Despite the lack of economic data today, financial markets are in turmoil. Renewed selling pressure in oil prices has hit global stocks once again. Crude oil dropped under $30 again (-2.81%) pushing equity markets into the red. Volatility in commodities combined with rumors of a major European financial institution struggling with coupon repayments drove the German DAX -3.3% lower. US indices found consolidation towards the end of the session closing down 1% to 1.5%. On the other hand, GOLD prices are soaring to 8 month highs amid this flight to “safety” since Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk. Level of caution ahead. Keep an eye on the USDJPY. The Yen has broken its 115.95 (which is the January low). This drop has potential to influence stock market sentiment and overall volatility as the pair is often a risk barometer and its fluctuation has many implications on Global stock market sentiment.
In the week ahead, investors will be looking to Wednesday’s testimony by Fed Chair Janet Yellen and Friday’s data on U.S. retail sales for further indications on the strength of the world’s largest economy. Yellen’s testimony has potential to exacerbate the current market sell-off as language perceived too hawkish or dovish can see a further tightening of financial conditions.
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Currency Updates:
EUR/USD Intraday: further advance.
Pivot: 1.1120
Our preference: long positions above 1.1120 with targets @ 1.1240 & 1.1310 in extension.
Alternative scenario: below 1.1120 look for further downside with 1.1080 & 1.1030 as targets.
Comment: the RSI is bullish and calls for further upside.
Supports and resistances:
1.1400 **
1.1310 ***
1.1240 ***
1.1196 Last
1.1120 ***
1.1080 **
1.1030 ***
USD/JPY Intraday: under pressure.
Pivot: 116.50
Our preference: short positions below 116.50 with targets @ 114.60 & 113.55 in extension.
Alternative scenario: above 116.50 look for further upside with 117.00 & 117.50 as targets.
Comment: the break below 116.50 is a negative signal that has opened a path to 114.60.
Supports and resistances:
117.50 **
117.00 *
116.50 **
115.52 Last
114.60 *
113.55 *
113.00 *
GBP/USD Intraday: under pressure.
Pivot: 1.4485
Our preference: short positions below 1.4485 with targets @ 1.4350 & 1.4280 in extension.
Alternative scenario: above 1.4485 look for further upside with 1.4550 & 1.4610 as targets.
Comment: as long as 1.4485 is resistance, likely decline to 1.4350. The pair is showing a pattern of lower highs and lows.
Supports and resistances:
1.4610 **
1.4550 **
1.4485 **
1.4425 Last
1.4350 ***
1.4280 **
1.4225 ***
AUD/USD Intraday: the downside prevails.
Pivot: 0.7150
Our preference: short positions below 0.7150 with targets @ 0.7040 & 0.7000 in extension.
Alternative scenario: above 0.7150 look for further upside with 0.7210 & 0.7245 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
0.7245 **
0.7210 **
0.7150 ***
0.7076 Last
0.7040 *
0.7000 **
0.6960 *
SPI 200 (ASX) (H6) Intraday: the downside prevails.
Pivot: 4870
Our preference: short positions below 4870 with targets @ 4790 & 4775 in extension.
Alternative scenario: above 4870 look for further upside with 4933 & 4950 as targets.
Comment: as long as 4870 is resistance, look for choppy price action with a bearish bias.
Supports and resistances:
4950
4933
4870
4832 Last
4790
4775
4720
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