EUR/USD
The EUR/USD continues its consolidation between our 2nd tier uptrend and downtrend lines, a sign that we could see a little near-term pop as investors bite on what may be oversold conditions. The EUR/USD is experiencing stability due to a better than expected Claimant Count Change number in Britain. However, any near-term gains could be mitigated due to the highly psychological 1.30 lying just above present levels. Hence, the EUR/USD should experience more relative consolidation over the next 24 hours as investors await the flood of manufacturing and services data tomorrow. Analysts are expecting the data points to improve slightly from last month’s release. If the numbers come in better anticipated, we could see a nice rally in the EUR/USD, and if the numbers disappoint vice/versa. Therefore, Euro investors should enjoy the calm of today as no news is good news. However, the fact the EUR/USD hasn’t been able to rally back past this area is a sign that the downtrend has its grip around the currency pair’s neck. Despite any near-term any gains that may be realized, we maintain our negative outlook on the EUR/USD trend wise. With increasing downward pressure on U.S. equities and the sustainability of the economic stabilization in doubt, the EUR/USD should remain in its damaged state unless news comes showing the serious problems stemming from the global financial crisis are behind us. Fundamentally, we maintain our supports of 1.2919, 1.2876, 1.2833, and 1.2800 with fresh bottom-end of 1.2756. To the topside, we hold our resistances of 1.2953, 1.3017, 1.3050, 1.3091, and 1.3126. The 1.30 area still serves as a psychological barrier with 1.25 becoming a key psychological cushion. The EUR/USD is currently exchanging at 1.2958.
GBP/USD
The Cable has been incredibly volatile today as investors digest important employment data and the CBI’s release of Britain’s budget for the new fiscal year. The GBP/USD shot up earlier after the Claimant Count Change number came in much better than anticipated. However, the currency pair has reversed course after Darling outlined the new budget and reduced his forecast for GDP growth. Today’s data also comes with a negative asterisk attached since the average earnings data was much worse than expected, signaling consumption could take another big hit. However, the downturn of the Cable today has much to do with the CBI’s new budget. Darling described a preference to avoid new economic stimulus measures, meaning if a second wave from the economic crisis does reach shore, Britain may be left without a life raft. To add to today’s negativity is a very discouraging earnings release from Morgan Stanley. The bleak earnings report from MS reignites the concern that the troubles for the financials are far from over. Furthermore, we do now know whether the accounting changes to mark-to-market were responsible for the surprisingly the positive earnings from other major U.S. financials. Since the financial industry comprises such a large proportion of Britain’s GDP, any setback in financials threatens the stability of the Cable. The GBP/USD has collapsed beneath 4/20 lows and the psychological 1.45 mark, meaning the losses could pile on towards our 1st tier uptrend line. Any retracement beyond this trend line could yield incredibly a negative performance from the GBP/USD in the near-term. We maintain our negative stance on the GBP/USD due to the aforementioned reasons. Fundamentally, we find resistances of 1.4478, 1.4532, 1.4579, 1.4612, and 1.4677. The 1.45 area is turning into a psychological barrier with 1.40 acting as a key psychological cushion. To the downside, we see supports of 1.4438, 1.4391, 1.4362, 1.4319, and 1.4283. The GBP/USD is currently exchanging at 1.4462.
USD/JPY
The USD/JPY is heading south as our 1st tier uptrend line and 2nd tier downtrend lines reach an inflection point despite a better than expected Trade Balance from Japan earlier today. Japan’s Trade Balance showed slight improvements in exports, although nothing to pour champagne over. We feel the Trade Balance data could be a lagging indicator as it may not reflect the present export environment. What we do see is a currency pair succumbing to its negative tendencies, following U.S. equities lower. The strong positive correlation between the two is returning to the fray as the highly psychological 100 level fades into the distance. The obstacles to the upside are mounting, and the inability for the USD/JPY to capitalize on its advantageous position in March shows the currency pair is not ready to commit to an end in the global financial crisis. While investor focus may be on the EUR/USD and GBP/USD right now due to the USD/JPY’s lack of volatility lately, we encourage traders to keep a close eye on this currency pair. If the USD/JPY were to decline below our 97.11 support and 1st tier downtrend line, we could see losses accelerate rapidly in the near-term. The performance of the USD/JPY will likely depend on U.S. equities. If the S&P futures experience further weakness the USD/JPY may be inclined to follow suit. Fundamentally, we find resistances of 98.56, 99.20, 99.79, 100.28, and 100.71. To the downside, we see supports of 97.59, 97.11, 96.33, and 95.55 with fresh bottom-end of 95.04. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 97.66.
