EUR/USD
The EUR/USD bounced well from the inflection point of our 2nd tier uptrend and 3rd tier downtrend lines. Though the volume wasn’t significant, the action was enough to get the EUR/USD beyond 4/30, and subsequently 4/13 highs. Since the volume to the upside wasn’t anything out of the ordinary, we could witness the present rally top out soon. Hence, although we are still bullish on the EUR/USD trend-wise, we are neutral/negative for the near-term. Short term evaluation aside, the EUR/USD continues to make noteworthy strides fundamentally.
Given U.S. equities continue their path to recovery, the EUR/USD should follow suit considering their strong positive correlation. The EUR/USD is comfortably above our uptrend lines, and the main downtrend barriers left is our 3rd tier downtrend line and the psychological 1.35 level. If the currency pair can manage to climb through these two barriers, there could be little holding back the EUR/USD from logging exciting gains. Meanwhile, we expect to EUR/USD to remain positive correlated with the S&P futures for the next few sessions as investors eagerly await the ECB’s meeting on Thursday. That being said, we wouldn’t be surprised to see U.S. equities hesitate with the S&P sitting at its critical 900 level while investors also await the release stress tests on Thursday.
The ECB’s meeting on Thursday will be critical since the ECB governors have offered various opinions as to the direction of the central bank’s monetary policy. The ECB has maintained its benchmark rate at a respectable level while avoiding liquidity measures such as quantitative easing. The uncertainty among investors could keep any uptrend in check as investors eagerly await results from the meeting. The ECB’s announcement will come on the same day as America’s stress test results, meaning we expect to see a large spike in volatility on Thursday.
Fundamentally, we maintain resistances of 1.3389, 1.3420, 1.3442, 1.3479, and 1.351. To the downside, we hold supports of 1.3358, 1.3323, 1.3283, 1.3241, and 1.3211. The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier. The EUR/USD is currently exchanging at 1.3390.
GBP/USD
Over the last 24 hours the Cable has made some of the most notable strides amongst the major Dollar pairs. The GBP/USD has bolted past the highly psychological 1.50 level and April highs in a single swing. Strength in the Cable comes after Britain hit another home run with its Construction PMI release. Hence, we have seen encouraging improvements in most all of Britain’s economy, giving investors little reason to hesitate in sending the GBP/USD higher since U.S. equities are on a roll. However, we haven’t seen a confirmation in volume on the Cable’s up-bars, meaning the currency pair could soon top out in the near-term as investors may hesitate with the S&P 900 while awaiting stress test Thursday. Despite our near-term hesitation, we maintain our bullish outlook trend wise. The GBP/USD continues to surpass key technical barriers and is leaving our downtrend lines behind, meaning the uptrend should have considerable room to grow.
Britain will release Nationwide Consumer Confidence later in today’s session followed by the Halifax HPI and Services PMI early Wednesday. Last week’s Nationwide HPI came in well above analyst expectations, so it will be interesting to see if tomorrow’s Halifax number relays the same message of stabilization in home prices. America’s Pending Home Sales blew by expectations yesterday, so a resounding message of recovery in housing builds a solid foundation for the uptrend to spring from.
Fundamentally, we find resistances of 1.5160, 1.5213, 1.5257, 1.5306, and 1.5349. To the downside, we see supports of 1.5059, 1.5017, 1.4988, 1.4946, and 1.4902. 1.50 becomes a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5152.
USD/JPY
The USD/JPY is trying to build on Friday’s bounce, flirting with the idea of retesting 100 while the S&P futures battle their own demons at 900. Unfortunately, yesterday’s run was backed by light volume, meaning the currency pair’s current upswing could be short-lived. The USD/JPY encounters its first test in our 3rd tier downtrend line, followed by March highs. We notice a head and shoulders formation with the USD/JPY on its right shoulder as we type. Therefore, bulls will be looking for any near-term upward movement to be supported by heavy volume if the currency pair is ready to surpass 100 and April highs.
While the upside has its apparent hurdles, the downside is backed by our 2nd tier uptrend line and the resilience the uptrend has shown thus far in 2009. The USD/JPY’s re-approach of 100 comes with the S&P futures attempting to climb above their critical 900 level. Therefore, the significance of the moment is relayed by each as investors await Thursday’s ECB meeting and the release of America’s stress test results.
Fundamentally, we find resistances of 99.20, 99.79, 100.56, 101.43, and 102.14. To the downside, we see supports of 98.56, 97.98, 97.11, 96.33, and 95.58. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 98.68.
