Daily Outlook

April 1, 2016

All eyes are on the US employment data to be released tonight, which will provide further guidance on the economic condition in the US. The downside pressure on the USD continues after FED’s Yellen speech on Wednesday. With her talk suggesting rates to remain low for an extended period of time, even a strong NFP tonight might not be enough to bring back the confidence to USD buyers. Furthermore, FED’s Evans called for continued caution due to low inflation yesterday, which drags more attention to tonight’s data release.

Indicative is the fact that USD is the worst performing currency in the month of March. In the contrary, Euro, Aussie and Kiwi all gained for the fourth consecutive day breaking above March highs, rallied up to 1.1410, 0.7722 and 0.9694 respectively. Cable traded high and reached 1.4456, but the rally stalled on renewed Brexit fears and the market’s efforts to search for direction after some larger volatilities.

Financial markets have appreciated the dovish stance of Yellen and as a result stock markets have enjoyed 2 days of solid rallies. Due to the rise in stock market, gold has moved inversely to them, dropping from the $1255 high recorded after Yellen’s Speech. Gold is underpressure since investments funds and traders are moving money into equities and away from “safer” investments. OIL as well has suffered losses since last week from $41.81/bbl high to $37.77/bbl yesterday. However, a further weakening in greenback assisted it to recover from the loss a bit overnight and the price of OIL at the time of writing is at $38.29/bbl.

Today we have the first set of PMI data coming from China during Asian session, which will draw on traders’ attention ahead of the monthly employment report out of the US tonight.

To help you maximize your potential profits EUR/USD spreads on the easyMarkets Platform will be reduced to 1.6 pips and Gold spreads will be reduced to 40 pips from 1100-1400GMT.

Currency Updates:

EUR/USD Intraday: the upside prevails

Pivot: 1.1310

Our preference: long positions above 1.1310 with targets @ 1.1410 & 1.1450 in extension.

Alternative scenario: below 1.1310 look for further downside with 1.1280 & 1.1255 as targets.

Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Supports and resistances:
1.1495 **
1.1450 ***
1.1410 **
1.1378 Last
1.1310 ***
1.1280 ***
1.1255 **

USD/JPY Intraday: key resistance at 112.85

Pivot: 112.85

Our preference: short positions below 112.85 with targets @ 112.05 & 111.60 in extension.

Alternative scenario: above 112.85 look for further upside with 113.20 & 113.45 as targets.

Comment: as long as 112.85 is resistance, look for choppy price action with a bearish bias.

Supports and resistances:
113.45
113.20
112.85
112.55 Last
112.05
111.60
111.20

GBP/USD Intraday: the bias remains bullish

Pivot: 1.4325

Our preference: long positions above 1.4325 with targets @ 1.4425 & 1.4455 in extension.

Alternative scenario: below 1.4325 look for further downside with 1.4260 & 1.4225 as targets.

Comment: a support base at 1.4325 has formed and has allowed for a temporary stabilisation.

Supports and resistances:
1.4515 ***
1.4455 ***
1.4425 ***
1.4365 Last
1.4325 ***
1.4260 ***
1.4225 ***

AUD/USD Intraday: bullish bias above 0.7630

Pivot: 0.7630

Our preference: long positions above 0.7630 with targets @ 0.7705 & 0.7745 in extension.

Alternative scenario: below 0.7630 look for further downside with 0.7565 & 0.7515 as targets.

Comment: a support base at 0.7630 has formed and has allowed for a temporary stabilisation.

Supports and resistances:
0.7790
0.7745
0.7705
0.7666 Last
0.7630
0.7565
0.7515

SPI 200‏ (ASX)‏ (M6) Intraday: caution

Pivot: 5030

Our preference: long positions above 5030 with targets @ 5100 & 5145 in extension.

Alternative scenario: below 5030 look for further downside with 4990 & 4960 as targets.

Comment: the RSI is mixed and calls for caution.

Supports and resistances:
5185
5145
5100
5051 Last
5030
4990
4960

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