A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

Weekly gain/loss: + 49 pips

Weekly closing price: 1.0670

The EUR/USD market enjoyed another relatively successful week, increasing its value by a further 50pips into the closing bell. As you can see, the weekly support area at 1.0333-1.0502 and nearby 2017 yearly opening level at 1.0515 has so far held firm. Assuming that the bulls remain in the driving seat here, the next pit stop can be seen around a weekly resistance level at 1.0819, followed closely by the 2016 yearly opening level at 1.0873.

The story on the daily chart, however, shows that price is currently seen trading within the walls of a daily supply zone coming in at 1.0714-1.0640. This area has already capped upside once back on the 16th Feb and again on the 6th Mar, so there's a chance we may see history repeat itself here. In the event that this area is taken out, as the weekly timeframe suggests, traders' crosshairs will likely be planted on the above noted weekly resistance level.

The after-effects of Friday's US employment report saw the EUR advance against its US counterpart, and end the day tapping a high of 1.0699.The US economy created 235k jobs in Feb, coming in above estimates at 196k. The unemployment rate came in as expected at 4.7% and hourly earnings came in slightly lower than expected at 0.2%.

Our suggestions: Besides taking out the H4 trendline resistance etched from the high 1.0679, Friday's advance also happened to form a D-leg to a H4 Harmonic AB=CD bearish formation (black arrows), with the 127.2% H4 Fib ext. pegged at 1.0678. On top of this, we also have the following structures in view: a nearby psychological level at 1.07, a H4 61.8% Fib retracement taken from the high 1.0828, a H4 bearish selling wick printed into the close and let's not forget that all of this is positioned within the aforementioned daily supply zone! Based on this H4 and daily confluence, a selloff could very well be seen today. How much of a selloff, nonetheless, is difficult to judge as let's be mindful to the fact that the weekly candles do show room to gravitate higher this week.

With everything taken into consideration, our desk has come to a general consensus that a sell trade on the break of the current H4 bearish (selling wick) candle is valid, targeting the nearby H4 trendline support taken from the high 1.0679 as an initial take-profit target. The safest position for stops, in our opinion, would be above the top edge of the daily supply zone coming in at 1.0714.

Data points to consider: ECB President Draghi speaks at 1.30pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Sell on the break of the current H4 bearish selling wick (stop loss: 1.0716).

GBP/USD

Weekly gain/loss: – 130 pips

Weekly closing price: 1.2163

Over the last week, we can see that the weekly bears breached and eventually closed beyond the weekly Quasimodo support at 1.22 (now a potential resistance). On the condition that the pair remains bearish beyond this hurdle, then the next port of call on this scale can be seen around weekly support coming in at 1.1904.

Turning our attention to the daily chart, the unit recently formed two back-to-back indecision candles at daily support drawn from 1.2135, followed closely by the 161.8% Fib ext. at 1.2119 taken from the high 1.2706. A violation of these two supports may call for price to challenge the nearby daily Quasimodo support at 1.2037. Conversely, should the bulls remain on the offensive here, the next area of interest falls in at 1.2252-1.2342 (a resistance zone).

Although Friday's US employment report triggered a wave of buying off the H4 mid-way support level at 1.2150, there was very little follow-through generated. As you can see, the H4 candles have been teasing the 1.2150 barrier since Wednesday and have made very little attempt to break above the nearby H4 supply zone seen overhead at 1.2213-1.2199 (encapsulates the 1.22 handle/weekly broken Quasimodo support line).

Our suggestions: As of this time, we do not see much to hang our hat on at the moment. Even with a H4 close above the current H4 supply zone, there is not a lot of room seen for this unit to advance given the H4 mid-way resistance at 1.2250. A decisive close below 1.2150 on the other hand likely clears the path south down to the H4 demand at 1.2017-1.2062, which happens to intersect nicely with the daily Quasimodo support at 1.2037. Therefore, one could look to short beyond this mid-level number (waiting for price to retest the underside of this barrier, which is preferably followed up with a H4 bear candle is advised) down to this H4 demand.

