Uncertainty in global equity markets and Oil prices will likely remain at the front of investor minds this week. Friday night saw European markets unable to avoid global sentiment with the DAX and FTSE100 finishing lower by 2.5% and 1.9%. US indices followed suit with the S&P and DJIA closing down 2.2% and 2.4% respectively.
Commodity prices continue to experience downward pressure. Oil hit under USD30/bbl as the market reacts to news of lifted sanctions within Iran. IAEA’s director general has confirmed that Iran has “completed the necessary preparatory steps to start the implementation of the Joint Comprehensive Plan of Action”. By curbing its ability to produce atomic weapons, Iran takes one step closer to commencing their crude oil export program. Markets reacted bearish in the wake of this report as Iran is expected to boost exports to 0.5m bbl/day, placing further downward pressure on Oil prices.
Falling oil prices have maintained their pressure on commodity backed currencies with the AUD and CAD struggling to find support. The AUD dropped to fresh 7 year lows of 0.682 while the USD/CAD has rallied higher to 1.461. Investors will be looking to data coming out of China this week to give a better indication of future market directions.
Currency Updates:
EUR/USD ST: key resistance at 1.11
Pivot: 1.11
Our preference: short positions below 1.11 with targets @ 1.045 & 1.02 in extension.
Alternative scenario: above 1.11 look for further upside with 1.1495 & 1.172 as targets.
Comment: as long as 1.11 is resistance, likely decline to 1.045. The pair stands below its strong resistance @ 1.11.
Supports and resistances:
1.172 ***
1.1495 ***
1.11 ***
1.0919 Last
1.045 ***
1.02 ***
0.985 **
USD/JPY ST: the downside prevails
Pivot: 121.5
Our preference: short positions below 121.5 with targets @ 116 & 113.85 in extension.
Alternative scenario: above 121.5 look for further upside with 123.8 & 126 as targets.
Comment: the RSI is capped by a declining trend line.
Supports and resistances:
126 **
123.8 ***
121.5 ***
117.02 Last
116 ***
113.85 ***
110 **
GBP/USD ST: the downside prevails
Pivot: 1.495
Our preference: short positions below 1.495 with targets @ 1.423 & 1.395 in extension.
Alternative scenario: above 1.495 look for further upside with 1.524 & 1.566 as targets.
Comment: a break below 1.423 would trigger a drop towards 1.395.
Supports and resistances:
1.566 ***
1.524 ***
1.495 ***
1.4271 Last
1.423 ***
1.395 ***
1.363 **
AUD/USD ST: the downside prevails
Pivot: 0.7195
Our preference: short positions below 0.7195 with targets @ 0.665 & 0.635 in extension.
Alternative scenario: above 0.7195 look for further upside with 0.739 & 0.753 as targets.
Comment: the RSI has broken down its 30 level.
Supports and resistances:
0.753 ***
0.739 ***
0.7195 ***
0.6856 Last
0.665 ***
0.635 **
0.6125 ***
SPI 200 (ASX) (H6) Intraday: key resistance at 4815
Pivot: 4815
Our preference: short positions below 4815 with targets @ 4700 & 4675 in extension.
Alternative scenario: above 4815 look for further upside with 4885 & 4945 as targets.
Comment: the index currently faces a challenging resistance area at 4815.
Supports and resistances:
4945
4885
4815
4790 Last
4700
4675
4650
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