Daily Market Commentary
EUR/USD Continues its Surge After Positive Global Data
The EUR/USD has rocketed past all of our previous downtrend lines, bursting out of the gates sooner than we had anticipated. Investors are shrugging off the much weaker than expected retail sales data out of Germany, choosing to focus on the U.S., China, and Britain instead. All countries released stronger than expected manufacturing PMI data points, with Britain’s registering growth (50.8) for the first time since May 2008. The higher than expected PMIs bode well for the EU’s large manufacturing sector. The EU should benefit as the global economy pieces together consumption, so the EUR/USD is benefitting from today’s wave of positive news.
Investors are continuing their return to risk, resulting in a broad-based depreciation of the Dollar. The EUR/USD is setting new 2009 highs, locking its sights on the psychological 1.45 mark, the next psychological barrier. The EUR/USD appears to have some more near-term upward mobility since the currency pair has leapt past our downtrend line forming through September 22nd and December 18th highs. These highs are the next points of heavy resistance, yet they reside around the 1.47 zone. Hence, it’s clear this rally has legs. Speaking of which, the EUR/USD is registering large volume on the buy-side, indicating bulls are putting their money where their mouth is.
Despite the rampant optimism, the S&P futures are trading at 1000 mark right now. While the flood of today’s positive news could send the futures past 1000, it’s difficult to believe this highly psychological level won’t put up a good fight once it’s breached. Therefore, the EUR/USD could hit a wall soon and consolidate should the S&P futures behave as we suspect. There is a ton of important U.S. data left to be seen over the next two days, and investors may want to wait and see how the other indicators fare. Data will be relatively quiet on the EU front until Thursday’s ECB monetary policy decision. However, should U.S. and British economic data outperform leading up to the meeting, the EUR/USD may already price in a neutral/positive result from the ECB. Regardless, the EUR/USD is making a clear case for its uptrend, giving a green light. It would take a very large, negative shock to derail the recovery in the EUR/USD.
Present Price: 1.4413
Resistances: 1.4441, 1.4476, 1.4506, 1.4546
Supports: 1.4391, 1.4348, 1.4305, 1.4266, 1.4242
Psychological: 1.45
GBP/USD Runs Wild after Global PMI Numbers
The Cable is continuing its remarkable run, jetting towards 1.70 in a hurry as we anticipated. The Cable has busted through all of our trend lines, setting fresh 2009 highs in the process and making its case for a climb back to pre-crisis levels. The EUR/USD is setting new 2009 highs today as well, indicating the significance of today’s movement. However, 1.70 should play a psychological role for the near-term with the S&P dangling just below 1000. While all correlations are confirming the uptrend in the GBP/USD, 1000 should prove to be a tough battle for the S&P even if the level is breached temporarily. The Cable has been on such a run as of late, we would not be surprised to see the currency pair cool soon as investors anticipate the wave of data and central bank meetings over the next few days.
The Cable is getting its positive boost from better than expected manufacturing PMI data at home and abroad. Britain’s manufacturing PMI ended its contraction, registering growth (50.8) for the first time since May 2008. America’s manufacturing PMI data also headed towards growth, falling just short of the neutral 50 mark. Additionally, the markets are reacting to positive manufacturing and export data flows from China. The signs of a global recovery in manufacturing coupled with a better than expected Q2 earnings season are driving the Cable to confirm its uptrend.
The wave of economic data will only grow in size tomorrow, with Britain releasing its Halifax HPI and construction PMI data points while the U.S. announcing housing and pricing data of its own. Better than expected economic data points would likely fuel the Cable’s rally since investors would price in the BOE confirming its decision to cap QE funding at its meeting on Thursday. If the BOE and ECB both keep their alternative liquidity plans in check, investors would take this as a sign that the central bank governors are comfortable with the recovery taking root.
