EUR/USD
The EUR/USD is consolidating above our 1st tier uptrend line, holding up relatively well considering the brisk selloff on Wall Street in reaction to disappointing U.S. economic data. The EUR/GBP continues its downturn with the GBP/USD looking to break out of our 2nd tier uptrend line. Hence, we’re witnessing the perpetuation of status quo among the Euro, Pound, and Dollar due to a lack of significant data from both the EU and Britain. The Euro is still at a disadvantage with the ECB taking a vague monetary stance, and uncertainty hardly ever yields a positive performance in price. Will the ECB cut its benchmark further or initiate unorthodox liquidity processes? Nobody knows at this point. Since the economic data surfacing from the EU over the past month has been mixed, the ECB will likely wait to see if the signs of improvement are only a bounce or a real turn in events. We’ll witness a couple inflection points shortly, including our 1st tier uptrend and downtrend lines and our 2nd tier uptrend and downtrend lines. Therefore, the EUR/USD is signaling that it could reach a directional pivot point soon. Meanwhile, we could see a little pop up to our 1st tier downtrend line intraday. Fundamentally, we maintain our supports of 1.3271, 1.3223, 1.3192, 1.3162, and 1.3126. To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375, 1.3413, and1.3462. 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 1.3268.
GBP/USD
The Cable has just jumped out of our 2nd tier uptrend line and February highs, leaping over 2 of 3 significant obstacles before a sizable breakout can take place. The third key barrier is the highly psychological 1.50 level. Though the Cable is climbing past 1.50 as we speak, the area could prove to be challenging in the near-term, and shouldn’t go down without a fight. That being said, the GBP/USD is in the process of reconfirming its uptrend as it exercises its clear dominance over the Euro and Dollar. With a shortage of significant economic data surfacing from Britain this week, the Pound is flying high off of its encouraging data from the past month. Uncertainty is brewing in the EU and U.S., giving the Pound the upper hand for the near-term. Hence, the Cable is running without U.S. equities right now. However, should U.S. markets head higher, this would only add fuel to the fire of the Cable’s present rally. Whether and uptrend continues to materialize in the GBP/USD over the medium-term is another question. We could easily see mixed data come from Britain over the next few weeks, stoking uncertainty similar to that in the U.S. After all, Britain and the U.S. are so intertwined, it would be hard to believe that if the U.S. economy has another setback Britain’s wouldn’t follow suit. However, right now all is good in the GBP/USD with all indicators in the positive. Fundamentally, we find resistance of 1.5028 with additional resistances hanging at 1.5080, 1.5121, 1.5185 and 1.5219. The critical 1.50 could quickly turn into a psychological cushion with 1.55 becoming the psychological barrier. To the downside, we find supports of 1.4988, 1.4946, 1.4883, 1.4834 and 1.4770. The GBP/USD is currently exchanging at 1.5015.
USD/JPY
The USD/JPY is recovering from yesterday’s losses after sinking below our 1st tier uptrend line and 2nd tier downtrend line while the currency pair exercised its past positive correlation with U.S. equities. The move came in reaction to surprisingly negative data from the U.S., giving currency traders a reason to lose faith in America’s economic stabilization. However, the downturn in the USD/JPY was by no means significant, exemplified by today’s recovery. The ability for the uptrend to materialize into something substantial remains a question mark as before. Our first tier uptrend was tight in the first place, so we set a new first tier uptrend line today. That being said, the USD/JPY sure hasn’t shown confidence in a 100+ future. The uptrend is very young, giving precedence to the longer-term downtrend still solidly intact. However, don’t be fooled. The fundamentals are still in place for a breakout in the USD/JPY. All the currency pair needs is a true confirmation from the U.S. that we have seen the worst of the economic crisis. Therefore, we expect to see the continuation of consolidation in the USD/JPY as investors await more earnings from financials and results from the highly anticipated stress tests. Critical levels on each side are our 101.44 resistance and 97.11 support. Fundamentally, our 99.79 support turns resistance while we maintain our resistances of 100.28, 100.71, 101.44, and 101.98. To the downside, we hold our supports of 99.06, 98.16, 97.59, and 97.11 with fresh bottom-end of 96.33. The USD/JPY is currently exchanging at 99.10.