Data points to consider: There are no high-impacting events affecting either the GBP or the US dollar today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for price to engulf 1.2150 and then look to trade any retest seen thereafter ([wait for a reasonably sized H4 bearish close to form before looking to pull the trigger] stop loss: ideally beyond the trigger candle).

AUD/USD:  

Weekly gain/loss: – 59 pips

Weekly closing price: 0.7534

(Trade update: the long trade taken from 0.7520 on Thursday was cashed in at the 0.7550 barrier following the US job's report on Friday).

The commodity currency sustained further losses last week, resulting in the unit crossing swords with a weekly support area formed from 0.7524-0.7446. In consequence to this, we could very well see the buyers make an appearance from here this week.

In a similar fashion to the weekly chart, the daily candles have also connected with the top edge of a daily support area drawn from 0.7449-0.7506. This area, as you can probably see, happens to be sited within the above noted weekly support area. This – coupled with Friday's fairly strong-looking daily bullish rotation candle, could see the buyers potentially move into a higher gear here!

Stepping across to the H4 scale, the impact of the better-than-expected US non-farm payrolls data drove prices skyward on Friday. This brought the H4 mid-way resistance 0.7550 back into the picture which managed to hold firm into the close.

Our suggestions: In view of the higher-timeframe structure, we would typically be looking for longs above 0.7550. However, with February's opening level at 0.7577 lurking just ahead, followed closely by the 0.76 handle and daily resistance at 0.7609, buying this market is challenging! As you can see, there is not much in the way of a tradable setup on the Aussie at present. Therefore, we'll await further developments on the sidelines today.

Data points to consider: There are no high-impacting events affecting either the Australian dollar or the US dollar today

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/JPY

Weekly gain/loss: – 75 pips

Weekly closing price: 114.77

The USD/JPY closed marginally higher last week, managing to hit a high of 115.50. Although a minor end-of-week correction was seen, the pair still looks to be on course to connect with the nearby weekly resistance level at 116.08, followed closely by the 2017 yearly opening level at 116.97.

On the other side of the ledger, the daily candles remain trading within the walls of a daily resistance area coming in at 115.62-114.60. Also noteworthy here is Friday's candle printed a nice-looking daily bearish selling wick which, to the majority of candlestick traders, is likely considered a sell signal.

A brief look at recent dealings on the H4 chart shows that there was little response seen from the candles following the release of Friday's US job's report. Nevertheless, the pair did end up selling off an hour or so later, taking out the 115 psychological level and closing the week just ahead of a H4 support registered at 114.59/H4 mid-way support at 114.50.

Our suggestions: While the weekly timeframe suggests that buying from the current H4 support region is valid, the daily timeframe indicates that further selling could be on the cards. A buy from here is a risky trade in our book, and not really something we would want to get involved in. Selling from 115 on any retest seen also has the same problem. Although you'd effectively be selling with daily flow, you would, at the same time, potentially be placing yourself against weekly opposition! In light of this, our team will humbly step aside during today's trading and reassess going into Tuesday's opening.

Data points to consider: There are no high-impacting events affecting either the US dollar or Japanese Yen today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/CAD

Weekly gain/loss: + 86 pips

Weekly closing price: 1.3461

The USD/CAD continued to move north last week and managed to marginally close beyond the 2017 yearly opening level at 1.3434. Since the close above this line is relatively minor, and taking into account that there is a nearby weekly double-top formation seen around the 1.3588 region (green circle), we do not consider 1.3434 to be out of the picture as a resistance just yet!

Zooming in and looking at the daily picture, price came within striking distance of clipping a daily Quasimodo resistance level at 1.3557 before aggressively dropping down to test a daily demand coming in at 1.3371-1.3437. In order for the weekly bears to succeed in pressing lower this daily area would need to be engulfed. Beyond this zone, our team sees reasonable space for price to move lower with the next downside target not coming into the picture until the support area at 1.3212-1.3169.

