EUR/USD
The EUR/USD is flying, bolting through all three of our downtrend lines after bouncing off our previous 1.2987 support. Investors came in defense of 1.30 with serious volume. The currency pair is presently testing April 24 highs and it appears to have more room to run should today’s data from the U.S. come in positively. The EUR/USD’s considerable strength is rooted in better than expected earnings from Spain’s Santander, the EU’s largest bank. Since we are in a financial crisis, positive earnings from banks can be a real driving force. However, all bets are off until the currency pair can plow through April 24 highs towards April 13 highs.
The sustainability of the EUR/USD’s momentum will rely upon today’s Prelim GDP number from the U.S. Therefore, keep an eye on the S&P futures since the two investment vehicles are positively correlated. If the S&P can break out of April highs, we expect the EUR/USD to follow suit. On the other hand, if the GDP data disappoints, we could see the EUR/USD buckle into its downtrend.
Altogether, the fact that the EUR/USD has rallied from 1.30 is a very positive sign for the uptrend. April 28 lows were comfortably above April 21 lows, and the EUR/USD has popped through our 3rd tier downtrend line. Therefore, the ingredients are on the table for a sustainable rally.
Fundamentally, we find resistances of 1.3261, 1.3329, 1.3389, 1.3420, and 1.3470. To the downside, we see supports of 1.3236, 1.3208, 1.3170, 1.3127, and 1.3089. The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier. The EUR/USD is currently exchanging at 1.3268.
GBP/USD
The Cable is climbing as investors find an appetite for risk ahead of America’s Prelim GDP number. A better than expected Prelim GDP would likely send the major Dollar pairs higher since it would give support to the argument that the global economy is stabilizing. Yesterday’s better than expected CBI Realized Sales data gives the Cable some added strength ahead of America’s GDP release. With Britain’s Nationwide Home Price Index coming tomorrow, the Cable should have some real directional ammo to play off of. A global sign of economic healing could add fire to the uptrend’s belly with the Cable creeping towards April highs. On the other hand, if the U.S. Prelim GDP number disappoints, we wouldn’t be surprised to witness a fire sale.
April highs and the highly psychological 1.50 level serve as the key obstacles towards a noteworthy uptrend in the Cable. Meanwhile, the GBP/USD still needs to fight through our 2nd tier downtrend line and 3rd tier uptrend line. The Cable has certainly built up a nice base since 4/20, which should act as solid near-term protection to the downside.
Fundamentally, we find resistances of 1.4773, 1.4826, 1.4870, 1.4905, and 1.4951. To the downside, we see supports of 1.4730, 1.4667, 1.4626, 1.45667, and 1.4532. 1.45 serves as a psychological cushion with 1.50 acting as a key psychological barrier. The GBP/USD is currently exchanging at 1.4742.
USD/JPY
The USD/JPY is at a standstill after yesterday’s banking holiday. The volume in the currency pair has been subdued as investors await the Prelim GDP data from the U.S. today, followed by Japan’s Prelim Industrial Production number in the evening PST. The USD/JPY is sitting at a key juncture, the inflection point of our 1st tier downtrend and 2nd tier uptrend lines. Therefore, we expect the USD/JPY to awaken with all of the incoming news.
Japan’s economy continues to struggle with an overall appreciated Yen squeezing the nation’s export industry. Therefore, investors have been reluctant to appreciate the USD/JPY considerably even during flights to safety. Both the Japanese and American economies remain mired in the economic crisis with long interest rate swaps close to nil. Hence, we continue to see the behavior of the USD/JPY reflect comparative economic performance.
The USD/JPY is still trading at dangerous levels and could be very close to giving way to its powerful downtrend. If this should happen, we could see a retest of March lows with the currency pair headed towards our 1st tier uptrend line. On the other hand, if economic data from Japan and the U.S. manages to outperform, the currency pair may choose to hop back above its 2nd tier uptrend line in a sign of stability.
Fundamentally, we maintain our resistances of 97.11, 97.98, 98.56, 99.20, and 99.79. To the downside, we hold our supports of 96.33, 95.55, 95.04, 94.48, and 93.57. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 96.78.
Crude Oil
Crude futures are backing away from our 3rd tier downtrend line in reaction to a much lower than expected Prelim GDP release from the U.S. A reduced forecast for GDP paints a dreary picture for consumption and production, reducing demand for crude. The U.S. will complete the equation later today with the release of weekly inventories. Crude inventories have blown past estimates the past two weeks, and if crude makes it three weeks straight we wouldn’t be surprised to see the present pullback pickup momentum.
