All eyes remained on Yellen’s testimony overnight. In her prepared remarks for the testimony before House Financial Services Committee, Yellen reiterated that the Fed expects economic conditions to warrant gradual rate hikes. Factors opposing a March rate hike were identified as low inflation, financial market volatility and divergent views among FOMC members. With limited time before the March meeting, Yellen acknowledges that further market turmoil could delay future rate hikes.
European equities closed higher on Wednesday, following a rally in bank stocks. The DAX closed 1.55% higher while the FTSE closed up 0.71%, amid news of Germany’s Deutsche Bank considering debt buybacks to calm market concerns. US stocks momentum faltered towards close as early gains were hit with OIL price declines and Yellen’s remarks. The DJIA and S&P500 closed down 0.6% 0.02% respectively.
Gold has taken a small break from its rally but the upward remains intact and while it holds above the support at $1183 a retesting of $1200 can’t be ruled out. Since the big push higher on 4 February oil has been driving lower and while WTI is under $30 and Brent crude is sub-$32 their outlooks will be bearish.
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Currency Updates:
EUR/USD Intraday: consolidation.
Pivot: 1.1340
Our preference: short positions below 1.1340 with targets @ 1.1220 & 1.1160 in extension.
Alternative scenario: above 1.1340 look for further upside with 1.1400 & 1.1460 as targets.
Comment: as long as 1.1340 is resistance, expect a return to 1.1220.
Supports and resistances:
1.1460 ***
1.1400 **
1.1340 ***
1.1277 Last
1.1220 ***
1.1160 ***
1.1080 **
USD/JPY Intraday: the downside prevails.
Pivot: 115.25
Our preference: short positions below 115.25 with targets @ 113.00 & 112.00 in extension.
Alternative scenario: above 115.25 look for further upside with 115.85 & 116.50 as targets.
Comment: a break below 113.00 would trigger a drop towards 112.00.
Supports and resistances:
116.50 **
115.85 **
115.25 **
113.44 Last
113.00 ***
112.00 *
111.00 *
GBP/USD Intraday: the upside prevails.
Pivot: 1.4435
Our preference: long positions above 1.4435 with targets @ 1.4570 & 1.4615 in extension.
Alternative scenario: below 1.4435 look for further downside with 1.4375 & 1.4325 as targets.
Comment: the RSI is bullish and calls for further upside.
Supports and resistances:
1.4650 **
1.4615 **
1.4570 **
1.4531 Last
1.4435 ***
1.4375 ***
1.4325 **
AUD/USD Intraday: the upside prevails.
Pivot: 0.7065
Our preference: long positions above 0.7065 with targets @ 0.7130 & 0.7170 in extension.
Alternative scenario: below 0.7065 look for further downside with 0.7015 & 0.6970 as targets.
Comment: the RSI lacks downward momentum.
Supports and resistances:
0.7200 **
0.7170 **
0.7130 ***
0.7103 Last
0.7065 **
0.7015 *
0.6970 ***
SPI 200 (ASX) (H6) Intraday: the downside prevails.
Pivot: 4800
Our preference: short @ 4719 with targets @ 4640 & 4600 in extension.
Alternative scenario: above 4800 look for further upside with 4870 & 4930 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
4930
4870
4800
4760 Last
4640
4600
4550
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