CRUDE OIL - The commodity took back its Wednesday losses to close higher on Thursday. On the downside, support resides at the 51.00 level where a break will expose the 50.00 level. A cut through here will set the stage for a run at the 49.00 level. Further down, support resides at the 48.00 level. On the upside, resistance resides at the 52.00 level. Further out, resistance comes in at the 53.00 level. A break above here will aim at the 54.00 level and then the 55.00 level followed by the 56.00 level. Its daily RSI is bullish and pointing higher suggesting further strength. All in all, CRUDE OIL remains biased to the upside short term.
Seeing as though price is right smack bang in the middle of the daily range, the direction on which to trade this pattern isn't clear. Do you view it as a continuation pattern because price has rallied off support and this is merely a pause before a further push higher, or do you take the view that it is simply a turn as we get closer to the top of the range?
S&P500 is making an intra-day rally from around the 2340 mark, where support may have been found for a flat correction. Ideally we will now see a five wave movement to the upside follow and hopefully a breach above the 2378 level
US President Trump and Chinese president Xi Jinping, are scheduled to meet today at Trump's Mar-a-Lago resort in Florida. This is the first meeting between the leaders of the two biggest economies in the world so markets will be looking for any comments made between these 2 world leaders. Be aware that the political event and the news that associate with impacts on the US economy, will likely cause volatility for USD and gold prices.
Dow continues to trade within 20450/20700 congestion, where the index is holding for nearly two weeks, after pullback from new all-time high at 21160 stalled. Choppy trading, seen in past few days, is without clear direction, however daily indicators are heading south; MACD is in negative territory and bearish momentum building up that keep bearish alignment of the daily picture.
Gold is getting stronger. The momentum seems back to bullish despite some consolidation. Resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low). In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).
EUR/CHF's is trading around 1.0700. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Expected to see further decline. In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).
EUR/USD is now consolidating. The pair is heading lower since the pair failed to hold above former resistance given at 1.0874 (08/12/2017 high). Hourly support can be found at 1.0630 (intraday low). Stronger support can be found at 1.0494 (22/02/2017 low). Expected to see further short-term weakness.
DAX remains at the back foot and opened lower on Thursday after previous day's strong fall. Extension of pullback from fresh record high at 12410 (posted on 03 Apr) hit the mid-point of 11878/12410 upleg and sees risk of deeper pullback on cracking converged daily Tenkan-sen/ Kijun-sen lines (12176/12144) respectively.
EURUSD made a sharp drop in the past couple of hours, which could potentially be blue wave v, as part of an impulse. That said, wave v may find some support in the next few sessions and ideally make a three wave reversal into a-b-c. Regarding the fact, that we are looking at a wave 2 correction on higher degree time frames, the following three wave correction can potentially make a rally towards the 1.0767/1.0739 region, before again looking down.
Given the lacklustre pace of recovery of the US economy, most participants expected the Fed to stick to its initial plan: gradual rate tightening. Instead, the minutes of the March FOMC meeting revealed that the members discussed extensively the strategy to start unloading the $4.5 trillion of bonds and mortgage-backed securities that currently sit on its balance. Technically, the Fed did not actually discuss selling those assets but rather changing the committee’s reinvestment policy later this year. Indeed, the central bank is currently reinvesting all principal payments from its Treasury, agency debt and agency MBS portfolios, which has the effect to maintain unchanged the size of its portfolio.
FTSE broke into daily cloud in extension of Wednesday's strong fall (the biggest one-day loss since 21 Mar). Fresh weakness on strengthening pound neutralized hopes of stronger upside action, signaled by Diamond bottom pattern that usually signals reversal. Instead, the price penetrated daily cloud top which underpinned the rally since mid-Dec 2016, and re-focus key support at 7179 (27 Mar correction low / bottom of near-term 7179/7315 congestion, also near Fibo 61.8% of 7024/7444 upleg).
Even though the ADP data surprised to the upside yesterday, the FOMC Minutes weighed on the US Dollar, allowing the Pound to erase most of Tuesday's losses. Another positive development is expected today, with the Cable reclaiming the 1.25 major level. However, there are doubts the exchange rate will be able to stabilise above the 1.2516 mark, namely the weekly PP, as there are no solid market drivers present today. On the other hand, the Buck has a tendency of strengthening the day ahead of the NFP data; therefore, a slide back towards the support cluster circa 1.2425 is not out of the question.
On Thursday morning the common European currency traded against the US Dollar below the resistance cluster, which it faced previously. The currency exchange rate has been trading in the same range since April 2, as it is squeezed in between the resistance put up by the 55-day SMA at 1.0674, together with the monthly PP at 1.0685, and the support of the 23.60% Fibonacci retracement level, which is located at the 1.0639 level. The pair is set to continue the fluctuations between the two mentioned levels until a fundamental event sets the pairs future course.
The USD/JPY currency pair weakened for the fourth time in a row yesterday, unable to maintain trade in the green zone. According to technical studies, another leg down should take place, however, that might not be the case. The weekly S1 is providing immediate support at 110.27, while the 110.50 level is providing additional psychological support, which altogether could help the Greenback to post a mild recovery. Nevertheless, gains are unlikely to exceed 50 pips, as the weekly PP represents the upper border at 111.23. The pair is expected to remain within this trading range, namely between the weekly S1 and PP.