Crude Oil
Crude futures stabilized yesterday on minimal volume as they took a breather from impressive gains. The futures are attempting to position themselves for a rally today as they realize April highs suddenly aren’t so far away. Meanwhile, crude should exhibit a positive correlation with U.S. equities until tomorrow’s weekly inventory release. However, crude could log a slight pullback today towards our 3rd tier downtrend line as U.S. equities struggle with the critical 900 level. Additionally, yesterday’s weak volume is a signal that we could see some near-term negativity. Regardless of near-term activity, crude has made statement after statement concerning a commitment to its uptrend. The last tests seem to be our 3rd tier uptrend line and April highs. If crude can climb above these two obstacles, its gains could really accelerate. Meanwhile, a drop beneath our 3rd tier downtrend line could result in sharp near-term losses.
Volatility should pick up by tomorrow with the U.S. releasing its ADP Non-Farm Employment Change data followed by weekly inventories. Crude inventories continue to come in far above analyst expectations, but the rise in supply doesn’t seem to bother investors as they hone in on a global economic recovery. Appreciation of the Pound and Euro should help international crude demand for the dollar denominated commodity. Additionally, improvements in production and consumption data points around the globe are very encouraging signs for crude’s uptrend.
Fundamentally, we find supports of $53.97/bbl, $53.63/bbl, $53.19/bbl, $52.80/bbl, and $52.29/bbl. To the topside, we see resistances of $54.34/bbl, $54.77/bbl, $55.24/bbl, $55.58/bbl, and $55.94/bbl. $50/bbl turns becomes a key psychological cushion again while $55/bbl serves as a psychological cushion. Crude is presently trading at $54.00/bbl.
Gold
Gold rallied strongly yesterday, shooting towards 4/27 highs while exhibiting an odd positive correlation with U.S. equities. The precious metal continues to be a puzzling read as it abruptly alters its correlative patterns. However, we don’t view gold’s gains as critical since volume has been normal while 4/27 and April highs remain intact. Should the S&P fly past 900 in the near to mid-term, we would expect the negative correlation between equities and gold to play out. Therefore, due to the relative strength of the S&P futures, we maintain our bullish outlook on gold unless the precious metal should climb past 4/27 highs on strong volume. Then the next stop would likely be our 3rd tier downtrend line.
Gold continues to bounce around the critical $900/oz level. Could it be that investors aren’t quite sold yet on an economic recovery, and are covering their bases until Thursday’s stress test? Another reason behind gold’s relative strength could be a sign that China is adding more gold to its reserves in an effort to diversify from the Dollar. However, these explanations are merely speculation until we receive some definitive evidence.
Fundamentally we find supports of $911.85/oz, $910.11/oz, $908.81/oz, $906.85/oz, and $905.11/oz. To the topside, we see resistances of $914.45/oz, $915.97/oz, $917.71/oz, $920.10/oz, and $922.49/oz. Gold is currently trading at $912.45/oz.
S&P
The S&P futures are mellowing out Tuesday after yesterday’s impressive really past the key 900 level. The important move came after Pending Home Sales blew by analyst expectations, signaling the housing market could finally be stabilizing. With the general results of the stress tests leaked and seemingly priced in, the S&P is making a confirmation that the uptrend and economic recovery may be for real. Meanwhile, the Libor Rate is finally back below 1%, showing credit fears are easing and banks can finally lend to one another at a reasonable rate. To add to the positivity, economic data points from China to Britain are sending the same message that manufacturing and consumption are recovering. Therefore, analysts are increasingly hopeful that the worst of the economic crisis is behind us.
However, before we get ahead of ourselves, yesterday’s large percentage gain wasn’t backed by the significant volume one would expect when attacking such a critical psychological barrier. Therefore, we could witness muted gains/profit taking in today’s session as investors await tomorrow’s non-farm employment change and stress test Thursday. One should not underestimate the importance of 900, meaning we could see retracements towards this level in the near-term should the futures should jump above. Additionally, we should consider the scale of the run the S&P has made of late, and some investors may be interested in taking some profits.
Near-term hesitation aside, the S&P futures continue to run along our uptrend and we have little reason to change our bullish outlook trend-wise right now. The GBP/USD made a strong bull move of its own yesterday while crude approaches its yearly highs. Therefore, the correlations and economic data releases are all falling in line behind the horns of the S&P.
Fundamentally, we see resistance of 905. To the downside, we find supports of 898, 889.25, 881.25, and 877. The S&P futures are currently trading at 897.75.