Meanwhile, investors should keep an eye on the S&P’s interaction with 1000. If 1000 turns into a dense area of resistance the GBP/USD may opt to consolidate around 1.70. However, if the S&P futures leave 1000, the GBP/USD could have added upward mobility due to its positive momentum.
Present Price: 1.6923
Resistances: 1.6939, 1.6969, 1.7025, 1.7064, 1.7104
Supports: 1.6864, 1.6832, 1.6815, 1.6768, 1.6731
Psychological: 1.70
USD/JPY Balances at 95 after Huge Gains in the GBP/USD, EUR/USD, Gold
The USD/JPY has waded back above the psychological 95 level, looking to react positively to the inflection point of our 1st tier uptrend and 2nd tier downtrend lines. The EUR/USD, GBP/USD, and gold are registering huge technical gains today after better than expected manufacturing data. The USD/JPY is unwillingly participating to the upside since the currency pair is ultimately positively correlated to a global economic recovery. While the USD/JPY hasn’t registered nearly as significant of a movement as its correlations, the USD/JPY could show a delayed reaction should the markets continue to qualify a legitimate recovery. Therefore, the USD/JPY will likely sit tight until we see how the S&P futures handle their highly psychological 1000 level. Should the S&P confirm a 1000+ future, the USD/JPY would likely join the party to the upside at this point.
Meanwhile, the USD/JPY will likely remain tethered to its highly psychological 95 level for the immediate-term. The USD/JPY’s near-term resistances are 95, July 31 highs, and our 3rd tier downtrend line. The currency pair will fight to stay above our 1st tier trend line in the meantime and solidify a solid base it can build from. Investors will be digesting a large amount of data and central bank meetings over the next few sessions, meaning we don’t expect FX volatility to abate anytime soon.
Present Price: 95.27
Resistances: 95.41, 95.73, 96.33, 96.77, 96.96
Supports: 94.99, 94.49, 93.82, 93.28, 92.90
Psychological: 95
Gold Leaves $950/oz behind with Broad Depreciation of the Dollar
Gold has climbed above our 2nd tier downtrend line and previous July highs as the GBP/USD and EUR/USD burst higher. Both currency pairs are setting fresh 2009 highs, a bullish confirmation on their part. Gold is enjoying its positive correlation, heading towards our 3rd tier downtrend line in a hurry. However, June 10 highs and the 3rd tier downtrend line could prove to be worthy immediate-term obstacles with the S&P futures dangling just beneath their highly psychological 1000 level. Even though the EUR/USD, GBP/USD, and crude futures have done their parts, 1000 should be a challenge for the S&P if psychological precedence holds true. Therefore, even if the S&P futures should poke above 1000, we expect a retracement and ensuing near-term battle. As a result, gold could enter a similar conflict with its aforementioned barriers. On the other hand, most of the S&P’s correlations are confirming the uptrend, meaning that a 1000+ S&P may be in the cards. Hence, the near-term future for gold is bright even if the immediate-term has its obstacles.
Present Price: $961.65/oz
Resistances: $962.24/oz, $963.81/oz, $965.26/oz, $966.91/oz, $968.60/oz
Supports: $961.00/oz, $959.34/oz, $958.12/oz, $956.32/oz, $954.39/oz
Psychological: $950/oz
Crude Post Past $70/bbl on Manufacturing Data
Crude futures have eclipsed the psychological $70/bbl after British and U.S. manufacturing data points came in above analyst expectations. Investors are also digesting positive manufacturing and export data surfacing from China. The positive manufacturing data is tagging onto the success of last week’s better than expected GDP data along with an overwhelming response to the U.S. government’s ‘cash for clunkers’ auto purchase program. Meanwhile, the encouraging improvements in today’s manufacturing PMI data points are improving the outlook for demand of crude. Crude futures have received heavy buy-side volume over the past few sessions, confirming the significance of crude’s movement.