Crude Oil
Crude futures are recovering Wednesday morning after Tuesday’s selloff in reaction to disappointing PPI and Retail Sales data. Yesterday’s downturn was not significant and crude has risen back above the highly psychological $50/bbl. The indecisive movements reflect investor uncertainty concerning the economy as a whole. While investors are not willing to give up on the uptrend, the downtrend is still sitting in the driver’s seat with investors unwilling to commit above our 2nd tier downtrend line. The highly psychological $50/bbl area continues to play a lead role as prices are gravitating here. Naturally, the key driving force behind the demand structure of crude is the overall health of the U.S. economy. Energy investors are waiting to see if the recovery in U.S. equities is legitimate before extending the rally in crude beyond the present fundamental hindrances. Investors are now being bombarded by news from the supply side after OPEC stayed quiet for quite some time. Crude imports are rising considerably from Russia and Brazil, likely an aftereffect from Obama improving upon diplomatic relations with the two nations. OPEC is vocalizing its discontent over the development since a rise in imports from Russia and Brazil dilute their massive production cuts implemented over the last 6 months. The new sources of crude are placing a new downward pressure on the price and could have a noticeable impact for the time being. We wouldn’t be surprised to see a more aggressive reaction from OPEC if the trend continues with the possibility of more production cuts on the table. Despite the development supply-wise, crude futures should still maintain a positive correlation with the S&P futures, though they may be less inclined to fully participate in any large movements to the upside. The U.S. will release weekly crude inventories today, normally a market mover. Fundamentally, we maintain our resistances of $50.39/bbl, $51.03/bbl, $51.59/bbl, $52.02/bbl, and $52.49/bbl. To the downside, we hold our supports of $49.81/bbl, $49.28/bbl, $48.87/bbl, $48.37/bbl, and $47.79/bbl. Crude futures are presently trading at $50.29/bbl.
Gold
Gold is finding strength in our 1st tier downtrend line despite U.S. equities trading higher pre-market. The precious metal has given us no reason to alter our negative stance and gold certainly has its hands full with the psychological $900/oz and our 2nd tier downtrend line. We anticipate gold to gravitate towards its natural negative correlation with U.S. equities during critical moments. Hence, the precious metal is still hinting at another breakout in the S&P futures with the back of the uptrend broken. However, there is always the possibility of gold jolting back into its uptrend should U.S. equities collapse. On the other hand, the precious metal could head lower with equities should deflation worries escalate. In other words, gold’s behavioral correlation with U.S. equities could prove unpredictable should the waters boil. One thing we can tell you, gold has certainly made a commitment to the downtrend with its rapid decline from 4/2-4/6. Fundamentally our $894.46 support turns resistance while we hold our resistances of $897.82/oz, $900.76/oz, $904.26/oz, and $908.72/oz. To the downside, we maintain our supports of $890.64/oz, $887.21/oz, $884.10/oz, and $880.71 with fresh bottom-end of $877.70/oz. Gold is currently trading at $894.20/oz.
S&P
The S&P futures experienced considerable losses Tuesday after the U.S. released disappointing PPI and Retail Sales data. The futures weakened below April 4 highs and our 3rd tier downtrend line before popping back above the trend line Wednesday morning. A surprising declining PPI reignites fears of deflation while the negative Retail Sales number reinforces the fact that U.S. consumption is buckling under the pressure of the economic downturn. Yesterday’s data points raise a red flag concerning the possibility of a head fake in economic data and shows the worst of the economic crisis may not be behind us after all. The U.S. has more key economic releases on tap for today, including CPI, TIC Long-Term Purchases, Industrial Production, the Empire State Manufacturing Index, and weekly Crude Oil Inventories. Therefore, we anticipate volatility to heat up during today’s session. Though Intel’s earnings after the bell beat analyst expectations, the lack of guidance from the semiconductor bell-weather raises another red flag and heightens investor uncertainty. If major corporations are unable to project performance over the next quarter, it becomes increasingly difficult for chief operators to design budgets to maximize earnings from desirable loan structures. With the barrage of red flags investor uncertainty is rising concerning the viability of a economic turnaround. However, we caution against become overly-pessimistic right now since the S&P futures are still healthy fundamentally. Investors may wait until the results from the government’s stress tests of financials before passing judgment trend-wise. That being said, the obstacles are stacking up against the uptrend. Not only do the futures still need to pass through February highs, but April highs now serve as an intermediate barrier to the upside. However, the highly psychological 800 level defends the S&P futures to the downside. Fundamentally, we maintain our supports of 834.75, 829.5, 825, and 818.5 with fresh bottom-end of 812.75. To the topside, our 839.75 support turns resistance while we hold our resistances of 845.25, 850.5, 856.25, and 862.5. The S&P futures are currently trading at 835.25.