On a positive note, crude futures are trading back above the highly
psychological $50/bbl mark. Despite the intense volatility in crude as of late, the futures tend to gravitate towards $50/bbl just as gold bobbles around $900/oz. Each are key psychological levels, and the inconsistency exhibited by both commodities reflects investors’ lack of directional commitment.
With the GDP number out of the way, crude’s performance today will be highly reliant on the inventories release. A close above our 3rd tier downtrend line on the 4-hr could lead to a significant move north beyond April 24 highs. To the downside, crude has a solid backbone build up since 4/20. However, any dive below 4/28 lows could test the patience of the uptrend.
Fundamentally, we find supports of $50.55/bbl, $49.99/bbl, $49.66/bbl, $49.22/bbl, and $48.78/bbl. To the topside, we see resistances of $51.13/bbl, $51.70/bbl, $52.08/bbl, $52.41/bbl, and $52.81/bbl. $50/bbl turns becomes a key psychological cushion again while $55/bbl serves as a psychological cushion. Crude is presently trading at $50.60/bbl.
Gold
Gold is popping back up to the all-important $900/oz level in reaction to a worse than expected Prelim GDP number from the U.S. Investors are opting for risk-averse investments today, though not to the extent one would expect after such a negative data release. The wild, unpredictable behavior of gold continues with investors uncertain which side of the trade to commit to.
Despite the high volatility, we do notice a gravitational pull towards $900/oz. Gold’s behavior is not surprising due to the fact that $900/oz is such a highly psychological level. A commitment either above or below represents investors taking sides on the issue of a global economic recovery. A sub-900 performance indicates economic recovery, while 900+ signals more troubling times ahead. Hence, the erratic behavior of the precious metal reflects the mixed investor sentiment prevalent in the marketplace.
Gold is presently wrestling with our 3rd tier uptrend and downtrend lines. Ultimately, the precious metal’s performance will likely depend on its negative correlation with U.S. equities.
Fundamentally we find resistances of $902.85/oz, $905.09/oz, $907.10/oz, $910.46/oz, and $913.15/oz. To the downside, we see supports of $898.38/oz, $896.36/oz, $893.45/oz, $890.10/oz, and $887.41/oz. Gold is currently trading at $899.50/oz.
S&P
The S&P futures are brushing aside a weaker than expected Prelim GDP release as they re-approach critical 2009 highs. The reaction of equities shows the worst has been priced in for now, and the S&P futures could be headed towards their highly anticipated breakout. Though the U.S. has more data on deck Thursday and Friday, the fundamentals have shifted in favor of the positive momentum. However, we have seen this before, including upward movements on April 24 and 27. Therefore, the S&P futures still run the chance of not punching through 2009 highs. The futures need to finally make good on their upward potential, or they may run the risk of compromising all of their hard work.
Correlation wise, the 30 Year T-Bond futures are on the cusp of crashing beneath their 2009 lows, a positive sign for the S&P futures. Additionally, the EUR/USD and Cable have pieced together nice rallies over the past 24 hours. However, smoke signals remain, including erratic performances in crude and gold combined with the USD/JPY flirting with the possibility of encountering steep losses.
Despite the mixed signals from the S&P’s correlations, the momentum is clearly to the upside. The next 24 hours could prove critical concerning the futures launching into new 2009 highs. Fasten your seatbelts, because we could be in for a wild ride.
Fundamentally, we find resistances of 867 and 872.5. To the downside, we see supports of 861.25, 855.25, 847, 840.25 and 833.5. The S&P futures are currently trading at 866.75.
30 Year
The 30 Year T-Bond sutures slammed below our 1st tier downtrend line yesterday as U.S. equities re-approached April highs. The 30 Year futures are playing with fire while trading a hair above 2009 lows. If the bottom were to fall out the gradual selloff we’ve been witnessing over the last month could turn into a massive selloff. All of this as the Treasury plans to auction off a record $71 billion in long-term debt to pay for the government’s stimulus measures.
Quantitative easing seems to be unable to quell the thirst of unprecedented Treasury auctions. As a result, we can induce that China is losing its appetite for U.S. debt, highlighted by the recent news release that China has increased its gold reserve by 76% since 2003. The incessant downtrend of the 30 Year futures raises a red flag with U.S. interest payments skyrocketing.
On the positive side, a plunge beneath 2009 lows could come with a breakout in U.S. equities due to the positive correlation between the two. Therefore, investors should keep a close eye on the S&P futures to see if they manage to rise above their 2009 highs.
