European equity markets took a tumbled overnight driven by weakness in banks and commodities. The DAX and FTSE closed 2.64% and 1.60% in the red with banks leading the charge. Bank performance has suffered as of late due to persistently low interest rates. US equities found consolidation in the later hours of trading as OIL prices retraced. The DJIA and S&P500 gained 0.32% and 0.44% respectively despite weak data out of the US. The Markit Services PMI recorded a contraction in the services sector while new home sales fell by 9.2% m/m.
Oil volatility remained high throughout the session with traders digesting EIA data recording a 3.5 million barrel climb in crude-oil supplies for the week relative to the APIs figure of 7.1 million- barrels. Oil prices declined yesterday based on high API figures and negative comments from SA and Iran regarding output cooperative measures. Prices experienced retracement overnight as U.S crude output falls and gasoline demand climbs. WTI is currently sitting around $32/bbl while Brent sits around $34.40/bbl.
Gold managed an increase of 1.3% as demand for the safe-haven asset increased despite improving market sentiment and profit-taking.
Sentiment remains downbeat as oil volatility continues amid global growth concerns and Britain’s potential exit from the EU. The GBP/USD broke below 1.40 finding its level as concerns over Britain leaving the EU drove the GBPUSD to fresh 7 year lows. USD/JPY broke below 111 testing lows as BoJ continues its debates regarding market intervention. Something big is looking to be in the works in terms of moves. Whether it is GBP, JPY or GOLD, the price action indicates panic.
Currency Updates:
EUR/USD Intraday: key resistance at 1.1040.
Pivot: 1.1040
Our preference: short positions below 1.1040 with targets @ 1.0955 & 1.0935 in extension.
Alternative scenario: above 1.1040 look for further upside with 1.1065 & 1.1100 as targets.
Comment: the upward potential is likely to be limited by the resistance at 1.1040.
Supports and resistances:
1.1100 ***
1.1065 ***
1.1040 ***
1.1016 Last
1.0955 ***
1.0935 ***
1.0900 ***
USD/JPY Intraday: key resistance at 112.25.
Pivot: 112.25
Our preference: short positions below 112.25 with targets @ 111.60 & 111.00 in extension.
Alternative scenario: above 112.25 look for further upside with 112.70 & 113.35 as targets.
Comment: the upward potential is likely to be limited by the resistance at 112.25.
Supports and resistances:
113.35
112.70
112.25
111.96 Last
111.60
111.00
110.50
GBP/USD Intraday: the downside prevails.
Pivot: 1.4050
Our preference: short positions below 1.4050 with targets @ 1.3875 & 1.3820 in extension.
Alternative scenario: above 1.4050 look for further upside with 1.4170 & 1.4250 as targets.
Comment: a break below 1.3875 would trigger a drop towards 1.3820.
Supports and resistances:
1.4250 ***
1.4170 **
1.4050 ***
1.3925 Last
1.3875 ***
1.3820 **
1.3750 **
AUD/USD Intraday: under pressure.
Pivot: 0.7220
Our preference: short positions below 0.7220 with targets @ 0.7165 & 0.7140 in extension.
Alternative scenario: above 0.7220 look for further upside with 0.7255 & 0.7275 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
0.7275
0.7255
0.7220
0.7187 Last
0.7165
0.7140
0.7095
SPI 200 (ASX) (H6) Intraday: the downside prevails.
Pivot: 4895
Our preference: short positions below 4895 with targets @ 4775 & 4730 in extension.
Alternative scenario: above 4895 look for further upside with 4970 & 5010 as targets.
Comment: the RSI is mixed with a bearish bias.
Supports and resistances:
5010
4970
4895
4833 Last
4775
4730
4690
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