After price shook hands with the H4 supply zone at 1.3558-1.3512, and closed back below the 1.35 handle we saw the piece drive down to the 1.3419/1.3434 region (November/December/January's opening levels). As can be seen from the chart, the zone held beautifully and rebounded price into the closing bell. This downside move was fuelled by a round of upbeat Canadian labor market figures and a mixed dose of US employment data.

Our suggestions: In a nutshell, the structure of this pair can be boiled down to the following:

Weekly action suggests that the bears could come into play.

Daily price is trading from demand so this evidently favors the bulls.

And H4 flow is currently seen capped between 1.3419/1.3434 and the 1.35 handle.

Ultimately, we will not be happy selling this market until the current daily demand is out of the picture. Despite this, a break below 1.3419/1.3434 may entice sellers down to the H4 broken Quasimodo support at 1.3353 since, other than the 1.34 barrier, we see very little active H4 demand to the left of price. In regards to buying this unit, we feel it would just be too much of a risk considering the weekly structure noted above.

Data points to consider: There are no high-impacting events affecting either the US dollar or Canadian dollar today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/CHF

Weekly gain/loss: + 30 pips

Weekly closing price: 1.0105

Despite back-to-back weekly selling wicks, the weekly candles continue to gravitate northbound. Last week, nonetheless, the unit came within striking distance of the 2017 yearly opening level at 1.0175, which could be enough to force weekly action lower this week.

Turning over a page to the daily timeframe, Tuesday saw price clip the underside of a daily supply coming in at 1.0248-1.0168 and climb lower. We do not see much active demand to the left of current price until the pair reaches the daily demand pegged at 0.9929-0.9975, which happens to intersect with a daily support level seen at 0.9950.

Analyzing Friday's sessions on the H4 chart shows that price tagged H4 resistance at 1.0135 and sold off down to the 1.01 handle, following the US employment report. As of this point, 1.01 remains firm, but given the higher-timeframe structure and how deep price breached the psychological boundary, we may see the unit trade lower today.

Our suggestions: Despite the higher timeframes suggesting that a downside move is potentially at hand, we have an interesting number seen directly below on the H4 chart at 1.0066: March opening level. This number also boasts H4 trendline confluence from the low 0.9929 and a H4 127.2% Fib ext. at 1.0071. While this confluence is attractive and will likely bounce price, we will pass on buying from here. Entering long against the higher-timeframe technicals and also considering that we have little wiggle room from here until price connects back up with 1.01 is not really something we can get excited about. Given these factors, we may remain on the sidelines today.

Data points to consider: There are no high-impacting events affecting either the US dollar or Canadian dollar today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

DOW 30

Weekly gain/loss: – 103 points

Weekly closing price: 20887

The US equity market printed its first losing week since early Feb last week. The bearish close is not something we would label significant, however, seeing as how price remained within the prior week's range and sported a minor end-of-week bullish correction. With equities still seen trading nearby record highs, where do we go from here? Well, given that there is absolutely no weekly resistance levels in sight, the best we can do for the time being is continue looking to ‘buy the dips'. The closest higher-timeframe area can be seen at 20714-20821: a daily demand zone, which is currently in play as we write.

Looking over to the H4 chart, we can see that the H4 candles whipsawed above the H4 supply zone coming in at 20951-20911 shortly after the release of Friday's US employment report. The knee-jerk reaction was a short-lived one, however, with the piece ending the week tapping the March opening level seen below at 20824.

Our suggestions: In essence, our team is still in favor of the index rallying higher. Be that as it may, the H4 supply at 20951-20911 and nearby 21000 line would need to be taken out beforehand. Therefore, until we see a H4 close print above these areas, we will not be considering positions in this market.

