Financial markets looked to continue yesterday’s vicious selloff and they did, until the US market opened. Up to that time, GOLD posted another high at $1200 and DAX along with other European indices reached new yearly lows. As a result of the risk aversion, JPY made another attempt to post 114.20 highs, however the selloff reversed after the US opening. Since then, GOLD retreated $11, and OIL took a plunge touching $28/bbl. USDJPY trades over 115.00 in what looks to be like a relief rally so far.
Global growth fears have traders looking for clues on the FOMC’s policy trajectory. Currently, the market is unwinding bets that the Fed would tighten rates further this year. Softer U.S economic data continues to raise speculation that the pace of future Fed rate increases would be much slower than what Ms. Yellen and company currently perceives. The Fed Chair will be key this week – she is due to testify Wednesday on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington.
US equity markets were broadly unchanged following on from tumbling Asian equities – Nikkei down 5.4%. European markets dropped around 1% continuing their weekly decline. Concerns over global growth remain at the forefront of investor minds. OIL experienced further downside off the back of the IEA increasing its OPEC supply outlook while reducing demand estimates. Revisions are supported by Iran’s production in January increasing to 2.00Mb/d.
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Currency Updates:
EUR/USD Intraday: the bias remains bullish.
Pivot: 1.1235
Our preference: long positions above 1.1235 with targets @ 1.1340 & 1.1400 in extension.
Alternative scenario: below 1.1235 look for further downside with 1.1160 & 1.1080 as targets.
Comment: technically the RSI is above its neutrality area at 50.
Supports and resistances:
1.1460 ***
1.1400 **
1.1340 ***
1.1289 Last
1.1235 ***
1.1160 **
1.1080 ***
USD/JPY Intraday: under pressure.
Pivot: 115.85
Our preference: short positions below 115.85 with targets @ 114.20 & 113.55 in extension.
Alternative scenario: above 115.85 look for further upside with 116.50 & 117.00 as targets.
Comment: as long as 115.85 is resistance, look for choppy price action with a bearish bias.
Supports and resistances:
117.00 **
116.50 **
115.85 **
115.18 Last
114.20 ***
113.55 *
113.00 *
GBP/USD Intraday: the bias remains bullish.
Pivot: 1.4435
Our preference: long positions above 1.4435 with targets @ 1.4515 & 1.4550 in extension.
Alternative scenario: below 1.4435 look for further downside with 1.4375 & 1.4325 as targets.
Comment: the RSI lacks downward momentum.
Supports and resistances:
1.4590 **
1.4550 **
1.4515 **
1.4468 Last
1.4435 ***
1.4375 **
1.4325 ***
AUD/USD Intraday: rebound.
Pivot: 0.7015
Our preference: long positions above 0.7015 with targets @ 0.7100 & 0.7130 in extension.
Alternative scenario: below 0.7015 look for further downside with 0.6970 & 0.6920 as targets.
Comment: the RSI lacks downward momentum.
Supports and resistances:
0.7170 **
0.7130 **
0.7100 ***
0.7062 Last
0.7015 *
0.6970 **
0.6920 *
SPI 200 (ASX) (H6) Intraday: the downside prevails.
Pivot: 4800
Our preference: short positions below 4800 with targets @ 4700 & 4650 in extension.
Alternative scenario: above 4800 look for further upside with 4870 & 4930 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
4930
4870
4800
4738 Last
4700
4650
4600
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