Another engine driving crude futures higher is the large depreciation of the Dollar against both the Pound and the Euro. The EUR/USD and GBP/USD have set new 2009 highs today, making large bullish moves of their own. The weakness of the Dollar makes Dollar-denominated commodities such as crude cheaper to import, thereby increasing demand. However, crude futures are approaching their 2009 highs along with our new 3rd tier downtrend line, meaning the futures have a few near-term barriers ahead of them to overcome. We notice similar obstacles in gold to the upside as the precious metal faces our 3rd tier downtrend line and June highs. Additionally, the S&P futures are trading right at their highly psychological 1000 level. As a result, crude futures may top out today and head for a little near-term consolidation.
While the S&P’s correlations are supporting a breakout in U.S. equities, we expect 1000 to provide near-term resistance due to its psychological significance. Even if the S&P should break through 1000 in the immediate-term, we’d expect a retracement and consolidation. As a result, immediate-term gains in crude may be limited. On the other hand, we have a ton of economic data left on this week’s calendar. If economic data outperforms globally and the ECB/BOE meetings provide favorable monetary policy decisions, S&P 1000 may be eclipsed sooner rather than later.
Altogether, the markets are making aggressive moves to the upside, favoring the concept of a global economic recovery. As a result, crude’s uptrend is all but confirmed. It will be interesting to see how crude inventories fare this week after last week’s surprising overflow. If crude inventories come in shallow and indicate last week’s rise was a fluke, crude futures could experience another push to the upside. However, we have a lot of data between now and then, so we will have to see how the futures react to tomorrow’s housing and pricing data points.
Present Price: $71.54/bbl
Resistances: $71.90/bbl, $72.09/bbl, $72.70/bbl, $73.01/bbl, $73.48/bbl
Supports: $71.37/bbl, $71.15/bbl, $70.69/bbl, $70.33/bbl, $69.91/bbl
Psychological: $75/bbl, $70/bbl
S&P Futures Make Move for 1000 Amid Rapid Dollar Deflation
The S&P futures are sitting just below 1000 with bulls begging to see how the futures fare at 1000+. The S&P seems eager and ready for the challenge, yet it should be a challenge nonetheless if psychological precedents hold true. Investors are energized by the better than expected manufacturing data points from around the globe, including America’s ISM manufacturing PMI. The ISM manufacturing PMI number continues to dig out of the depths of its contraction, almost reaching growth (48.9). Global stimulus packages and a depreciating Greenback are improving the outlook of manufacturers, planting the seeds of an economic recovery.
Speaking of the Greenback, the Dollar has depreciated heavily against both the Euro and Pound over the last two trading sessions. Both the EUR/USD and GBP/USD have set new 2009 highs today, making technical bullish breakouts to the upside. Meanwhile, gold has pushed past $950/oz and crude $70/bbl. Therefore, all of the S&P’s correlations are helping pull the futures past 1000 as investors are encouraged by all of the positive signs across the board. 2nd quarter earnings fared better than expected while economic data outpaces skeptic expectations.
Economic data is just getting warmed up. The U.S. will release pending home sales data along with price and personal income numbers tomorrow. Britain will also release its Halifax HPI along with construction PMI. Therefore, market volatility should increase as the week progresses, especially considering the BOE and ECB will announce their monetary policy decisions on Thursday. If economic data between now and then outperforms, we’d expect both central banks to stand pat on their alternative liquidity measures. If events unfold favorably over the next few days, the S&P may be able to overcome the highly psychological 1000 zone sooner than anticipated. However, mixed results would likely mire the S&P futures in a 1000 trading area.
Even if the S&P futures should clear 1000 today, we don’t expect the psychological level to give in so easily. We’d expect a retracement and some consolidation nearby considering its psychological significance. Furthermore, U.S. equities have been on a tear lately, and a little pop above 1000 could be an opportune time for investors to lock in some profits. Regardless, the S&P and its correlations are making a strong statement and the uptrend is clearly intact.
Present Price: 998.25
Resistances: 998.75
Supports: 993.25, 986, 981.50, 978.75, 971.50
Psychological: 1000
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.
