.50.
Crude Oil
Crude futures shot higher yesterday on impressive volume despite weekly inventories coming in slightly higher than expectations. Even though the number missed, inventory levels were still an improvement from last week’s rise of 2.8 million barrels. Crude futures proceeded to muscle through our 1st and 2nd tier uptrend lines and rallied past the highly psychological $50/bbl level in the process. Despite the strong rally, the futures were deflected by our 1st tier downtrend line while backing away from 4/7 highs, indicating the downtrend continues to pull its weight. A battle between trends could ensue in the next 24 hours as our 2nd tier uptrend and 1st tier downtrend lines reach an inflection point. The importance of the moment is reflected on Wall Street as investors debate whether to keep the uptrend alive or self-destruct into the crisis freefall. Though we have a good idea of where supply stands with weekly inventory releases and OPEC standing pat, the demand side of the equation still produces a glaring question mark. Corporate earnings and projections will play a large part in determining the path of crude as investors look for clarity regarding the outlook for production and consumption. We expect crude and equities to continue to walk in lock-step with the positive correlation in full force. Fundamentally, we find resistances of $48.21/bbl, $48.74/bbl, $49.28/bbl, $49.72/bbl, and $50.20/bbl. To the downside, we see supports of $47.72/bbl, $47.32/bbl, $46.89/bbl, $46.42/bbl, and $45.92/bbl. Crude futures are presently trading at $48.04/bbl.
Gold
Gold has carried it’s upwards momentum into Thursday’s trading session despite the S&P futures trading higher pre-market. Therefore, we could see a pop towards our 1st tier downtrend line as investors take advantage of oversold conditions. Of course, the path of gold will ultimately depend on its negative correlation with equities. If the U.S. economic releases come in better than expected today, we could see a rapid reversal into the precious metal’s debilitating downtrend. The downtrend is clearly still in play with the uptrend’s backbone broken and the highly psychological $900/oz relaxing in the distance. The near-term uphill battle will be yesterday’s highs, or our previous $890.64/oz resistance. We have yet to see if gold’s recent commitment to the downside indicates a breakout in the S&P futures. On the other hand, gold’s rapid decline could be a sign of deflation as we witnessed during the height of the financial crisis. This would imply an odd positive correlation between the precious metal and U.S. equities. Only time will tell, and the correlative relationship will be made clear once equities decide whether to commit to the uptrend or fall back into their devastating downtrend. Fundamentally we maintain our resistances of $884.10/oz, $887.21/oz, $890.64/oz, $894.46/oz, and $897.82/oz. To the downside, we hold our supports of $881.57, $877.02/oz, $873.74/oz, $870.47/oz, and $866.11. Gold is currently trading at $883.80/oz.
30 Year
The weak rally in the 30 Year futures peaked yesterday as anticipated. The futures are making a clear commitment to the downtrend, and will need a sharp reversal in equities to change this development. The 30 Year futures are dropping below 3/24 lows as we type, and a retracement beneath our downtrend line seems imminent. The question becomes whether April lows can hold. If not, then we could see the present selloff pick up. April volume remains relatively light compared to March. The downturn in the 30 Year futures could be a cause for concern for the Federal Reserve, indicating the concept of quantitative easing may not have the desired impact on interest rates. Meanwhile, China is quietly coordinating large currency swaps with several countries to take a jab at the Federal Reserve, showing they are prepared to diversify their foreign exchange reserves from a heavy reliance on U.S. debt. This development is disconcerting for the 30 Year futures since the T-Bond auctions may not get as much interest from foreign invest as anticipated. Our outlook for the 30 Year futures remains to the downside for the above-mentioned reasons. Fundamentally, we hold our resistances of 127.05, 127.28, 127.64, 127.89, and 128.31. To the downside, we maintain our supports of 126.69, 126.45, 126.19, 125.91, and 125.47. The 30 Year T-Bond futures are presently trading at 126 23.0.
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.
