As expected, European Central Bank kept all its monetary policy unchanged which pushed EURUSD to this week’s high at 1.1397 before reversing all the gain. During the press conference, Draghi left the door open to further easing citing near-record-low inflation expectations. This is despite the recent higher oil price given the correlation between oil and inflation. He’s comfortable to see rates at present or lower levels for extended time. Furthermore, US unemployment claims of 247k beats expectation and hits 42 years low, indicating solid labour market. With further improvement in US data, more questions will be asked of how data dependent the Fed truly is.
Silver hits new peak in 2016 to $17.67 and Gold jumped to April high by $10 to $1270. The rally in precious metal started as China started their Gold Yuan fix and supported by negative interest rate policy environment which drive investors into alternative assets. However, USD strength returned to the market overnight and gold and silver dived dramatically dropping by 1.8% and 5% respectively; the biggest drop for silver in 2016. Silver has been recovering after years of losses and has risen by 11% this month. The USD weakness for the past few weeks and bounce in other commodities market (OIL, Iron Ore) have helped the rise.
Currency Updates:
EUR/USD Intraday: key resistance at 1.1345.
Pivot: 1.1345
Our preference: short positions below 1.1345 with targets @ 1.1270 & 1.1245 in extension.
Alternative scenario: above 1.1345 look for further upside with 1.1390 & 1.1430 as targets.
Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Supports and resistances:
1.1430 ***
1.1390 ***
1.1345 ***
1.1297 Last
1.1270 ***
1.1245 ***
1.1220 ***
AUD/USD Intraday: watch 0.7730
Pivot: 0.7795
Our preference: short positions below 0.7795 with targets @ 0.7730 & 0.7675 in extension.
Alternative scenario: above 0.7795 look for further upside with 0.7830 & 0.7860 as targets.
Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Supports and resistances:
0.7860
0.7830
0.7795
0.7764 Last
0.7730
0.7675
0.7630
Gold spot Intraday: turning down
Pivot: 1258.00
Our preference: short positions below 1258.00 with targets @ 1242.00 & 1235.50 in extension.
Alternative scenario: above 1258.00 look for further upside with 1270.50 & 1281.00 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
1281.00
1270.50
1258.00
1248.64 Last
1242.00
1235.50
1227.50
Silver spot Intraday: turning down.
Pivot: 17.6600
Our preference: short positions below 17.6600 with targets @ 16.7100 & 16.4800 in extension.
Alternative scenario: above 17.6600 look for further upside with 18.0000 & 18.5000 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
18.5000
18.0000
17.6600
17.0200 Last
16.7100
16.4800
16.1000
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