Crude Oil
Crude recovered some of its losses yesterday as U.S. equities posted solid gains on the session. However, the stabilization is proving temporary as the futures head south again today. We’ve noticed a considerable spike in volume recently, likely due to bulls taking advantage of what they view as oversold conditions. Despite buyers coming to the forefront, the futures have made a clear commitment to the downtrend by setting new Aprils and bidding farewell to the important $50/bbl level. Negative corporate earnings are obviously having a profound impact on Crude and the outlook for production and consumption. We expect the high volatility to continue throughout the rest of the week as today’s Crude Oil Inventories kick off a stream of important data releases over the next couple days. Investors are expecting this week’s inventories to come in at 2.3 million barrels, an improvement over last week’s surprising 5.6 million reading. If the inventories are to surprise to the upside again, we could see pressure build to the downside. However, if inventories come in lower expected we could witness a solid rally. If the futures manage to climb back above $50/bbl, crude could post large near-term gains. Regardless, crude futures should maintain an overall positive correlation with U.S. equities since corporate performance has a direct impact on production, unemployment, and consequently consumption. Fundamentally, we find resistances of $48.94/bbl, $49.29/bbl, $49.70/bbl, $50.21/bbl, and $51.02/bbl. To the downside, we see supports of $48.33/bbl, $48.00/bbl, $47.58/bbl, $47.23/bbl, and $46.58/bbl. The crude futures are presently trading at $48.44/bbl.
Gold
The rally in gold cooled yesterday as the precious metal failed to test the highly psychological $900/oz mark. Gold is calmly walking along today despite a downturn in the S&P futures after a negative earnings release from Morgan Stanley. The recent performance of gold has been erratic at best, and it’s difficult to gauge what the precious metal has on its mind. While seemingly committing to the downtrend at the beginning of April, gold has since re-approached $900/oz twice. However, the precious metal hasn’t risen above the key level, and the downtrend is still in the driver’s seat as far as we’re concerned. On the other hand, if U.S. equities were to take a turn for the worst, investors may instinctively run towards gold as a safe-haven during uncertain times. Although, we can’t forget gold declined with equities during the height of the economic crisis, sending a message of deflation. Therefore, if CPI and PPI were to fall dramatically, gold could follow equities to the downside. Fundamentally we find resistances of $887.21/oz, $890.64/oz, $894.37/oz, $897.24/oz, and $900.41/oz. To the downside, we see supports of $884.54/oz, $880.71/oz, $877.70/oz, $875.17/oz, and $872.40/oz. Gold is currently trading at $885.70/oz.
30 Year
The downtrend is really taking hold today as the 30 Year T-Bond futures look to fall beneath 4/20 lows. Volume is picking up and we notice a tight positive correlation with U.S. equities. The pressure remains to the downside as the 30 Year futures trade well below our 2nd and 3rd tier downtrend lines. The futures are headed towards fundamentally significant territory, particularly March lows. Though the lows seem far away right now, they could be reached faster than one may anticipate. The negative performance of the 30 year creates an interesting scenario. The Federal Reserve is trying to keep rates low by using quantitative easing. However, the governmental purchase of its own debt may not be sufficient enough to satisfy the massive supply need to fund the stimulus measures. It’s difficult for us not to maintain our negative outlook on the 30 Year futures with few positives working in their favor. Fundamentally, we find resistances of 125.19, 125.53, 125.81, 126.20, and 126.69. To the downside, we see supports of 124.78, 124.35, 124.03, 123.69, and 123.34. The 30 Year T-Bond futures are presently trading at 125 01.0.
