Daily Market Commentary
EUR/USD Stays Range Bound Amid Protests in Greece
Greece experienced another wave of protests today as the government looks to implement its aggressive austerity package. However, the Euro has shown little reaction to the protests since Greece is still expected to go ahead with the austerity measures despite public disapproval. Meanwhile, the EUR/USD is hold strong within its tight trading range as it stands strong above 1.35 and previous March lows. The EUR/USD has shown quite a bit of resilience over the past month considering the extent of the currency pair’s downturn during January and the beginning of February. It will be interesting to see if the EUR/USD can manage a stop side breakout from this new base over the near-term, or whether another wave of selling disables the currency pair. Overall, the longer the EUR/USD can consolidate with a slight upward trajectory, the better off the currency pair could be in the medium-term. However, we will have to wait and see how events unfold. Meanwhile, our downtrend lines are drawing nearer, meaning the EUR/USD has the potential for some accelerated topside movements should fundamentals and/or psychological cooperate. We also take note that the EUR/USD is getting closer to our 5th tier downtrend line, which runs through the 1.4550 area. Hence, this gives you an idea of the kind of topside potential the currency pair has. The EU will continue to be quiet on the data wire for the remainder of the week, meaning tomorrow’s U.S. Retail Sales and UoM releases will likely garner the spotlight.
Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/8 and 3/3 highs. Our 4th tier downtrend line could serve as a key resistance since it runs through 2/9 highs, or the 1.38 area. As we explained before, our 5th tier could also serve as a key barrier in regards to the medium-term outlook for the EUR/USD since it runs through the 1.4550 area. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/5 and 3/2 lows. Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.
Present Price: 1.3630
Resistances: 1.3637, 1.3654, 1.3672, 1.3691, 1.3713, 1.3733
Supports: 1.3618, 1.3602, 1.3579, 1.3559, 1.3542, 1.3528
Psychological: March and February Lows, 1.35
GBP/USD Climbs Back Above 1.50
The Cable has bounced back above its psychological 1.50 level after Consumer Inflation expectations came in at 2.5%, a basis point above analyst expectations. The price gains we’ve seen in the UK over the past month could keep the BoE at bay, even if the central bank has stated that the price pop is just a result of a return of the VAT. Regardless, investors are sending the Cable higher in speculation that the BoE would likely hold off any increases in QE until it is sure rising prices are a temporary affair. Keep in mind that the BoE places extra emphasis on inflation, so pricing data usually has the potential to move the Pound. The U.S. Trade Balance revealed a smaller deficit than anticipated while Unemployment Claims logged a 6k decline. The initial reaction was negative for the risk trade, though the Dollar is pulling back again as we speak. In the precious metals sector investors should keep an eye on gold. Gold has tumbled back to its psychological $1100/oz level. Though the Dollar’s correlation with gold hasn’t been reliable lately, it will be interesting to see whether this pullback forebodes a Greenback movement across the board. Attention will remain focused on the U.S. tomorrow with the release of key Retail Sales and UoM Consumer Sentiment data. Strong U.S. consumption figures could breathe some life into the risk trade. On the other hand, since the EU and UK have been mired in uncertainty lately, strong U.S. data could have the opposite effect and send investors scurrying towards the Dollar. Therefore, it will be interesting to see how the Dollar reacts tomorrow since correlations have been a bit unreliable as of late.
Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday and 3/10 lows. As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/4 highs. Our 2nd tier downtrend line could serve as a key barrier since it runs through previous March highs, or the psychological 1.52 area. Meanwhile, the psychological 1.50 area could become a technical cushion should the Cable continue to solidify above.
Present Price: 1.5023
Resistances: 1.5024, 1.5036, 1.5054, 1.5066, 1.5076, 1.5085
Supports: 1.5003, 1.4989, 1.4980, 1.4971, 1.4959
Psychological: 1.50, March highs and lows 
USD/JPY Trades Off Wednesday’s Highs
The USD/JPY has pulled back from Wednesday’s highs and is gravitating towards the psychological 90 level as we anticipated. The USD/JPY has managed to avoid a retest in the process, a somewhat positive development. China’s economic data had a limited impact on the USD/JPY despite the rise in consumer prices and weakness in industrial production. Additionally, today’s U.S. data has also had a muted influence on the USD/JPY today. Therefore, it seems investors are more focused on the currency pair’s technical levels than global fundamental developments for the time being. However, that could change tomorrow with the release of America’s retail sales and consumer sentiment data. We’ve really seen the USD/JPY react to U.S. data lately. Considering U.S. consumption has a direct impact on Japan’s manufacturing base, we could see the USD/JPY come back to life tomorrow. Strong U.S. consumption could send the USD/JPY higher in anticipation that the Fed will tighten before the BoJ, whereas negative data releases could send the USD/JPY back towards its psychological 90 level. Therefore, investors should keep a sharp eye on tomorrow’s data wire.
Technically speaking, the USD/JPY faces our new downtrend lines along with intraday and 2/7 highs. Meanwhile, the highly psychological 90 area could have an influence over the USD/JPY’s movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/9 lows.