EUR/USD Continues its Surge After Positive Global Data
The EUR/USD has rocketed past all of our previous downtrend lines, bursting out of the gates sooner than we had anticipated. Investors are shrugging off the much weaker than expected retail sales data out of Germany, choosing to focus on the U.S., China, and Britain instead. All countries released stronger than expected manufacturing PMI data points, with Britain’s registering growth (50.8) for the first time since May 2008. The higher than expected PMIs bode well for the EU’s large manufacturing sector. The EU should benefit as the global economy pieces together consumption, so the EUR/USD is benefitting from today’s wave of positive news.
Investors are continuing their return to risk, resulting in a broad-based depreciation of the Dollar. The EUR/USD is setting new 2009 highs, locking its sights on the psychological 1.45 mark, the next psychological barrier. The EUR/USD appears to have some more near-term upward mobility since the currency pair has leapt past our downtrend line forming through September 22nd and December 18th highs. These highs are the next points of heavy resistance, yet they reside around the 1.47 zone. Hence, it’s clear this rally has legs. Speaking of which, the EUR/USD is registering large volume on the buy-side, indicating bulls are putting their money where their mouth is.
Despite the rampant optimism, the S&P futures are trading at 1000 mark right now. While the flood of today’s positive news could send the futures past 1000, it’s difficult to believe this highly psychological level won’t put up a good fight once it’s breached. Therefore, the EUR/USD could hit a wall soon and consolidate should the S&P futures behave as we suspect. There is a ton of important U.S. data left to be seen over the next two days, and investors may want to wait and see how the other indicators fare. Data will be relatively quiet on the EU front until Thursday’s ECB monetary policy decision. However, should U.S. and British economic data outperform leading up to the meeting, the EUR/USD may already price in a neutral/positive result from the ECB. Regardless, the EUR/USD is making a clear case for its uptrend, giving a green light. It would take a very large, negative shock to derail the recovery in the EUR/USD.
Present Price: 1.4413
Resistances: 1.4441, 1.4476, 1.4506, 1.4546
Supports: 1.4391, 1.4348, 1.4305, 1.4266, 1.4242
Psychological: 1.45
GBP/USD Runs Wild after Global PMI Numbers
The Cable is continuing its remarkable run, jetting towards 1.70 in a hurry as we anticipated. The Cable has busted through all of our trend lines, setting fresh 2009 highs in the process and making its case for a climb back to pre-crisis levels. The EUR/USD is setting new 2009 highs today as well, indicating the significance of today’s movement. However, 1.70 should play a psychological role for the near-term with the S&P dangling just below 1000. While all correlations are confirming the uptrend in the GBP/USD, 1000 should prove to be a tough battle for the S&P even if the level is breached temporarily. The Cable has been on such a run as of late, we would not be surprised to see the currency pair cool soon as investors anticipate the wave of data and central bank meetings over the next few days.
The Cable is getting its positive boost from better than expected manufacturing PMI data at home and abroad. Britain’s manufacturing PMI ended its contraction, registering growth (50.8) for the first time since May 2008. America’s manufacturing PMI data also headed towards growth, falling just short of the neutral 50 mark. Additionally, the markets are reacting to positive manufacturing and export data flows from China. The signs of a global recovery in manufacturing coupled with a better than expected Q2 earnings season are driving the Cable to confirm its uptrend.
The wave of economic data will only grow in size tomorrow, with Britain releasing its Halifax HPI and construction PMI data points while the U.S. announcing housing and pricing data of its own. Better than expected economic data points would likely fuel the Cable’s rally since investors would price in the BOE confirming its decision to cap QE funding at its meeting on Thursday. If the BOE and ECB both keep their alternative liquidity plans in check, investors would take this as a sign that the central bank governors are comfortable with the recovery taking root.
Meanwhile, investors should keep an eye on the S&P’s interaction with 1000. If 1000 turns into a dense area of resistance the GBP/USD may opt to consolidate around 1.70. However, if the S&P futures leave 1000, the GBP/USD could have added upward mobility due to its positive momentum.
