The Australian Dollar has continued to grind lower as the market digests the Reserve Bank of Australia’s announcement yesterday. Monetary policy rates remained on hold as RBA Governor Glenn Stevens cited uncertainty remains in the outlook of the global economy. Although recent data suggests advanced economies have recorded recent improvements in growth, a number of emerging markets still face significant headwinds. Stevens jawboned the Australian dollar indicating that a continued appreciation of the dollar “could complicate the adjustment” of the Australian economy as investment in mining continues to contract. The Australian dollar has fallen from 0.7722 to its current trading level of 0.7543.
Oil prices found support over night as API data released last night drove oil higher. Inventories recorded a draw down in oil holdings of 4.3mln barrels versus market expectations of a build in inventories of 3.2mln barrels. Comments from Kuwait’s OPEC governor contributed to the rise, indicating an agreement will be reached in the Doha meetings irrespective of Iran’s involvement in negotiations. WTI gained 2.06% to $36.70/bbl while Brent rose 1.7% to $38.38/bbl off the back of these events.
Despite Kuwait’s commentary, Deputy Crown Prince Mohammad bin Salman of Saudi Arabia noted they will only commit to output commitments with Iran’s involvement. As Iran remains committed to increasing output to pre-sanction levels, this could be an attempt by the major oil producer to strong-arm negotiations.
Currency Updates:
EUR/USD Intraday: range.
Pivot: 1.1415
Our preference: short positions below 1.1415 with targets @ 1.1334 & 1.1310 in extension.
Alternative scenario: above 1.1415 look for further upside with 1.1435 & 1.1465 as targets.
Comment: as long as the resistance at 1.1415 is not surpassed, the risk of the break below 1.1334 remains high.
Supports and resistances:
1.1465 **
1.1435 ***
1.1415 ***
1.1384 Last
1.1334 ***
1.1310 ***
1.1280 **
USD/JPY Intraday: capped by a negative trend line.
Pivot: 111.05
Our preference: short positions below 111.05 with targets @ 109.50 & 109.00 in extension.
Alternative scenario: above 111.05 look for further upside with 111.40 & 111.75 as targets.
Comment: the RSI is mixed with a bearish bias.
Supports and resistances:
111.75
111.40
111.05
110.43 Last
109.50
109.00
107.70
GBP/USD Intraday: under pressure.
Pivot: 1.4245
Our preference: short positions below 1.4245 with targets @ 1.4105 & 1.4055 in extension.
Alternative scenario: above 1.4245 look for further upside with 1.4325 & 1.4375 as targets.
Comment: a break below 1.4105 would trigger a drop towards 1.4055.
Supports and resistances:
1.4375 **
1.4325 ***
1.4245 ***
1.4158 Last
1.4105 ***
1.4055 ***
1.4005 **
AUD/USD Intraday: key resistance at 0.7570.
Pivot: 0.7570
Our preference: short positions below 0.7570 with targets @ 0.7505 & 0.7475 in extension.
Alternative scenario: above 0.7570 look for further upside with 0.7605 & 0.7645 as targets.
Comment: the RSI is mixed with a bearish bias.
Supports and resistances:
0.7645
0.7605
0.7570
0.7524 Last
0.7505
0.7475
0.7440
SPI 200 (ASX) (M6) Intraday: capped by a negative trend line.
Pivot: 5000
Our preference: short positions below 5000 with targets @ 4860 & 4800 in extension.
Alternative scenario: above 5000 look for further upside with 5030 & 5083 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
5083
5030
5000
4886 Last
4860
4800
4750
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