30 Year
The 30 Year T-Bond futures made a nice move to the upside yesterday as U.S. equities headed south in reaction to negative economic data. However, once again, the 30 Year futures failed to make a game-changing move to the upside. The lack of follow through to the upside paints a distorted picture. On one hand, we could be witnessing insufficient demand in the bond market to compensate for the massive supply of treasuries created to fund the government’s stimulus measures despite the Fed’s use of quantitative easing. On the other hand, the 30 Year’s reluctance to the upside bolsters the argument for a recovery in U.S. equities, and consequently America’s economy. Without sufficient evidence it’s difficult to commit to one argument or the other, showing the 30 Year futures may be a lagging indicator right now. That being said, the 30 Year futures are well cemented in their downtrend and will need to make some sizable moves to the upside to alter their path. We placed a new 2nd tier downtrend line on our chart to give you a picture of where some of the trend-setting obstacles stand. Fundamentally, we hold our resistances of 127.64, 127.89, 128.31, and 128.73 with fresh top-end of 1 130.06. To the downside, our 127.28 resistance turns support while we hold our supports of 127.04 126.69, 126.45, and 126.19. The 30 Year T-Bond futures are presently trading at 128 00.0.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized 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 consolidating above our 1st tier uptrend line, holding up relatively well considering the brisk selloff on Wall Street in reaction to disappointing U.S. economic data. The EUR/GBP continues its downturn with the GBP/USD looking to break out of our 2nd tier uptrend line. Hence, we’re witnessing the perpetuation of status quo among the Euro, Pound, and Dollar due to a lack of significant data from both the EU and Britain. The Euro is still at a disadvantage with the ECB taking a vague monetary stance, and uncertainty hardly ever yields a positive performance in price. Will the ECB cut its benchmark further or initiate unorthodox liquidity processes? Nobody knows at this point. Since the economic data surfacing from the EU over the past month has been mixed, the ECB will likely wait to see if the signs of improvement are only a bounce or a real turn in events. We’ll witness a couple inflection points shortly, including our 1st tier uptrend and downtrend lines and our 2nd tier uptrend and downtrend lines. Therefore, the EUR/USD is signaling that it could reach a directional pivot point soon. Meanwhile, we could see a little pop up to our 1st tier downtrend line intraday. Fundamentally, we maintain our supports of 1.3271, 1.3223, 1.3192, 1.3162, and 1.3126. To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375, 1.3413, and1.3462. 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 1.3268.
GBP/USD
The Cable has just jumped out of our 2nd tier uptrend line and February highs, leaping over 2 of 3 significant obstacles before a sizable breakout can take place. The third key barrier is the highly psychological 1.50 level. Though the Cable is climbing past 1.50 as we speak, the area could prove to be challenging in the near-term, and shouldn’t go down without a fight. That being said, the GBP/USD is in the process of reconfirming its uptrend as it exercises its clear dominance over the Euro and Dollar. With a shortage of significant economic data surfacing from Britain this week, the Pound is flying high off of its encouraging data from the past month. Uncertainty is brewing in the EU and U.S., giving the Pound the upper hand for the near-term. Hence, the Cable is running without U.S. equities right now. However, should U.S. markets head higher, this would only add fuel to the fire of the Cable’s present rally. Whether and uptrend continues to materialize in the GBP/USD over the medium-term is another question. We could easily see mixed data come from Britain over the next few weeks, stoking uncertainty similar to that in the U.S. After all, Britain and the U.S. are so intertwined, it would be hard to believe that if the U.S. economy has another setback Britain’s wouldn’t follow suit. However, right now all is good in the GBP/USD with all indicators in the positive. Fundamentally, we find resistance of 1.5028 with additional resistances hanging at 1.5080, 1.5121, 1.5185 and 1.5219. The critical 1.50 could quickly turn into a psychological cushion with 1.55 becoming the psychological barrier. To the downside, we find supports of 1.4988, 1.4946, 1.4883, 1.4834 and 1.4770. The GBP/USD is currently exchanging at 1.5015.