Fundamentally, we find supports of 123.69 and 123.30. To the topside, we see resistances of 124.16, 124.47, 124.81, 125.09, and 125.47. The 30 Year futures are presently trading at 123 27.5.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as 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 flying, bolting through all three of our downtrend lines after bouncing off our previous 1.2987 support. Investors came in defense of 1.30 with serious volume. The currency pair is presently testing April 24 highs and it appears to have more room to run should today’s data from the U.S. come in positively. The EUR/USD’s considerable strength is rooted in better than expected earnings from Spain’s Santander, the EU’s largest bank. Since we are in a financial crisis, positive earnings from banks can be a real driving force. However, all bets are off until the currency pair can plow through April 24 highs towards April 13 highs.
The sustainability of the EUR/USD’s momentum will rely upon today’s Prelim GDP number from the U.S. Therefore, keep an eye on the S&P futures since the two investment vehicles are positively correlated. If the S&P can break out of April highs, we expect the EUR/USD to follow suit. On the other hand, if the GDP data disappoints, we could see the EUR/USD buckle into its downtrend.
Altogether, the fact that the EUR/USD has rallied from 1.30 is a very positive sign for the uptrend. April 28 lows were comfortably above April 21 lows, and the EUR/USD has popped through our 3rd tier downtrend line. Therefore, the ingredients are on the table for a sustainable rally.
Fundamentally, we find resistances of 1.3261, 1.3329, 1.3389, 1.3420, and 1.3470. To the downside, we see supports of 1.3236, 1.3208, 1.3170, 1.3127, and 1.3089. The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier. The EUR/USD is currently exchanging at 1.3268.
GBP/USD
The Cable is climbing as investors find an appetite for risk ahead of America’s Prelim GDP number. A better than expected Prelim GDP would likely send the major Dollar pairs higher since it would give support to the argument that the global economy is stabilizing. Yesterday’s better than expected CBI Realized Sales data gives the Cable some added strength ahead of America’s GDP release. With Britain’s Nationwide Home Price Index coming tomorrow, the Cable should have some real directional ammo to play off of. A global sign of economic healing could add fire to the uptrend’s belly with the Cable creeping towards April highs. On the other hand, if the U.S. Prelim GDP number disappoints, we wouldn’t be surprised to witness a fire sale.
April highs and the highly psychological 1.50 level serve as the key obstacles towards a noteworthy uptrend in the Cable. Meanwhile, the GBP/USD still needs to fight through our 2nd tier downtrend line and 3rd tier uptrend line. The Cable has certainly built up a nice base since 4/20, which should act as solid near-term protection to the downside.
Fundamentally, we find resistances of 1.4773, 1.4826, 1.4870, 1.4905, and 1.4951. To the downside, we see supports of 1.4730, 1.4667, 1.4626, 1.45667, and 1.4532. 1.45 serves as a psychological cushion with 1.50 acting as a key psychological barrier. The GBP/USD is currently exchanging at 1.4742.
USD/JPY
The USD/JPY is at a standstill after yesterday’s banking holiday. The volume in the currency pair has been subdued as investors await the Prelim GDP data from the U.S. today, followed by Japan’s Prelim Industrial Production number in the evening PST. The USD/JPY is sitting at a key juncture, the inflection point of our 1st tier downtrend and 2nd tier uptrend lines. Therefore, we expect the USD/JPY to awaken with all of the incoming news.
Japan’s economy continues to struggle with an overall appreciated Yen squeezing the nation’s export industry. Therefore, investors have been reluctant to appreciate the USD/JPY considerably even during flights to safety. Both the Japanese and American economies remain mired in the economic crisis with long interest rate swaps close to nil. Hence, we continue to see the behavior of the USD/JPY reflect comparative economic performance.
The USD/JPY is still trading at dangerous levels and could be very close to giving way to its powerful downtrend. If this should happen, we could see a retest of March lows with the currency pair headed towards our 1st tier uptrend line. On the other hand, if economic data from Japan and the U.S. manages to outperform, the currency pair may choose to hop back above its 2nd tier uptrend line in a sign of stability.
Fundamentally, we maintain our resistances of 97.11, 97.98, 98.56, 99.20, and 99.79. To the downside, we hold our supports of 96.33, 95.55, 95.04, 94.48, and 93.57. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 96.78.
Crude Oil
Crude futures are backing away from our 3rd tier downtrend line in reaction to a much lower than expected Prelim GDP release from the U.S. A reduced forecast for GDP paints a dreary picture for consumption and production, reducing demand for crude. The U.S. will complete the equation later today with the release of weekly inventories. Crude inventories have blown past estimates the past two weeks, and if crude makes it three weeks straight we wouldn’t be surprised to see the present pullback pickup momentum.