Present Price: 1.6923
Resistances: 1.6939, 1.6969, 1.7025, 1.7064, 1.7104
Supports: 1.6864, 1.6832, 1.6815, 1.6768, 1.6731
Psychological: 1.70
USD/JPY Balances at 95 after Huge Gains in the GBP/USD, EUR/USD, Gold
The USD/JPY has waded back above the psychological 95 level, looking to react positively to the inflection point of our 1st tier uptrend and 2nd tier downtrend lines. The EUR/USD, GBP/USD, and gold are registering huge technical gains today after better than expected manufacturing data. The USD/JPY is unwillingly participating to the upside since the currency pair is ultimately positively correlated to a global economic recovery. While the USD/JPY hasn’t registered nearly as significant of a movement as its correlations, the USD/JPY could show a delayed reaction should the markets continue to qualify a legitimate recovery. Therefore, the USD/JPY will likely sit tight until we see how the S&P futures handle their highly psychological 1000 level. Should the S&P confirm a 1000+ future, the USD/JPY would likely join the party to the upside at this point.
Meanwhile, the USD/JPY will likely remain tethered to its highly psychological 95 level for the immediate-term. The USD/JPY’s near-term resistances are 95, July 31 highs, and our 3rd tier downtrend line. The currency pair will fight to stay above our 1st tier trend line in the meantime and solidify a solid base it can build from. Investors will be digesting a large amount of data and central bank meetings over the next few sessions, meaning we don’t expect FX volatility to abate anytime soon.
Present Price: 95.27
Resistances: 95.41, 95.73, 96.33, 96.77, 96.96
Supports: 94.99, 94.49, 93.82, 93.28, 92.90
Psychological: 95
Gold Leaves $950/oz behind with Broad Depreciation of the Dollar
Gold has climbed above our 2nd tier downtrend line and previous July highs as the GBP/USD and EUR/USD burst higher. Both currency pairs are setting fresh 2009 highs, a bullish confirmation on their part. Gold is enjoying its positive correlation, heading towards our 3rd tier downtrend line in a hurry. However, June 10 highs and the 3rd tier downtrend line could prove to be worthy immediate-term obstacles with the S&P futures dangling just beneath their highly psychological 1000 level. Even though the EUR/USD, GBP/USD, and crude futures have done their parts, 1000 should be a challenge for the S&P if psychological precedence holds true. Therefore, even if the S&P futures should poke above 1000, we expect a retracement and ensuing near-term battle. As a result, gold could enter a similar conflict with its aforementioned barriers. On the other hand, most of the S&P’s correlations are confirming the uptrend, meaning that a 1000+ S&P may be in the cards. Hence, the near-term future for gold is bright even if the immediate-term has its obstacles.
Present Price: $961.65/oz
Resistances: $962.24/oz, $963.81/oz, $965.26/oz, $966.91/oz, $968.60/oz
Supports: $961.00/oz, $959.34/oz, $958.12/oz, $956.32/oz, $954.39/oz
Psychological: $950/oz
Crude Post Past $70/bbl on Manufacturing Data
Crude futures have eclipsed the psychological $70/bbl after British and U.S. manufacturing data points came in above analyst expectations. Investors are also digesting positive manufacturing and export data surfacing from China. The positive manufacturing data is tagging onto the success of last week’s better than expected GDP data along with an overwhelming response to the U.S. government’s ‘cash for clunkers’ auto purchase program. Meanwhile, the encouraging improvements in today’s manufacturing PMI data points are improving the outlook for demand of crude. Crude futures have received heavy buy-side volume over the past few sessions, confirming the significance of crude’s movement.