USD/JPY
The USD/JPY is recovering from yesterday’s losses after sinking below our 1st tier uptrend line and 2nd tier downtrend line while the currency pair exercised its past positive correlation with U.S. equities. The move came in reaction to surprisingly negative data from the U.S., giving currency traders a reason to lose faith in America’s economic stabilization. However, the downturn in the USD/JPY was by no means significant, exemplified by today’s recovery. The ability for the uptrend to materialize into something substantial remains a question mark as before. Our first tier uptrend was tight in the first place, so we set a new first tier uptrend line today. That being said, the USD/JPY sure hasn’t shown confidence in a 100+ future. The uptrend is very young, giving precedence to the longer-term downtrend still solidly intact. However, don’t be fooled. The fundamentals are still in place for a breakout in the USD/JPY. All the currency pair needs is a true confirmation from the U.S. that we have seen the worst of the economic crisis. Therefore, we expect to see the continuation of consolidation in the USD/JPY as investors await more earnings from financials and results from the highly anticipated stress tests. Critical levels on each side are our 101.44 resistance and 97.11 support. Fundamentally, our 99.79 support turns resistance while we maintain our resistances of 100.28, 100.71, 101.44, and 101.98. To the downside, we hold our supports of 99.06, 98.16, 97.59, and 97.11 with fresh bottom-end of 96.33. The USD/JPY is currently exchanging at 99.10.
Crude Oil
Crude futures are recovering Wednesday morning after Tuesday’s selloff in reaction to disappointing PPI and Retail Sales data. Yesterday’s downturn was not significant and crude has risen back above the highly psychological $50/bbl. The indecisive movements reflect investor uncertainty concerning the economy as a whole. While investors are not willing to give up on the uptrend, the downtrend is still sitting in the driver’s seat with investors unwilling to commit above our 2nd tier downtrend line. The highly psychological $50/bbl area continues to play a lead role as prices are gravitating here. Naturally, the key driving force behind the demand structure of crude is the overall health of the U.S. economy. Energy investors are waiting to see if the recovery in U.S. equities is legitimate before extending the rally in crude beyond the present fundamental hindrances. Investors are now being bombarded by news from the supply side after OPEC stayed quiet for quite some time. Crude imports are rising considerably from Russia and Brazil, likely an aftereffect from Obama improving upon diplomatic relations with the two nations. OPEC is vocalizing its discontent over the development since a rise in imports from Russia and Brazil dilute their massive production cuts implemented over the last 6 months. The new sources of crude are placing a new downward pressure on the price and could have a noticeable impact for the time being. We wouldn’t be surprised to see a more aggressive reaction from OPEC if the trend continues with the possibility of more production cuts on the table. Despite the development supply-wise, crude futures should still maintain a positive correlation with the S&P futures, though they may be less inclined to fully participate in any large movements to the upside. The U.S. will release weekly crude inventories today, normally a market mover. Fundamentally, we maintain our resistances of $50.39/bbl, $51.03/bbl, $51.59/bbl, $52.02/bbl, and $52.49/bbl. To the downside, we hold our supports of $49.81/bbl, $49.28/bbl, $48.87/bbl, $48.37/bbl, and $47.79/bbl. Crude futures are presently trading at $50.29/bbl.
