EUR/USD
The EUR/USD is rallying slightly, awakening from its consolidative slumber earlier in the week. The currency pair hopped above our 2nd tier downtrend line, but is having difficulties with our 3rd tier uptrend line. Therefore, we’re cautiously optimistic. However, the EUR/USD has climbed over the highly psychological 1.30 level. The relative strength in the Euro comes after all of the manufacturing and services PMI data beat estimates. Though the number all indicate contraction, at least an upward swing in momentum is forming. If the currency pair can sustain gains from present levels, then it may have something worthwhile to build from. The EUR/USD will ultimately follow U.S. equities due to their tight economic interconnectivity. As a result, any positive developments in the EUR/USD could be squashed if U.S. equities tumble. On the other hand, the Euro should keep some relative strength due to the performance of recent economic data unless tomorrow’s business climate release comes in below analyst expectations. If the EUR/USD can close above our 3rd tier uptrend line on the 4-hour we could see a nice pop towards 4/10 lows. On the flipside, any decline could be deflected by our 2nd tier downtrend line. However, we wouldn’t be surprised to see the EUR/USD consolidate around 1.30 should U.S. equities move lower today. Fundamentally, we find supports of 1.3017, 1.2982, 1.2953, 1.2919, and 1.2833. To the topside, we see resistances of 1.3050, 1.3091, 1.3126, 1.3167, and 1.3211. The EUR/USD is currently exchanging at 1.3017.
GBP/USD
The Cable is returning some of yesterday’s gains after deflecting off the inflection point of our 1st tier downtrend and 2nd tier uptrend lines. Today’s weakness comes in reaction to a weaker than expected number from the CBI regarding its expectation for industrial orders. Investors didn’t like too much of what the CBI’s chancellor had to say yesterday concerning Britain’s new budget and the health of the nation’s economy. Though the GBP/USD managed to fight back above the psychological 1.45 level, the downtrend is still playing a lead role in today’s action. On an encouraging now, the Cable did find comfort in our 1st tier uptrend line, meaning we could witness some consolidation as the currency pair waits for the inflection point of our 1st tier uptrend and downtrend lines before making a more concrete directional decision. If the Cable manages to climb above our 2nd tier uptrend line, we could witness large near-term gains. On the contrary, should the currency pair retrace beneath our 1st tier uptrend lines, the downtrend could pick up speed. As with the EUR/USD, the Cable’s performance ultimately relies upon U.S. equities and results from the highly-anticipated stress tests coming May 4th. As we anticipate consolidation around 1.30 in the EUR/USD, we wouldn’t be surprised to see the same around 1.45 for the GBP/USD. Fundamentally, we find resistances of 1.4579, 1.4612, 1.4677, 1.4730, and 1.4773. To the downside, we see supports of 1.4532, 1.4480, 1.4438, 1.4391, and 1.4362. The GBP/USD is currently exchanging at 1.4544.
USD/JPY
The USD/JPY is experiencing some solid support as bulls put up a fight around our 97.59 level. Economic recovery hopefuls aren’t so eager to give up on their vision, and are doing what they can to prevent a retraction below our key 1st tier downtrend line. Therefore, even though the USD/JPY is trading below our 1st tier uptrend line, the possibility of the currency pair continuing its battle with 100 isn’t lost. That being said, despite the strong defense by the bulls, the USD/JPY should ultimately follow its positive correlation with U.S. equities like the rest of the major dollar pairs. Hence, should the S&P futures collapse, the USD/JPY may be inclined to follow suit, and vice versa. However, the Japanese economy is faring worse than America’s right now, meaning any movements to the downside could be limited compared to those logged in U.S. equities. On the flip side, were the S&P futures to break out above 900 we could see investors making a larger commitment to risk-taking and consequently a 100-plus reality in the USD/JPY. Investors will be keeping a close eye on earnings and forecasts coming from the major Japanese automakers over the next couple weeks. Weaker than expected performances from the automakers could help strengthen the USD/JPY. Meanwhile, our 1st tier downtrend line still serves as a key cushion to the downside. Losses could accelerate should the currency pair dip beneath our 1st tier. Fundamentally, we hold our resistances of 98.56, 99.20, 99.79, 100.28, and 100.71. To the downside, we maintain our 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 98.12.
Gold
Gold is overcoming the opposing downward forces and is fighting with April 15 highs and the key psychological $900/oz level. The recovery in the precious metal is pretty incredible and the rally could really take off should gold climb comfortably above $900/oz. The negative correlation with U.S. equities is in full swing and the precious metal is trading above our 3rd tier downtrend line after weaker than expected existing home sales and weekly unemployment claims. However, we don’t expect bears to let gold get past $900/oz so easily. Therefore, the precious metal is entering what could be an intense battleground as investors lay stakes on trend. Hence, we wouldn’t be surprised to see volume pick up today. Gold’s psychological dilemma reflects a growing uncertainty in the S&P futures. Should investors commit to a $900/oz+ reality they would also be turning their backs on the rally in U.S. equities. As a result, the next two trading days could prove to be critical as for as the near-term trend for markets is concerned. Fundamentally we find resistances of $900.41/oz, $903.83/oz, $905.85/oz, $907.64/oz, $909.66/oz, and $913.47/oz. To the downside, we see supports of $897.24/oz, $894.37/oz, $890.64/oz, $887.91/oz, and $885.44/oz. Gold is currently trading at $897.55/oz.
