Daily Outlook

February 19, 2016

EURUSD lost altitude overnight and posted 2 week lows after ECB minutes revealed possible easing measures in March. EURUSD touched a low of 1.1076, retracing to the 1.110 level. On the other hand, GBPUSD approached 1.44 levels as market hopes for a deal between the EU Council and Cameron so as to avoid a possible exit of Britain from the EU.

Oil gains from supply freeze negotiations earlier this week are retracing after the EIA reported inventories rose 2.1 million barrels, continuing supply glut concerns. This comes amid comments from the Saudi Foreign Minister Adel Al Jubeir stating “..Saudi Arabia is not prepared to cut production”. Analysts are expecting further downside until commitment is seen from OPEC and non-OPEC members.

Despite the recent risk-on sentiment, GOLD is up $23 to 1231 with the largest gain in a week. Prices of the yellow metal soared to a one-year high of $1,263.90 last Thursday, boosted by a flight to safety. Gold is up nearly 14% so far this year amid indications global economic and financial headwinds could make it tough for the Federal Reserve to raise interest rates as much as it would like this year.
US equity markets struggled to post a fourth straight day of gains. The S&P500 closed down 0.47% while the NASDAQ took a 1.13% hit. European equity performance was mixed overnight with the DAX up 0.92% driven by strong profit reports, while the FTSE closed 0.97% in the red.

Focus now shifts to US CPI to be released tomorrow.

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Currency Updates:

EUR/USD Intraday: the downside prevails.

Pivot: 1.1145

Our preference: short positions below 1.1145 with targets @ 1.1070 & 1.1040 in extension.

Alternative scenario: above 1.1145 look for further upside with 1.1185 & 1.1210 as targets.

Comment: as long as the resistance at 1.1145 is not surpassed, the risk of the break below 1.1070 remains high.

Supports and resistances:
1.1210 ***
1.1185 ***
1.1145 ***
1.1112 Last
1.1070 **
1.1040 **
1.0990 ***

USD/JPY Intraday: the downside prevails.

Pivot: 114.00

Our preference: short positions below 114.00 with targets @ 113.00 & 112.35 in extension.

Alternative scenario: above 114.00 look for further upside with 114.50 & 114.90 as targets.

Comment: a support base at 114.00 has formed and has allowed for a temporary stabilisation.

Supports and resistances:
114.90
114.50
114.00
113.44 Last
113.00
112.35
111.65

GBP/USD Intraday: the bias remains bullish.

Pivot: 1.4270

Our preference: long positions above 1.4270 with targets @ 1.4400 & 1.4465 in extension.

Alternative scenario: below 1.4270 look for further downside with 1.4240 & 1.4205 as targets.

Comment: the RSI lacks downward momentum.

Supports and resistances:
1.4515 ***
1.4465 **
1.4400 ***
1.4331 Last
1.4270 **
1.4240 ***
1.4205 **

AUD/USD Intraday: the bias remains bullish.

Pivot: 0.7130

Our preference: long positions above 0.7130 with targets @ 0.7190 & 0.7210 in extension.

Alternative scenario: below 0.7130 look for further downside with 0.7105 & 0.7080 as targets.

Comment: a support base at 0.7130 has formed and has allowed for a temporary stabilisation.

Supports and resistances:
0.7240
0.7210
0.7190
0.7151 Last
0.7130
0.7105
0.7080

SPI 200‏ (ASX)‏ (H6) Intraday: supported by a rising trend line.

Pivot: 4900

Our preference: long positions above 4900 with targets @ 4980 & 5000 in extension.

Alternative scenario: below 4900 look for further downside with 4820 & 4770 as targets.

Comment: the RSI lacks downward momentum.

Supports and resistances:
5023
5000
4980
4937 Last
4900
4820
4770

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