Data points to consider: There are no high-impacting events that should affect this market today.

Levels to watch/live orders:

• Buys: Watch for price to engulf 21000 and then look to trade any retest seen thereafter (waiting for a lower-timeframe confirming signal to form [see the top of this report] following the retest is advised] stop loss: dependent on where one confirms the level).
• Sells: Flat (stop loss: N/A).

GOLD

Weekly gain/loss: – $30

Weekly closing price: 1204.3

The gold market was really hit hard last week, losing around $30 in value! And, according to the weekly structure, price could potentially continue driving lower until we reach the weekly support level drawn from 1180.1. Despite this, there is also a chance that the yellow metal may recover some of its recent losses this week as daily action recently tested the top edge of a daily support area drawn in at 1197.4-1187.7.

Swinging over to the H4 chart, bullion was pulled higher on the back of Friday's US employment report. This, as you can see, brought the unit back up into the jaws of a H4 supply zone seen at 1208.8-1204.5, which right now, is seen holding ground.

Our suggestions: Given the conflicting signals seen from the weekly and daily timeframes, this remains a difficult market to read. For all intents and purposes, neither a long nor short seems attractive at this time. Personally, we may just hang fire for the moment and look to reassess structure going into tomorrow's opening.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

EUR/USD

The EUR/USD pair closed the week at 1.0670, its highest settlement in five weeks, on headlines released late Friday indicating that the ECB´s Government Council discussed the possibility of raising rates before the end of their bond-buying program, during the meeting held last March 9th. Investors have been long speculating about the ECB beginning tapering, and despite Draghi's efforts to down talk the matter, is clear that some members of the council that had opposed to easing since the beginning, are now making their voice heard. The advance has been quite shallow, as the pair remained below the 1.0700 threshold, but somehow indicates a limitation to the downward potential of the pair.

The greenback closed the week with gains against the rest of its major rivals, as the US Nonfarm Payroll report, also released on Friday, pretty much confirmed 25 bps rate hike this upcoming Wednesday. According to the official release, the US economy added 235,000 new jobs in February, whilst the unemployment rate edged down to 4.7% and the underemployment rate to 9.2% from previous 9.4%. Wages were mixed, as monthly basis rose by 0.2%, missing expectations of 0.3%, but year-on-year surged to 2.8%, whilst January reading was revised higher, also to 2.8% from previous 2.5%. The solid job creation alongside with the advance in wages, backed Fed's officers jawboning from the past couple of weeks, supporting the move.

From a technical point of view, the pair is biased higher, although still needs to break above the 1.0700/20 region to confirm a more sustainable recovery. In the daily chart, technical indicators have entered positive territory with strong upward slopes, whilst the price settled above its 20 and 100 DMAs, above this last for the first time in over a month, although both moving averages maintain their downward slopes. The pair has a major resistance around 1.0710, the 38.2% retracement of the post-US election decline that needs to be broken to confirm a bullish extension. Shorter term and according to the 4 hours chart, the risk is also towards the upside, as technical indicators have barely retreated within overbought readings, whilst the price has broken above all of its moving averages. Above the mentioned resistance, the pair has scope to rally up to 1.0810, the 50% retracement of the mentioned decline.