Another engine driving crude futures higher is the large depreciation of the Dollar against both the Pound and the Euro. The EUR/USD and GBP/USD have set new 2009 highs today, making large bullish moves of their own. The weakness of the Dollar makes Dollar-denominated commodities such as crude cheaper to import, thereby increasing demand. However, crude futures are approaching their 2009 highs along with our new 3rd tier downtrend line, meaning the futures have a few near-term barriers ahead of them to overcome. We notice similar obstacles in gold to the upside as the precious metal faces our 3rd tier downtrend line and June highs. Additionally, the S&P futures are trading right at their highly psychological 1000 level. As a result, crude futures may top out today and head for a little near-term consolidation.
While the S&P’s correlations are supporting a breakout in U.S. equities, we expect 1000 to provide near-term resistance due to its psychological significance. Even if the S&P should break through 1000 in the immediate-term, we’d expect a retracement and consolidation. As a result, immediate-term gains in crude may be limited. On the other hand, we have a ton of economic data left on this week’s calendar. If economic data outperforms globally and the ECB/BOE meetings provide favorable monetary policy decisions, S&P 1000 may be eclipsed sooner rather than later.
Altogether, the markets are making aggressive moves to the upside, favoring the concept of a global economic recovery. As a result, crude’s uptrend is all but confirmed. It will be interesting to see how crude inventories fare this week after last week’s surprising overflow. If crude inventories come in shallow and indicate last week’s rise was a fluke, crude futures could experience another push to the upside. However, we have a lot of data between now and then, so we will have to see how the futures react to tomorrow’s housing and pricing data points.
Present Price: $71.54/bbl
Resistances: $71.90/bbl, $72.09/bbl, $72.70/bbl, $73.01/bbl, $73.48/bbl
Supports: $71.37/bbl, $71.15/bbl, $70.69/bbl, $70.33/bbl, $69.91/bbl
Psychological: $75/bbl, $70/bbl
S&P Futures Make Move for 1000 Amid Rapid Dollar Deflation
The S&P futures are sitting just below 1000 with bulls begging to see how the futures fare at 1000+. The S&P seems eager and ready for the challenge, yet it should be a challenge nonetheless if psychological precedents hold true. Investors are energized by the better than expected manufacturing data points from around the globe, including America’s ISM manufacturing PMI. The ISM manufacturing PMI number continues to dig out of the depths of its contraction, almost reaching growth (48.9). Global stimulus packages and a depreciating Greenback are improving the outlook of manufacturers, planting the seeds of an economic recovery.
Speaking of the Greenback, the Dollar has depreciated heavily against both the Euro and Pound over the last two trading sessions. Both the EUR/USD and GBP/USD have set new 2009 highs today, making technical bullish breakouts to the upside. Meanwhile, gold has pushed past $950/oz and crude $70/bbl. Therefore, all of the S&P’s correlations are helping pull the futures past 1000 as investors are encouraged by all of the positive signs across the board. 2nd quarter earnings fared better than expected while economic data outpaces skeptic expectations.
Economic data is just getting warmed up. The U.S. will release pending home sales data along with price and personal income numbers tomorrow. Britain will also release its Halifax HPI along with construction PMI. Therefore, market volatility should increase as the week progresses, especially considering the BOE and ECB will announce their monetary policy decisions on Thursday. If economic data between now and then outperforms, we’d expect both central banks to stand pat on their alternative liquidity measures. If events unfold favorably over the next few days, the S&P may be able to overcome the highly psychological 1000 zone sooner than anticipated. However, mixed results would likely mire the S&P futures in a 1000 trading area.
Even if the S&P futures should clear 1000 today, we don’t expect the psychological level to give in so easily. We’d expect a retracement and some consolidation nearby considering its psychological significance. Furthermore, U.S. equities have been on a tear lately, and a little pop above 1000 could be an opportune time for investors to lock in some profits. Regardless, the S&P and its correlations are making a strong statement and the uptrend is clearly intact.
Present Price: 998.25
Resistances: 998.75
Supports: 993.25, 986, 981.50, 978.75, 971.50
Psychological: 1000
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.