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 continues its consolidation between our 2nd tier uptrend and downtrend lines, a sign that we could see a little near-term pop as investors bite on what may be oversold conditions. The EUR/USD is experiencing stability due to a better than expected Claimant Count Change number in Britain. However, any near-term gains could be mitigated due to the highly psychological 1.30 lying just above present levels. Hence, the EUR/USD should experience more relative consolidation over the next 24 hours as investors await the flood of manufacturing and services data tomorrow. Analysts are expecting the data points to improve slightly from last month’s release. If the numbers come in better anticipated, we could see a nice rally in the EUR/USD, and if the numbers disappoint vice/versa. Therefore, Euro investors should enjoy the calm of today as no news is good news. However, the fact the EUR/USD hasn’t been able to rally back past this area is a sign that the downtrend has its grip around the currency pair’s neck. Despite any near-term any gains that may be realized, we maintain our negative outlook on the EUR/USD trend wise. With increasing downward pressure on U.S. equities and the sustainability of the economic stabilization in doubt, the EUR/USD should remain in its damaged state unless news comes showing the serious problems stemming from the global financial crisis are behind us. Fundamentally, we maintain our supports of 1.2919, 1.2876, 1.2833, and 1.2800 with fresh bottom-end of 1.2756. To the topside, we hold our resistances of 1.2953, 1.3017, 1.3050, 1.3091, and 1.3126. The 1.30 area still serves as a psychological barrier with 1.25 becoming a key psychological cushion. The EUR/USD is currently exchanging at 1.2958.
GBP/USD
The Cable has been incredibly volatile today as investors digest important employment data and the CBI’s release of Britain’s budget for the new fiscal year. The GBP/USD shot up earlier after the Claimant Count Change number came in much better than anticipated. However, the currency pair has reversed course after Darling outlined the new budget and reduced his forecast for GDP growth. Today’s data also comes with a negative asterisk attached since the average earnings data was much worse than expected, signaling consumption could take another big hit. However, the downturn of the Cable today has much to do with the CBI’s new budget. Darling described a preference to avoid new economic stimulus measures, meaning if a second wave from the economic crisis does reach shore, Britain may be left without a life raft. To add to today’s negativity is a very discouraging earnings release from Morgan Stanley. The bleak earnings report from MS reignites the concern that the troubles for the financials are far from over. Furthermore, we do now know whether the accounting changes to mark-to-market were responsible for the surprisingly the positive earnings from other major U.S. financials. Since the financial industry comprises such a large proportion of Britain’s GDP, any setback in financials threatens the stability of the Cable. The GBP/USD has collapsed beneath 4/20 lows and the psychological 1.45 mark, meaning the losses could pile on towards our 1st tier uptrend line. Any retracement beyond this trend line could yield incredibly a negative performance from the GBP/USD in the near-term. We maintain our negative stance on the GBP/USD due to the aforementioned reasons. Fundamentally, we find resistances of 1.4478, 1.4532, 1.4579, 1.4612, and 1.4677. The 1.45 area is turning into a psychological barrier with 1.40 acting as a key psychological cushion. To the downside, we see supports of 1.4438, 1.4391, 1.4362, 1.4319, and 1.4283. The GBP/USD is currently exchanging at 1.4462.
USD/JPY
The USD/JPY is heading south as our 1st tier uptrend line and 2nd tier downtrend lines reach an inflection point despite a better than expected Trade Balance from Japan earlier today. Japan’s Trade Balance showed slight improvements in exports, although nothing to pour champagne over. We feel the Trade Balance data could be a lagging indicator as it may not reflect the present export environment. What we do see is a currency pair succumbing to its negative tendencies, following U.S. equities lower. The strong positive correlation between the two is returning to the fray as the highly psychological 100 level fades into the distance. The obstacles to the upside are mounting, and the inability for the USD/JPY to capitalize on its advantageous position in March shows the currency pair is not ready to commit to an end in the global financial crisis. While investor focus may be on the EUR/USD and GBP/USD right now due to the USD/JPY’s lack of volatility lately, we encourage traders to keep a close eye on this currency pair. If the USD/JPY were to decline below our 97.11 support and 1st tier downtrend line, we could see losses accelerate rapidly in the near-term. The performance of the USD/JPY will likely depend on U.S. equities. If the S&P futures experience further weakness the USD/JPY may be inclined to follow suit. Fundamentally, we find resistances of 98.56, 99.20, 99.79, 100.28, and 100.71. To the downside, we see supports of 97.59, 97.11, 96.33, and 95.55 with fresh bottom-end of 95.04. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 97.66.