Support levels: 1.0660 1.0635 1.0600

Resistance levels: 1.0720 1.0755 1.0790

USD/JPY

The USD/JPY pair jumped to 115.50 on Friday, its highest since mid January, boosted by a better-than-expected US employment report that backed the case for a US Fed's rate hike this upcoming week. The strong report helped US Treasury yields to hold near 2017 highs reached ahead of the release, although they later eased, to close the day with gains anyway. The 10-year benchmark peaked at 2.62%, before settling at 2.58%. The BOJ will have its monthly monetary policy meeting this week, but is largely expected to remain on hold, with little chances of further easing in Japan. Much of the upcoming trend will depend on how the market reacts to Fed's announcement this Wednesday, rather focusing on what's next for rate hikes. A hawkish Yellen that hints at least two more rate hikes for this year, should send the pair higher. From a technical point of view, the daily chart shows that the price settled a few pips above 114.55, THE 23.6% retracement of the November/December rally, a level that capped the upside for most of the past February, whilst the 100 DMA maintains a bullish slope a few pips below it, indicating that the pair may resume its advance, as long as it holds above it. Technical indicators in the mentioned chart hold within positive territory, but with no directional strength. In the 4 hours chart, technical indicators have pulled sharply lower from overbought readings and are currently near their mid-lines, whilst the 100 and 200 SMA hold directionless around 113.40/50.

Support levels: 114.55 114.15 113.70

Resistance levels: 115.10 115.50 115.85

GBP/USD

The GBP/USD pair closed with losses for a seventh consecutive week in the 1.2160 region and not far from the weekly of 1.2133, with the Pound undermined by BREXIT woes. News released early Friday show that consumers expect inflation to continue advancing, according to the BOE's quarterly inflation survey, seen now at 2.9% from November's 2.8%. Industrial and Manufacturing Production during January fell, with the first down by 0.4% as expected, and the second by 0.9%, while yearly basis, both advanced below expected. This upcoming week, the BOE will have a monetary policy meeting, but given that the Bank upgraded its forecasts last month, seems unlikely there will be revisions to inflation or growth. The key benchmark rate is expected to be left unchanged at record lows of 0.25%. Attention will rather center on the Brexit bill that returns to the House of Commons for a final revision. Technically, the pair seems to have decelerate its decline, as in the daily chart, the pair has entered a consolidative stage, with the price still far below a bearish 20 SMA, but technical indicators turning modestly higher within negative territory. In the 4 hours chart, the price keeps struggling around a bearish 20 SMA, whilst technical indicators are unable to enter positive territory, with the RSI indicator turning south around 43, maintaining the risk towards the downside.

Support levels: 1.2130 1.2085 1.2040

Resistance levels: 1.2190 1.2220 1.2260

GOLD

Spot gold ended the week at $1,204.26 a troy ounce, sharply lower for a second consecutive week. The commodity bounced from a fresh multi-week low of 1,194.94 achieved early Friday on hopes the US Federal Reserve will raise rates as soon as this Wednesday. The recovery was triggered by bargain buying aligned around 1,200.00, later extending on news ECB´s Government Council discussed how to begin the process of tapering its facilities' programs. The daily chart shows that the commodity pared losses after nearing the 50% retracement of its December/January advance at 1,193.00, while also managed to settle above a bearish 100 DMA after briefly falling below it, this last at 1,197.10. In the same chart, technical indicators have pared losses, but the Momentum indicator holds well below its 100 level whilst the RSI indicator stands at 35, both indicating that further gains are still unlikely. The immediate resistance is the 38.2% retracement of the mentioned advance at 1,209.50. In the 4 hours chart, technical indicators corrected extreme oversold conditions, now heading higher, but within bearish territory, whilst the 20 SMA maintains a strong bearish slope right above the current level, indicating a limited upward scope at this point.

Support levels: 1,197.10 1,188.20 1,180.50

Resistance levels: 1,205.60 1,214.20 1,221.70

WTI CRUDE

Crude oil prices extended their decline last Friday, with West Texas Intermediate futures settling at $48.37 a barrel, its lowest since November 2016. The black gold was weighed by the continued advance in US production, confirmed on Friday after the Baker Hughes report showed that the number of active rigs drilling oil rose for an eight consecutive week. The US added eight rigs to a total of 617, the highest since September 2015. Earlier in the week, the EIA reported that US crude stockpiles rose to 528.4 million barrels, the highest since record keeping began in 1982. From a technical point of view, US crude is set to decline further, given that in the daily chart, it broke below all of its moving averages, now below the 200 DMA for the first time this year, whilst technical indicators maintain their sharp bearish slopes, despite being in oversold territory, with the RSI indicator currently at 21. In the 4 hours chart, the 20 SMA has turned sharply lower, but still lags price action, currently at 50.50 while technical indicators have turned flat within oversold territory, rather reflecting the limited volume at the end of the week than suggesting downward exhaustion.