During the early hours of Thursday's trading session the yellow metal's price made another attempt to break higher. However, after a successful passing of the 200-day SMA the commodity price did not manage to reach the weekly R1, which is located at the 1,259.70 level. After the attempt the metal's price began a decline back below the mentioned levels of significance. It is likely that the bullion will retreat down to the support levels, which are located near the 1,250 mark. There it is most likely going to find support, as it did the same exact thing on Wednesday.
The Aussie resumed lower after brief consolidation on Wednesday and is probing below 200SMA pivot at 0.7549 which held the action of past two days. The pair currently riding on the wave C (from 0.7677) of five-wave cycle from 0.7747 peak that reached its 100% Fibonacci expansion at 0.7530 today.
As shown on Live Trading Session yesterday, the USD/JPY fell as expected due by overnight sell off in equities. Equities dropped due to de-risking ahead of Trump-Xi meeting, so we might see another bearish rejection on retracement. The POC 110.80-95 ( D H3, EMA89, ATR Pivot, trend line) could reject the price towards 110.18. Break below it should target 109.77 - the strongest daily support.
The pair remains under strong pressure and eyes 110.00 support zone, after Wednesday's recovery attempts were capped by weekly cloud top (111.36) and subsequent strong bearish acceleration turned near-term focus lower again.
The EURUSD had another indecisive movement yesterday. The bias remains neutral in nearest term. Price has been moving sideways between 1.0635 – 1.0700 range area as you can see on my H1 chart below suggests a consolidation phase. That said, price is still in a bearish short-term trend after formed a 'shooting star' formation on daily chart last week and broke below the trend line support as you can see on my H1 chart below, targeting 1.0600 region. Immediate resistance is seen around 1.0700. A clear break above that area could trigger further bullish pressure but only a clear break and daily close above 1.0750 would end the current bearish short-term bias. Fundamental focus will be on the US NFP on Friday. Overall I remain neutral.
Cable is holding on the front foot in early Thursday's trading, following strong bounce from 100 SMA support (1.2414), driven by upbeat UK data on Wednesday. The price emerged above daily cloud but remains capped by daily Tenkan-sen (1.2494) for now. Daily cloud is narrowing and will twist next week that may drag sterling lower again. Studies on daily chart remain bullishly aligned and favor further upside, which needs sustained break above Tenkan-sen barrier. Also, thick hourly cloud (1.2484/1.2440) continues to underpin (near-term action is holding around cloud top) This scenario requires top of narrowing daily cloud (currently at 1.2457) to keep the downside protected. Conversely, extended weakness below hourly cloud would generate bearish signal and risk retest of 100 SMA pivot.
The Euro remains directionless for the fifth day, ranging between 100SMA (1.0622) and daily Kijun-sen (1.0700) in consolidation phase of recent strong fall from 1.0905 (27 Mar high). Overall bearish bias keeps selling upticks strategy in play on existing risk of renewed attempts below 100 SMA and thinning daily cloud (currently spanned between 1.0611 and 1.0583) for resumption of near-term downtrend from 1.0905. On the other side, repeated failures to close below important support at 1.0650 (Fibo 61.8% of 1.0493/1.0905 ascend) require caution on continued signals of downtrend's stall and basing attempts. Stronger reversal signals could be expected on firm break above 1.0700 that should sideline bearish strategies and look for further bullish signals on extension above next pivots at 1.0737 (Fibo 38.2% of 1.0905/1.0633 fall) and 1.0769 (daily Tenkan-sen) in extension.
The GBP/USD is building a contracting triangle chart pattern (red/blue lines). A break above resistance (red) could see price complete wave E (green). A break below support (blue) could see price challenge the 61.8% Fibonacci level of wave X vs W (blue).
EUR/USD is approaching trendline resistance and a break above would confirm the double bottom pattern at 1.0630. However, the currency pair could struggle to rally, since solid resistance lies at 1.0720 and 1.0750.
Short term Elliott Wave view in EURJPY suggests that cycle from 3/12 peak (122.89) is unfolding as a double three Elliott wave structure where Minor wave W ended at 119.28 and Minor wave X ended at 120.45. Minor wave Y is in progress and the internal is unfolding also as a double three Elliott wave structure where Minute wave ((w)) ended at 117.38 and Minute wave ((x)) bounce is proposed complete at 118.78. Down from 118.78, if pair can see 1 more minor low, the decline can be defined as 5 waves impulse and the 5 waves move should complete Subminutte wave a, then it should bounce in Subminutte wave b to correct the cycle from 118.78 high before pair turns lower again. We don’t like buying the proposed bounce and expect sellers to appear once Subminutte wave b is complete in 3, 7, or 11 swing provided that pivot at 4/5 high (118.78) stays intact in the first degree.
A re-surge in market's confidence on the US economy, following the release of a much better-than-expected ADP survey, pushed the greenback higher across the board, although majors held within familiar ranges. The EUR/USD pair fell down to 1.0634 and closed the day a couple of pips above it, with the common currency weighed by slightly worse-than-expected Markit Services PMIs for the EU. Despite growth in the sector for the whole region was confirmed near six-year highs, initial estimates for March were revised lower, with the index printing 56.0, down from the flash reading of 56.5. The composite PMI for the EU, ended up at 56.4 from 56.7.
The Fed minutes didn't have any impact in the markets as Dollar continues its rest mode. The Indian markets may move after the RBI meet conclusion today, though no change in rates is expected. Need to see what the central bank says about liquidity and inflation outlook.
We turn our attention back to the majors today with another look at GBP/USD. The majors haven't been doing a whole lot for a while now, highlighted by the Cable charts in this post, clearly stuck in higher time frame ranges.
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