On a positive note, crude futures are trading back above the highly
psychological $50/bbl mark. Despite the intense volatility in crude as of late, the futures tend to gravitate towards $50/bbl just as gold bobbles around $900/oz. Each are key psychological levels, and the inconsistency exhibited by both commodities reflects investors’ lack of directional commitment.
With the GDP number out of the way, crude’s performance today will be highly reliant on the inventories release. A close above our 3rd tier downtrend line on the 4-hr could lead to a significant move north beyond April 24 highs. To the downside, crude has a solid backbone build up since 4/20. However, any dive below 4/28 lows could test the patience of the uptrend.
Fundamentally, we find supports of $50.55/bbl, $49.99/bbl, $49.66/bbl, $49.22/bbl, and $48.78/bbl. To the topside, we see resistances of $51.13/bbl, $51.70/bbl, $52.08/bbl, $52.41/bbl, and $52.81/bbl. $50/bbl turns becomes a key psychological cushion again while $55/bbl serves as a psychological cushion. Crude is presently trading at $50.60/bbl.
Gold
Gold is popping back up to the all-important $900/oz level in reaction to a worse than expected Prelim GDP number from the U.S. Investors are opting for risk-averse investments today, though not to the extent one would expect after such a negative data release. The wild, unpredictable behavior of gold continues with investors uncertain which side of the trade to commit to.
Despite the high volatility, we do notice a gravitational pull towards $900/oz. Gold’s behavior is not surprising due to the fact that $900/oz is such a highly psychological level. A commitment either above or below represents investors taking sides on the issue of a global economic recovery. A sub-900 performance indicates economic recovery, while 900+ signals more troubling times ahead. Hence, the erratic behavior of the precious metal reflects the mixed investor sentiment prevalent in the marketplace.
Gold is presently wrestling with our 3rd tier uptrend and downtrend lines. Ultimately, the precious metal’s performance will likely depend on its negative correlation with U.S. equities.
Fundamentally we find resistances of $902.85/oz, $905.09/oz, $907.10/oz, $910.46/oz, and $913.15/oz. To the downside, we see supports of $898.38/oz, $896.36/oz, $893.45/oz, $890.10/oz, and $887.41/oz. Gold is currently trading at $899.50/oz.
S&P
The S&P futures are brushing aside a weaker than expected Prelim GDP release as they re-approach critical 2009 highs. The reaction of equities shows the worst has been priced in for now, and the S&P futures could be headed towards their highly anticipated breakout. Though the U.S. has more data on deck Thursday and Friday, the fundamentals have shifted in favor of the positive momentum. However, we have seen this before, including upward movements on April 24 and 27. Therefore, the S&P futures still run the chance of not punching through 2009 highs. The futures need to finally make good on their upward potential, or they may run the risk of compromising all of their hard work.
Correlation wise, the 30 Year T-Bond futures are on the cusp of crashing beneath their 2009 lows, a positive sign for the S&P futures. Additionally, the EUR/USD and Cable have pieced together nice rallies over the past 24 hours. However, smoke signals remain, including erratic performances in crude and gold combined with the USD/JPY flirting with the possibility of encountering steep losses.
Despite the mixed signals from the S&P’s correlations, the momentum is clearly to the upside. The next 24 hours could prove critical concerning the futures launching into new 2009 highs. Fasten your seatbelts, because we could be in for a wild ride.
Fundamentally, we find resistances of 867 and 872.5. To the downside, we see supports of 861.25, 855.25, 847, 840.25 and 833.5. The S&P futures are currently trading at 866.75.
30 Year
The 30 Year T-Bond sutures slammed below our 1st tier downtrend line yesterday as U.S. equities re-approached April highs. The 30 Year futures are playing with fire while trading a hair above 2009 lows. If the bottom were to fall out the gradual selloff we’ve been witnessing over the last month could turn into a massive selloff. All of this as the Treasury plans to auction off a record $71 billion in long-term debt to pay for the government’s stimulus measures.
Quantitative easing seems to be unable to quell the thirst of unprecedented Treasury auctions. As a result, we can induce that China is losing its appetite for U.S. debt, highlighted by the recent news release that China has increased its gold reserve by 76% since 2003. The incessant downtrend of the 30 Year futures raises a red flag with U.S. interest payments skyrocketing.
On the positive side, a plunge beneath 2009 lows could come with a breakout in U.S. equities due to the positive correlation between the two. Therefore, investors should keep a close eye on the S&P futures to see if they manage to rise above their 2009 highs.
Fundamentally, we find supports of 123.69 and 123.30. To the topside, we see resistances of 124.16, 124.47, 124.81, 125.09, and 125.47. The 30 Year futures are presently trading at 123 27.5.
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as 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.