Support levels: 48.00 47.30 46.65

Resistance levels: 48.80 49.50 50.10

DJIA

Wall Street closed in the green last Friday, with the Dow Jones Industrial Average up by 44 points, to 20,902.98, down for the week by 0.5%. The Nasdaq Composite added 23 points, and closed at 5,861.73, while the S&P ended at 2,372.60, up by 7 points. A strong US employment report was offset by falling oil prices, as the commodity trimmed its early gains and settled at fresh multi-month lows. Among the Dow, General Electric led advancers, adding 2.09%, followed by UnitedHealth Group that closed 1.17% higher. Boeing led decliners, shedding 1.04%, while Exxon Mobile closed 0.07% lower. Goldman Sachs also closed in the red, down 0.72%. Dow's daily chart shows that the index continues challenging, but holding, above a bullish 20 SMA, at 20,825, whilst technical indicators have extended their declines within positive territory, with the Momentum indicator nearing its 100 level, and the RSI still around 65. In the 4 hours chart, the index battles around a modestly bearish 20 SMA, but bounced from a bullish 100 SMA whilst technical indicators remain stuck around their mid-lines, indicating some consolidation rather than confirming an upcoming leg lower.

Support levels: 20,825 20,777 20,738

Resistance levels: 20,915 20,978 21,045

FTSE 100

The FTSE 100 pared losses, advancing for the first time in the week on Friday, up 28 points to 7,343.08. The index found support in energy-related shares that closed higher as oil prices recovered at the beginning of the day, although the commodity later plunged, anticipating some negative developments for this Monday. BT Group was the best performer, adding 3.71% after the company announced it will make its Openreach division a legally separate company. Oil company BP added 3,68%, whilst Royal Dutch Shell gained 1.35%. Among mining-related equities, Glencore advanced 1.16% after S&P upgraded its rating on the share, although Randgold Resources was among the worst performers, closing down 1.30%. The daily chart shows that the benchmark has managed to recover above a still bullish 20 DMA, whilst the Momentum indicator has bounced modestly from its 100 level and the RSI indicator turned higher, now around 61, not enough to confirm further advances. In the shorter term and according to the 4 hours chart, the technical stance is positive, but limited, as the index held above a still bearish 20 SMA whilst technical indicators aim higher, coming from oversold levels, but still within neutral territory.

Support levels: 7,332 7,306 7,262

Resistance levels: 7,397 7,420 7,450

DAX

European equities opened the day with a strong footing, but trimmed all of their daily gains on news indicating that the ECB discussed a rate hike in their latest meeting. EU policymakers discussed possible exit strategies from their ongoing stimulus program, although no decision was made on the matter. The German DAX traded as high as 12,067 before turning south, ending the day down by 15 points at 11,963.18. Financials led the way higher, with Commerzbank leading advancers with a 5.57% gain, followed by Deutsche Bank that gained 2.31%. Leading decliners was Vonovia that closed 1.85% lower. The index remains within a consolidative stage, with a limited bearish scope, given that in the daily chart, it develops above a bullish 20 DMA, currently at 11,909, whilst technical indicators head modestly lower within positive territory, not enough to confirm a bearish continuation. In the 4 hours chart, the index has settled a few points below a modestly bearish 20 SMA, whilst technical indicators are aiming to bounce from their mid-lines, in line with the longer term perspective.

Support levels: 11,909 11,857 11,819

Resistance levels: 12,018 12,067 12,100

ENERGY

Crude oil was among top losers last week, on fall of nearly 10%. WTI oil returned below psychological $50 per barrel support for the first time since early Dec 2016. Strong sell-off was triggered by record build in crude oil stocks which rose by 8.2 million barrels previous week, compared to forecasted build of 1.1 million barrels.