Crude Oil
Crude recovered some of its losses yesterday as U.S. equities posted solid gains on the session. However, the stabilization is proving temporary as the futures head south again today. We’ve noticed a considerable spike in volume recently, likely due to bulls taking advantage of what they view as oversold conditions. Despite buyers coming to the forefront, the futures have made a clear commitment to the downtrend by setting new Aprils and bidding farewell to the important $50/bbl level. Negative corporate earnings are obviously having a profound impact on Crude and the outlook for production and consumption. We expect the high volatility to continue throughout the rest of the week as today’s Crude Oil Inventories kick off a stream of important data releases over the next couple days. Investors are expecting this week’s inventories to come in at 2.3 million barrels, an improvement over last week’s surprising 5.6 million reading. If the inventories are to surprise to the upside again, we could see pressure build to the downside. However, if inventories come in lower expected we could witness a solid rally. If the futures manage to climb back above $50/bbl, crude could post large near-term gains. Regardless, crude futures should maintain an overall positive correlation with U.S. equities since corporate performance has a direct impact on production, unemployment, and consequently consumption. Fundamentally, we find resistances of $48.94/bbl, $49.29/bbl, $49.70/bbl, $50.21/bbl, and $51.02/bbl. To the downside, we see supports of $48.33/bbl, $48.00/bbl, $47.58/bbl, $47.23/bbl, and $46.58/bbl. The crude futures are presently trading at $48.44/bbl.
Gold
The rally in gold cooled yesterday as the precious metal failed to test the highly psychological $900/oz mark. Gold is calmly walking along today despite a downturn in the S&P futures after a negative earnings release from Morgan Stanley. The recent performance of gold has been erratic at best, and it’s difficult to gauge what the precious metal has on its mind. While seemingly committing to the downtrend at the beginning of April, gold has since re-approached $900/oz twice. However, the precious metal hasn’t risen above the key level, and the downtrend is still in the driver’s seat as far as we’re concerned. On the other hand, if U.S. equities were to take a turn for the worst, investors may instinctively run towards gold as a safe-haven during uncertain times. Although, we can’t forget gold declined with equities during the height of the economic crisis, sending a message of deflation. Therefore, if CPI and PPI were to fall dramatically, gold could follow equities to the downside. Fundamentally we find resistances of $887.21/oz, $890.64/oz, $894.37/oz, $897.24/oz, and $900.41/oz. To the downside, we see supports of $884.54/oz, $880.71/oz, $877.70/oz, $875.17/oz, and $872.40/oz. Gold is currently trading at $885.70/oz.
30 Year
The downtrend is really taking hold today as the 30 Year T-Bond futures look to fall beneath 4/20 lows. Volume is picking up and we notice a tight positive correlation with U.S. equities. The pressure remains to the downside as the 30 Year futures trade well below our 2nd and 3rd tier downtrend lines. The futures are headed towards fundamentally significant territory, particularly March lows. Though the lows seem far away right now, they could be reached faster than one may anticipate. The negative performance of the 30 year creates an interesting scenario. The Federal Reserve is trying to keep rates low by using quantitative easing. However, the governmental purchase of its own debt may not be sufficient enough to satisfy the massive supply need to fund the stimulus measures. It’s difficult for us not to maintain our negative outlook on the 30 Year futures with few positives working in their favor. Fundamentally, we find resistances of 125.19, 125.53, 125.81, 126.20, and 126.69. To the downside, we see supports of 124.78, 124.35, 124.03, 123.69, and 123.34. The 30 Year T-Bond futures are presently trading at 125 01.0.
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.