Present Price: 90.44
Resistances: 90.49, 90.54, 90.63, 90.69, 90.81, 90.89
Supports: 90.35, 90.29, 90.17, 90.11, 90.02, 89.95
Psychological: 90, March highs 
Gold Tests $1100/oz
Gold headed south again in reaction to the U.S. data set. However, the precious metal is bouncing after dipping just below its highly psychological $1100/oz level. We notice a rise in the risk trade across the board with the Dollar losing some ground to the Euro and Pound. Should these two currencies manage to piece together a topside run, this could help gold recover from its own pullback since the two tend to be positively correlated. However, the fact that gold weakened to the point of an $1100/oz retest is discouraging. It will be interesting to see whether the precious metal can keep above our 2nd tier uptrend line since it runs through February 25th lows, or the $1087/oz area. Gold’s pullback from March highs is a bit mysterious, and it remains to be seen whether this is just part of a longer-term uptrend pattern. Meanwhile, the psychological $1100/oz area could keep gold at bay as investors await tomorrow’ U.S. retail sales and consumer confidence data.
Technically speaking, gold faces multiple downtrend lines along with intraday and 3/1 highs. Furthermore, the psychological $1150/oz level could serve as a technical barrier should it be tested. As for the downside, gold still has multiple uptrend lines serving as technical cushions, highlighted by our 2nd tier which runs through 2/25 lows. Furthermore, gold has the psychological $1100/oz level could continue to serve as a technical cushion.
Present Price: $1106.50/oz
Resistances: $1108.32/oz, $1110.69/oz, $1112.85/oz, $1114.79/ oz, $1116.73/oz, $1118.67/oz
Supports: $1105.73/oz, $1103.58/oz, $1101.64/oz, $1099.91/oz, $1097.54/oz, $1094.96/oz
Psychological: $1100/oz, $1150/oz, March highs and Lows 
AUD/USD Weakens Following Moderate Employment Data
The Aussie has weakened from weekly highs and its psychological .92 level after Australia’s Employment Change figure printed below analyst expectations. This couples with the pullback in Housing Loans data earlier this week and reveals the RBA’s rate hikes are having their desired impact. Hence, there’s a possibility the central bank could stand pat at its next meeting. However, China’s Industrial Production did print below analyst expectations while pricing data was relatively tame despite the cautionary headlines. As a result, China may not be as aggressive in tightening as some analysts anticipated, meaning Australia could continue to enjoy healthy demand from Asia for its commodities. Meanwhile, attention will focus in on the West with the U.S. releasing key retail sales and consumer sentiment data tomorrow. Strong U.S. consumption data could favor the risk trade and help the Aussie move higher. The Aussie did peak above our 2nd tier downtrend line, which runs through 1/18 highs, or the .9275 level. Therefore, the Aussie could have a bit more topside mobility left in the tank. The Aussie also has an apparently strong support structure for the time being considering its climb this month has been somewhat gradual.
Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/9lows, and the psychological .90 area. As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with the psychological .92 area. Additionally, previous 2010 highs could serve as a hefty technical barrier should they be tested.
Price: .9135
Resistances: .9143, .9160, .9171, .9194, .9213, .9227
Supports: .9120, .9104, .9090, .9073, .9052
Psychological: .92, 2010 highs 
S&P Futures Glare at 2010 Highs
The S&P futures are staring down previous 2010 highs and the psychological 1150 level as they hold above our key 3rd tier downtrend line. As we mentioned in yesterday’s commentary, the S&P’s eclipse of our 3rd tier could prove to be a key development since it is the last downtrend line for the near-term. However, the futures are struggling with January highs, and it will be interesting to see if they can break through by the end of the week. Today’s Trade Balance data revealed a smaller than expected deficit on account of a decline in imports. Investors should consider that adverse weather conditions may have played a role in the import decline, particularly in demand for crude. Additionally, weekly Unemployment Claims registered a smaller than expected decline, though the figure isn’t too large of a deviation from estimates. Meanwhile, the Euro and Pound are beginning to establish a bit of upward momentum. Although both the EUR/USD and Cable are still capped by downward forces, a topside breakout could benefit the S&P futures since it would support stability in the EU region while backing the broad-based risk trade. Today’s Chinese data set was a bit intriguing. Industrial production cooled down and pricing data printed hotter than anticipated accompanied by a large pop in retail sales. The slowdown in industrial production could signal that China’s clamp down on new loans is having its desired effect on the economy. Although headlines are highlighting today’s rise in the CPI, we believe the data is not so strong as to warrant aggressive monetary tightening in the near-term. Additionally, the slowdown in Industrial Production could encourage the central bank to let lending flow at a normal rate. Attention will likely focus on the U.S. tomorrow with retail sales and UoM consumer confidence on the way. Should U.S. consumption improve, this could provide the jolt the S&P needs to overcome its key technical barriers.
Technically speaking, the S&P futures have broken through our 3rd tier downtrend line, a bullish signal since they run through previous 2010 highs. That being said, the only near-term technical barriers remaining are 2010 highs and the psychological $1150/oz level. As for the downside, the S&P futures have our 1st tier uptrend line serving as a technical cushion along with intraday and 3/9 lows.
Price: 1144
Resistances: 1145, 1146.5, 1148.25
Supports: 1143, 1141, 1139.25, 1137.5, 1135.75
Psychological: 2010 highs, 1150
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