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 rallying slightly, awakening from its consolidative slumber earlier in the week. The currency pair hopped above our 2nd tier downtrend line, but is having difficulties with our 3rd tier uptrend line. Therefore, we’re cautiously optimistic. However, the EUR/USD has climbed over the highly psychological 1.30 level. The relative strength in the Euro comes after all of the manufacturing and services PMI data beat estimates. Though the number all indicate contraction, at least an upward swing in momentum is forming. If the currency pair can sustain gains from present levels, then it may have something worthwhile to build from. The EUR/USD will ultimately follow U.S. equities due to their tight economic interconnectivity. As a result, any positive developments in the EUR/USD could be squashed if U.S. equities tumble. On the other hand, the Euro should keep some relative strength due to the performance of recent economic data unless tomorrow’s business climate release comes in below analyst expectations. If the EUR/USD can close above our 3rd tier uptrend line on the 4-hour we could see a nice pop towards 4/10 lows. On the flipside, any decline could be deflected by our 2nd tier downtrend line. However, we wouldn’t be surprised to see the EUR/USD consolidate around 1.30 should U.S. equities move lower today. Fundamentally, we find supports of 1.3017, 1.2982, 1.2953, 1.2919, and 1.2833. To the topside, we see resistances of 1.3050, 1.3091, 1.3126, 1.3167, and 1.3211. The EUR/USD is currently exchanging at 1.3017.
GBP/USD
The Cable is returning some of yesterday’s gains after deflecting off the inflection point of our 1st tier downtrend and 2nd tier uptrend lines. Today’s weakness comes in reaction to a weaker than expected number from the CBI regarding its expectation for industrial orders. Investors didn’t like too much of what the CBI’s chancellor had to say yesterday concerning Britain’s new budget and the health of the nation’s economy. Though the GBP/USD managed to fight back above the psychological 1.45 level, the downtrend is still playing a lead role in today’s action. On an encouraging now, the Cable did find comfort in our 1st tier uptrend line, meaning we could witness some consolidation as the currency pair waits for the inflection point of our 1st tier uptrend and downtrend lines before making a more concrete directional decision. If the Cable manages to climb above our 2nd tier uptrend line, we could witness large near-term gains. On the contrary, should the currency pair retrace beneath our 1st tier uptrend lines, the downtrend could pick up speed. As with the EUR/USD, the Cable’s performance ultimately relies upon U.S. equities and results from the highly-anticipated stress tests coming May 4th. As we anticipate consolidation around 1.30 in the EUR/USD, we wouldn’t be surprised to see the same around 1.45 for the GBP/USD. Fundamentally, we find resistances of 1.4579, 1.4612, 1.4677, 1.4730, and 1.4773. To the downside, we see supports of 1.4532, 1.4480, 1.4438, 1.4391, and 1.4362. The GBP/USD is currently exchanging at 1.4544.
USD/JPY
The USD/JPY is experiencing some solid support as bulls put up a fight around our 97.59 level. Economic recovery hopefuls aren’t so eager to give up on their vision, and are doing what they can to prevent a retraction below our key 1st tier downtrend line. Therefore, even though the USD/JPY is trading below our 1st tier uptrend line, the possibility of the currency pair continuing its battle with 100 isn’t lost. That being said, despite the strong defense by the bulls, the USD/JPY should ultimately follow its positive correlation with U.S. equities like the rest of the major dollar pairs. Hence, should the S&P futures collapse, the USD/JPY may be inclined to follow suit, and vice versa. However, the Japanese economy is faring worse than America’s right now, meaning any movements to the downside could be limited compared to those logged in U.S. equities. On the flip side, were the S&P futures to break out above 900 we could see investors making a larger commitment to risk-taking and consequently a 100-plus reality in the USD/JPY. Investors will be keeping a close eye on earnings and forecasts coming from the major Japanese automakers over the next couple weeks. Weaker than expected performances from the automakers could help strengthen the USD/JPY. Meanwhile, our 1st tier downtrend line still serves as a key cushion to the downside. Losses could accelerate should the currency pair dip beneath our 1st tier. Fundamentally, we hold our resistances of 98.56, 99.20, 99.79, 100.28, and 100.71. To the downside, we maintain our 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 98.12.
Gold
Gold is overcoming the opposing downward forces and is fighting with April 15 highs and the key psychological $900/oz level. The recovery in the precious metal is pretty incredible and the rally could really take off should gold climb comfortably above $900/oz. The negative correlation with U.S. equities is in full swing and the precious metal is trading above our 3rd tier downtrend line after weaker than expected existing home sales and weekly unemployment claims. However, we don’t expect bears to let gold get past $900/oz so easily. Therefore, the precious metal is entering what could be an intense battleground as investors lay stakes on trend. Hence, we wouldn’t be surprised to see volume pick up today. Gold’s psychological dilemma reflects a growing uncertainty in the S&P futures. Should investors commit to a $900/oz+ reality they would also be turning their backs on the rally in U.S. equities. As a result, the next two trading days could prove to be critical as for as the near-term trend for markets is concerned. Fundamentally we find resistances of $900.41/oz, $903.83/oz, $905.85/oz, $907.64/oz, $909.66/oz, and $913.47/oz. To the downside, we see supports of $897.24/oz, $894.37/oz, $890.64/oz, $887.91/oz, and $885.44/oz. Gold is currently trading at $897.55/oz.
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.