Also, increased oil production in the US that raises doubts on global production cuts, agreed last year on OPEC-led meetings, sidelines expectations of oil price increase and intensifies fears of further fall of oil prices, threatened by global oversupply.

Last week's fall also broke some strong technical supports, increasing risk of further easing, as bears hit 50% of mid-Nov/early Jan $42.19/$55.22 recovery rally, turning risk towards $47.00/$45.00 zone in the near-term.

Broken $50 support now acts as initial resistance that keeps so far mild recovery attempts limited and maintains negative outlook.

Brent oil was tracking WTI movements and showed similar reaction on fall from week's high at $56.62 to fresh 2 ½ month low at $51.50, losing nearly 7% for the week, the biggest weekly fall since the last week of Oct. Technical studies suggest that further weakness could be anticipated after the price broke below strong supports at $53.15 and $52.30.

Correction of last week's strong fall could be expected on profit-taking, but overall bearish bias is expected to persist. Initial resistance at $52.30 is followed by $53.15/45, with extended recovery not to exceed $54.60 resistance.

Natural gas extended recovery for the second straight week and approached strong Fibonacci 38.2% resistance at 3.042, after denting 200MA barrier at 2.964. Gas price is on track for the second weekly bullish close that signals further recovery. Next technical barriers lay at 3.130 and 3.205. Correction should be ideally held above 2.80 to keep fresh bullish momentum intact.

COMMODITIES

Spot gold remained strongly in red for the second week and probed below psychological support at $1200 last week. Markets are very confident in US rate hike on Fed's meeting next week that keeps the yellow metal under increased pressure. Investors are worried that scenario from last Dec, when Fed increased rates after one year and Gold fell to 10-month low, could repeat this time. Gold is on track for the second strong weekly fall that marks total loss of over 4% since previous bull-leg stalled at $1260 zone. Also, strong signals that the US economy is recovering encourage gold sellers.

However, traders think that Gold loss might be limited despite strong pressure on rate hike expectations, as political uncertainty in Europe and USA, as well also tremors that come from Far East, may keep Gold's safe-haven appeal in play. Bearish technicals studies work in favour of sellers, suggesting that corrective upticks should be ideally capped at $1212 zone and extensions not to exceed $122 barrier, to keep bearish outlook in play.

Spot silver was down over 5% for the week and extended weakness from $18.47, late Feb recovery high, to hit levels below $17.00 per ounce. Negative sentiment that hit precious metals was sparked was sparked by strong expectations  for Fed's rate hike and may persist as solid US data released recently, support Fed's decision to start tightening the policy from Q1 2017.

Technicals turned into negative mode and suggest further weakness that may extend towards next technical supports at $16.70 and $16.30.

On the upside, $18.40 and $18.88 levels mark good technical barriers that are expected to cap.

Coffee C contract for May ended week in red after trading within $144.30 and $139.60 range and repeated failure to sustain repeated break below psychological $140.00 support. The price closed above strong technical support at $141.20, keeping the downside protected for now, as two strong supports at $140.00 and $139.60 are seen as key levels, break of which could trigger further easing. Technical studies remain bearishly aligned and would keep risk shifted lower, after Friday's close below another pivotal support at $142.00.

Copper contract for May fell sharply last week, losing around 3.5% on dip to 2.5580, the lowest price since early Jan. Strong sell-off was triggered by profit-taking on long positions as investors were concerned that markets had decent supplies, despite strikes and export ban that reduced production in two biggest mines in Chile and Indonesia and plans for another strike in mine in Peru. In addition, copper inventories soared by 74%, offsetting support expected from possible production shortage on strikes. Copper price recovered mildly on Friday, bouncing from weekly low at 2.5580 to the levels above 2.6100. Technical studies remain weak after last week's fall and see potential for further price easing, with investors investors expected to stick to 'buying the rumours selling the fact' scenario.

