US equities posted gains overnight as the Federal Reserve released meeting minutes while oil surged. The March FOMC minutes raised concerns of some Fed members, believing a rate hike in April would indicate an inappropriate sense of urgency. Members noted global disinflationary pressures continue to pose downside risks to the inflation outlook. They believe there is currently little room for easing monetary policy in the event of weakening inflation or worsening economic conditions. Despite these concerns, Federal Members outlook for an April hike appears mixed. Some officials believe there is scope for a rate hike this month if economic data continues to support moderate growth and output expectations. Yellen however remains firm on her outlook for a slow and gradual tightening of monetary policy.
OIL surged in the US session supported by a weaker dollar and contracting inventory data. Oil continued its rally last night as EIA data recorded a draw in supplies by 4.9 million barrels versus expectations of a build of 3.1 million barrels. Brent oil rose 4.96% to $39.71/bbl while WTI pushed to $37.94/bbl off the back of the news. With Oil prices currently range bound, failure of OPEC and producers to reach a deal could provide scope for Oil to push to the $30 a barrel level. As production from major producers continues to swell, analysts believe the market may punish producers if they fail to reach widespread commitment on output limits.
Currency Updates:
EUR/USD Intraday: bullish bias above 1.1365.
Pivot: 1.1365
Our preference: long positions above 1.1365 with targets @ 1.1435 & 1.1460 in extension.
Alternative scenario: below 1.1365 look for further downside with 1.1325 & 1.1310 as targets.
Comment: technically the RSI is above its neutrality area at 50.
Supports and resistances:
1.1480 **
1.1460 ***
1.1435 ***
1.1396 Last
1.1365 ***
1.1325 ***
1.1310 **
USD/JPY Intraday: the downside prevails.
Pivot: 110.50
Our preference: short positions below 110.50 with targets @ 109.00 & 108.55 in extension.
Alternative scenario: above 110.50 look for further upside with 111.05 & 111.40 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
111.40
111.05
110.50
109.72 Last
109.00
108.55
108.15
GBP/USD Intraday: choppy.
Pivot: 1.4170
Our preference: short positions below 1.4170 with targets @ 1.4080 & 1.4005 in extension.
Alternative scenario: above 1.4170 look for further upside with 1.4245 & 1.4325 as targets.
Comment: as long as 1.4170 is resistance, expect a return to 1.4080.
Supports and resistances:
1.4325 ***
1.4245 ***
1.4170 ***
1.4127 Last
1.4080 ***
1.4005 **
1.3945 ***
AUD/USD Intraday: further advance.
Pivot: 0.7555
Our preference: long positions above 0.7555 with targets @ 0.7645 & 0.7685 in extension.
Alternative scenario: below 0.7555 look for further downside with 0.7530 & 0.7510 as targets.
Comment: the RSI is bullish and calls for further advance.
Supports and resistances:
0.7705
0.7685
0.7645
0.7601 Last
0.7555
0.7530
0.7510
SPI 200 (ASX) (M6) Intraday: capped by a negative trend line.
Pivot: 4985
Our preference: short positions below 4985 with targets @ 4870 & 4830 in extension.
Alternative scenario: above 4985 look for further upside with 5030 & 5083 as targets.
Comment: as long as 4985 is resistance, expect a return to 4870.
Supports and resistances:
5083
5030
4985
4943 Last
4870
4830
4800
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