The Australian dollar has weakened significantly this month, sliding from its 2016 high of 0.77220 to a new week low of 0.74935, having since retraced to the 0.7528 level. Weakness in the dollar may be attributed to risk-off sentiment driving capital flows to safe haven currencies such as the Japanese Yen amid concerns of global growth and renewed oil price volatility. Commentary from IMF’s Christine Lagarde earlier in the week warned of the current fragility of the global economies recovery post GFC. Lagarde believes risks continue to mount, urging policymakers to increase structural reform, fiscal support and accommodative monetary policy.
Janet Yellen and previous Federal Reserve heads Ben Bernanke, Alan Greenspan and Paul Volcker joined a panel discussion on the US economy this morning. Federal Reserve Chiefs remain positive on the outlook of the US economy while Yellen reiterated the importance of monitoring international developments when considering adjustments to Fed policy. With significant improvements in the labor market and Us economy recovery gaining momentum, there is evidence of improving inflation. Yellen’s commentary doesn’t appear to be hawkish however seems to be less dovish than in previous weeks.
Oil continues to experience significant volatility ahead of the 17th April meeting in Doha. Oil this week rallied off the back of a draw in inventories data as well as commentary from a Kuwaiti Oil official. As the market attempts to pick the bottom of Oil prices, commentary from major oil producers as well as inventory reports will accentuate price action. WTI and Brent are currently trading at $37.66/bbl and $39.67/bbl up 1.05% and 0.61% respectively from session lows.
Currency Updates:
Trade EUR/USD Intraday: under pressure.
Pivot: 1.1405
Our preference: short positions below 1.1405 with targets @ 1.1325 & 1.1300 in extension.
Alternative scenario: above 1.1405 look for further upside with 1.1430 & 1.1455 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
1.1455 **
1.1430 **
1.1405 ***
1.1373 Last
1.1325 ***
1.1300 ***
1.1285 **
Trade USD/JPY Intraday: under pressure.
Pivot: 109.30
Our preference: short positions below 109.30 with targets @ 107.70 & 107.00 in extension.
Alternative scenario: above 109.30 look for further upside with 109.95 & 110.50 as targets.
Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Supports and resistances:
110.50
109.95
109.30
108.34 Last
107.70
107.00
106.15
Trade GBP/USD Intraday: the downside prevails.
Pivot: 1.4115
Our preference: short positions below 1.4115 with targets @ 1.4005 & 1.3945 in extension.
Alternative scenario: above 1.4115 look for further upside with 1.4170 & 1.4245 as targets.
Comment: the RSI lacks upward momentum.
Supports and resistances:
1.4245 ***
1.4170 ***
1.4115 ***
1.4055 Last
1.4005 ***
1.3945 **
1.3900 ***
Trade AUD/USD Intraday: watch 0.7490.
Pivot: 0.7550
Our preference: short positions below 0.7550 with targets @ 0.7490 & 0.7455 in extension.
Alternative scenario: above 0.7550 look for further upside with 0.7590 & 0.7635 as targets.
Comment: a break below 0.7490 would trigger a drop towards 0.7455.
Supports and resistances:
0.7635
0.7590
0.7550
0.7510 Last
0.7490
0.7455
0.7420
Trade SPI 200 (ASX) (M6) Intraday: capped by a negative trend line.
Pivot: 4960
Our preference: short positions below 4960 with targets @ 4830 & 4800 in extension.
Alternative scenario: above 4960 look for further upside with 5030 & 5083 as targets.
Comment: as long as 4960 is resistance, likely decline to 4830.
Supports and resistances:
5083
5030
4960
4888 Last
4830
4800
4760
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