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 bounced well from the inflection point of our 2nd tier uptrend and 3rd tier downtrend lines. Though the volume wasn’t significant, the action was enough to get the EUR/USD beyond 4/30, and subsequently 4/13 highs. Since the volume to the upside wasn’t anything out of the ordinary, we could witness the present rally top out soon. Hence, although we are still bullish on the EUR/USD trend-wise, we are neutral/negative for the near-term. Short term evaluation aside, the EUR/USD continues to make noteworthy strides fundamentally.
Given U.S. equities continue their path to recovery, the EUR/USD should follow suit considering their strong positive correlation. The EUR/USD is comfortably above our uptrend lines, and the main downtrend barriers left is our 3rd tier downtrend line and the psychological 1.35 level. If the currency pair can manage to climb through these two barriers, there could be little holding back the EUR/USD from logging exciting gains. Meanwhile, we expect to EUR/USD to remain positive correlated with the S&P futures for the next few sessions as investors eagerly await the ECB’s meeting on Thursday. That being said, we wouldn’t be surprised to see U.S. equities hesitate with the S&P sitting at its critical 900 level while investors also await the release stress tests on Thursday.
The ECB’s meeting on Thursday will be critical since the ECB governors have offered various opinions as to the direction of the central bank’s monetary policy. The ECB has maintained its benchmark rate at a respectable level while avoiding liquidity measures such as quantitative easing. The uncertainty among investors could keep any uptrend in check as investors eagerly await results from the meeting. The ECB’s announcement will come on the same day as America’s stress test results, meaning we expect to see a large spike in volatility on Thursday.
Fundamentally, we maintain resistances of 1.3389, 1.3420, 1.3442, 1.3479, and 1.351. To the downside, we hold supports of 1.3358, 1.3323, 1.3283, 1.3241, and 1.3211. The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier. The EUR/USD is currently exchanging at 1.3390.
GBP/USD
Over the last 24 hours the Cable has made some of the most notable strides amongst the major Dollar pairs. The GBP/USD has bolted past the highly psychological 1.50 level and April highs in a single swing. Strength in the Cable comes after Britain hit another home run with its Construction PMI release. Hence, we have seen encouraging improvements in most all of Britain’s economy, giving investors little reason to hesitate in sending the GBP/USD higher since U.S. equities are on a roll. However, we haven’t seen a confirmation in volume on the Cable’s up-bars, meaning the currency pair could soon top out in the near-term as investors may hesitate with the S&P 900 while awaiting stress test Thursday. Despite our near-term hesitation, we maintain our bullish outlook trend wise. The GBP/USD continues to surpass key technical barriers and is leaving our downtrend lines behind, meaning the uptrend should have considerable room to grow.
Britain will release Nationwide Consumer Confidence later in today’s session followed by the Halifax HPI and Services PMI early Wednesday. Last week’s Nationwide HPI came in well above analyst expectations, so it will be interesting to see if tomorrow’s Halifax number relays the same message of stabilization in home prices. America’s Pending Home Sales blew by expectations yesterday, so a resounding message of recovery in housing builds a solid foundation for the uptrend to spring from.
Fundamentally, we find resistances of 1.5160, 1.5213, 1.5257, 1.5306, and 1.5349. To the downside, we see supports of 1.5059, 1.5017, 1.4988, 1.4946, and 1.4902. 1.50 becomes a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5152.
USD/JPY
The USD/JPY is trying to build on Friday’s bounce, flirting with the idea of retesting 100 while the S&P futures battle their own demons at 900. Unfortunately, yesterday’s run was backed by light volume, meaning the currency pair’s current upswing could be short-lived. The USD/JPY encounters its first test in our 3rd tier downtrend line, followed by March highs. We notice a head and shoulders formation with the USD/JPY on its right shoulder as we type. Therefore, bulls will be looking for any near-term upward movement to be supported by heavy volume if the currency pair is ready to surpass 100 and April highs.
While the upside has its apparent hurdles, the downside is backed by our 2nd tier uptrend line and the resilience the uptrend has shown thus far in 2009. The USD/JPY’s re-approach of 100 comes with the S&P futures attempting to climb above their critical 900 level. Therefore, the significance of the moment is relayed by each as investors await Thursday’s ECB meeting and the release of America’s stress test results.
Fundamentally, we find resistances of 99.20, 99.79, 100.56, 101.43, and 102.14. To the downside, we see supports of 98.56, 97.98, 97.11, 96.33, and 95.58. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 98.68.