Gold
Gold is finding strength in our 1st tier downtrend line despite U.S. equities trading higher pre-market. The precious metal has given us no reason to alter our negative stance and gold certainly has its hands full with the psychological $900/oz and our 2nd tier downtrend line. We anticipate gold to gravitate towards its natural negative correlation with U.S. equities during critical moments. Hence, the precious metal is still hinting at another breakout in the S&P futures with the back of the uptrend broken. However, there is always the possibility of gold jolting back into its uptrend should U.S. equities collapse. On the other hand, the precious metal could head lower with equities should deflation worries escalate. In other words, gold’s behavioral correlation with U.S. equities could prove unpredictable should the waters boil. One thing we can tell you, gold has certainly made a commitment to the downtrend with its rapid decline from 4/2-4/6. Fundamentally our $894.46 support turns resistance while we hold our resistances of $897.82/oz, $900.76/oz, $904.26/oz, and $908.72/oz. To the downside, we maintain our supports of $890.64/oz, $887.21/oz, $884.10/oz, and $880.71 with fresh bottom-end of $877.70/oz. Gold is currently trading at $894.20/oz.
S&P
The S&P futures experienced considerable losses Tuesday after the U.S. released disappointing PPI and Retail Sales data. The futures weakened below April 4 highs and our 3rd tier downtrend line before popping back above the trend line Wednesday morning. A surprising declining PPI reignites fears of deflation while the negative Retail Sales number reinforces the fact that U.S. consumption is buckling under the pressure of the economic downturn. Yesterday’s data points raise a red flag concerning the possibility of a head fake in economic data and shows the worst of the economic crisis may not be behind us after all. The U.S. has more key economic releases on tap for today, including CPI, TIC Long-Term Purchases, Industrial Production, the Empire State Manufacturing Index, and weekly Crude Oil Inventories. Therefore, we anticipate volatility to heat up during today’s session. Though Intel’s earnings after the bell beat analyst expectations, the lack of guidance from the semiconductor bell-weather raises another red flag and heightens investor uncertainty. If major corporations are unable to project performance over the next quarter, it becomes increasingly difficult for chief operators to design budgets to maximize earnings from desirable loan structures. With the barrage of red flags investor uncertainty is rising concerning the viability of a economic turnaround. However, we caution against become overly-pessimistic right now since the S&P futures are still healthy fundamentally. Investors may wait until the results from the government’s stress tests of financials before passing judgment trend-wise. That being said, the obstacles are stacking up against the uptrend. Not only do the futures still need to pass through February highs, but April highs now serve as an intermediate barrier to the upside. However, the highly psychological 800 level defends the S&P futures to the downside. Fundamentally, we maintain our supports of 834.75, 829.5, 825, and 818.5 with fresh bottom-end of 812.75. To the topside, our 839.75 support turns resistance while we hold our resistances of 845.25, 850.5, 856.25, and 862.5. The S&P futures are currently trading at 835.25.
30 Year
The 30 Year T-Bond futures made a nice move to the upside yesterday as U.S. equities headed south in reaction to negative economic data. However, once again, the 30 Year futures failed to make a game-changing move to the upside. The lack of follow through to the upside paints a distorted picture. On one hand, we could be witnessing insufficient demand in the bond market to compensate for the massive supply of treasuries created to fund the government’s stimulus measures despite the Fed’s use of quantitative easing. On the other hand, the 30 Year’s reluctance to the upside bolsters the argument for a recovery in U.S. equities, and consequently America’s economy. Without sufficient evidence it’s difficult to commit to one argument or the other, showing the 30 Year futures may be a lagging indicator right now. That being said, the 30 Year futures are well cemented in their downtrend and will need to make some sizable moves to the upside to alter their path. We placed a new 2nd tier downtrend line on our chart to give you a picture of where some of the trend-setting obstacles stand. Fundamentally, we hold our resistances of 127.64, 127.89, 128.31, and 128.73 with fresh top-end of 1 130.06. To the downside, our 127.28 resistance turns support while we hold our supports of 127.04 126.69, 126.45, and 126.19. The 30 Year T-Bond futures are presently trading at 128 00.0.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized 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.
