Commodities weakness across the board with WTI Oil -4.35%, Copper -3% and precious metals down almost 2%; as traders doubt whether the rally is sustainable. China’s latest trade balance data shows a further deterioration in exports of -25.4% year to year and imports -13.8%. As China is the world’s manufacturing hub, export data is a worrying indication of the state of the global economy.
The Australian dollar is consolidating above 0.74, a decent feat given commodities pullback. The AUD is finding favour from the fact that domestic economic data has been better than expected and demand for yield in a negative interest rate environment.
European Central Bank will meet on Thursday to determine their next step on monetary policy. High market expectation of further easing versus how much Mario Draghi will deliver on his promises is the focus question. The market reaction will be key to determine sentiment over how exhausted central banks’ policy truly is after concerning response to Bank of Japan’s negative interest rate policy.
Currency Updates:
EUR/USD Intraday: further upside.
Pivot: 1.0975
Our preference: long positions above 1.0975 with targets @ 1.1070 & 1.1100 in extension.
Alternative scenario: below 1.0975 look for further downside with 1.0945 & 1.0925 as targets.
Comment: the RSI is mixed to bullish.
Supports and resistances:
1.1135 ***
1.1100 ***
1.1070 ***
1.1018 Last
1.0975 ***
1.0945 **
1.0925 **
USD/JPY Intraday: under pressure.
Pivot: 113.25
Our preference: short positions below 113.25 with targets @ 112.10 & 111.85 in extension.
Alternative scenario: above 113.25 look for further upside with 113.50 & 113.80 as targets.
Comment: the RSI is mixed to bearish. The pair has validated a continuation triangle pattern.
Supports and resistances:
113.80
113.50
113.25
112.56 Last
112.10
111.85
111.60
GBP/USD Intraday: caution.
Pivot: 1.4275
Our preference: short positions below 1.4275 with targets @ 1.4130 & 1.4020 in extension.
Alternative scenario: above 1.4275 look for further upside with 1.4335 & 1.4405 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
1.4405 ***
1.4335 **
1.4275 ***
1.4222 Last
1.4130 ***
1.4020 ***
1.3910 ***
AUD/USD Intraday: bullish bias above 0.7413.
Pivot: 0.7413
Our preference: long positions above 0.7413 with targets @ 0.7485 & 0.7530 in extension.
Alternative scenario: below 0.7413 look for further downside with 0.7385 & 0.7345 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Supports and resistances:
0.7560
0.7530
0.7485
0.7461 Last
0.7413
0.7385
0.7345
SPI 200 (ASX) (H6) Intraday: consolidation.
Pivot: 5173
Our preference: short positions below 5173 with targets @ 5075 & 5040 in extension.
Alternative scenario: above 5173 look for further upside with 5200 & 5225 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
5225
5200
5173
5096 Last
5075
5040
5005
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