Crude Oil
Crude futures stabilized yesterday on minimal volume as they took a breather from impressive gains. The futures are attempting to position themselves for a rally today as they realize April highs suddenly aren’t so far away. Meanwhile, crude should exhibit a positive correlation with U.S. equities until tomorrow’s weekly inventory release. However, crude could log a slight pullback today towards our 3rd tier downtrend line as U.S. equities struggle with the critical 900 level. Additionally, yesterday’s weak volume is a signal that we could see some near-term negativity. Regardless of near-term activity, crude has made statement after statement concerning a commitment to its uptrend. The last tests seem to be our 3rd tier uptrend line and April highs. If crude can climb above these two obstacles, its gains could really accelerate. Meanwhile, a drop beneath our 3rd tier downtrend line could result in sharp near-term losses.
Volatility should pick up by tomorrow with the U.S. releasing its ADP Non-Farm Employment Change data followed by weekly inventories. Crude inventories continue to come in far above analyst expectations, but the rise in supply doesn’t seem to bother investors as they hone in on a global economic recovery. Appreciation of the Pound and Euro should help international crude demand for the dollar denominated commodity. Additionally, improvements in production and consumption data points around the globe are very encouraging signs for crude’s uptrend.
Fundamentally, we find supports of $53.97/bbl, $53.63/bbl, $53.19/bbl, $52.80/bbl, and $52.29/bbl. To the topside, we see resistances of $54.34/bbl, $54.77/bbl, $55.24/bbl, $55.58/bbl, and $55.94/bbl. $50/bbl turns becomes a key psychological cushion again while $55/bbl serves as a psychological cushion. Crude is presently trading at $54.00/bbl.
Gold
Gold rallied strongly yesterday, shooting towards 4/27 highs while exhibiting an odd positive correlation with U.S. equities. The precious metal continues to be a puzzling read as it abruptly alters its correlative patterns. However, we don’t view gold’s gains as critical since volume has been normal while 4/27 and April highs remain intact. Should the S&P fly past 900 in the near to mid-term, we would expect the negative correlation between equities and gold to play out. Therefore, due to the relative strength of the S&P futures, we maintain our bullish outlook on gold unless the precious metal should climb past 4/27 highs on strong volume. Then the next stop would likely be our 3rd tier downtrend line.
Gold continues to bounce around the critical $900/oz level. Could it be that investors aren’t quite sold yet on an economic recovery, and are covering their bases until Thursday’s stress test? Another reason behind gold’s relative strength could be a sign that China is adding more gold to its reserves in an effort to diversify from the Dollar. However, these explanations are merely speculation until we receive some definitive evidence.
Fundamentally we find supports of $911.85/oz, $910.11/oz, $908.81/oz, $906.85/oz, and $905.11/oz. To the topside, we see resistances of $914.45/oz, $915.97/oz, $917.71/oz, $920.10/oz, and $922.49/oz. Gold is currently trading at $912.45/oz.
S&P
The S&P futures are mellowing out Tuesday after yesterday’s impressive really past the key 900 level. The important move came after Pending Home Sales blew by analyst expectations, signaling the housing market could finally be stabilizing. With the general results of the stress tests leaked and seemingly priced in, the S&P is making a confirmation that the uptrend and economic recovery may be for real. Meanwhile, the Libor Rate is finally back below 1%, showing credit fears are easing and banks can finally lend to one another at a reasonable rate. To add to the positivity, economic data points from China to Britain are sending the same message that manufacturing and consumption are recovering. Therefore, analysts are increasingly hopeful that the worst of the economic crisis is behind us.
However, before we get ahead of ourselves, yesterday’s large percentage gain wasn’t backed by the significant volume one would expect when attacking such a critical psychological barrier. Therefore, we could witness muted gains/profit taking in today’s session as investors await tomorrow’s non-farm employment change and stress test Thursday. One should not underestimate the importance of 900, meaning we could see retracements towards this level in the near-term should the futures should jump above. Additionally, we should consider the scale of the run the S&P has made of late, and some investors may be interested in taking some profits.
Near-term hesitation aside, the S&P futures continue to run along our uptrend and we have little reason to change our bullish outlook trend-wise right now. The GBP/USD made a strong bull move of its own yesterday while crude approaches its yearly highs. Therefore, the correlations and economic data releases are all falling in line behind the horns of the S&P.
Fundamentally, we see resistance of 905. To the downside, we find supports of 898, 889.25, 881.25, and 877. The S&P futures are currently trading at 897.75.
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.