INDICES

Wall Street ended up on Friday after solid US jobs data signalled further economic strength and supported expectations the Federal Reserve will raise interest rates next week. Indexes ended lower for the week, however, with the S&P 500 and Nasdaq breaking a six-week streak of gains. DOW Jones closed at 20888 for the day, marking the second consecutive bullish daily close, but weekly close was in red for the first time since mid-Jan.

S&P500 followed, closing at 2371, on the second consecutive bullish daily close but weekly close was in red.

UK's FTSE100 managed to recover ground, closing on Friday at 7345, on bounce from weekly low at 7245 after strong reversal signal, generated during the week. Fresh bullish sentiment is turning focus again towards record high at 7382.

Nikkei 225 closed on Friday at 19440, extending recovery os Thu/Fri that managed to recover the largest part of losses made earlier this week. Technical studies remain bullish overall and keep focus at the upside, after last week's easing was contained by strong technical support at 19.50

FOREX

The two key events highlighted the week behind us: ECB policy meeting and US jobs data. The US dollar showed mixed reaction on these events. After the European central bank left rates unchanged, as widely expected, traders turned focus on comments from central bank's president Mario Draghi.

He commented current situation in the Eurozone, with focus on inflation and QE program that was closely monitored by traders. Economic situation in the bloc is still requiring ultra-low rates, despite inflation showed signs of picking up and raised ECB's inflation projections, political risks on coming elections in Netherlands and France, need to be considered.

Other important subject was QE program, as investors expected Draghi to give more signals of tapering, as announced earlier. ECB president said that current situation needs further bond-buying but this would be gradually reduced during the year. Markets saw this comment as hawkish and Euro jumped on fresh positive sentiment.

The EURUSD recovered all losses made during the week on fall from 1.0640 to 1.0525 and spiked to 1.0700 in late Friday's trading. Strong technical resistances were taken out and near-term bias turned higher.

The Euro's rally was supported by weaker dollar that was disappointed after solid US jobs report was weakened by lower than expected rise in US wages in February. The dollar has failed to appreciate overall solid jobs report that is expected to help Fed in making decision on next week's monetary policy meeting.

GBPUSD ended the second week in red, remaining under strong pressure on Brexit concerns, but showing hesitation at important support at 1.2155, which was dented but without clear break. However, strong negative sentiment persists as markets are awaiting next week's continuation of parliament's meetings regarding conditions of starting official divorce process.

The pair remained unaffected by today's US data and trading within narrow range for past two days.

Consolidation is likely to precede fresh weakness that may extend towards 2017 lows at 1.2000 zone.

USDJPY was dragged lower after release of US jobs data, failing to fully capitalize on last week's strong rally that peaked well above 115.00 mark. Strong bullish technical signals that were generated during the week, pushed traders into dollar longs, but the pair's rally stalled at 115.50 on Friday and pullback after US data that slightly upset dollar's bulls, resulted in close below 115.00 handle. The price may spend some time in consolidation, ahead of next week's top event, FOMC meeting that is seen as next strong market driver.

USDCAD eased on Friday after the greenback was pulled lower on US jobs report and Canadian dollar appreciated better than expected domestic jobs data that offset risks to the economy from an uncertain outlook. The pair fell to 1.3420 on Friday, pulling back from Thursday's multi-week high at 1.3534.

However, outlook for the short term remains bullish on expectations of US rate hike and supported by positive technical studies. Correction could extend down to 1.3300/1.3200 zone, before bulls resume.

It will a busy Central Bank week this week, with the Fed, BoJ and BOE all on tap. The markets are fully subscribing to a March Fed rate hike, so the focus will be on the dot plots and any hint of accelerating the path of interest rate normalisation.

Beyond the central banks, the markets will deal with the messy and expensive Brexit divorce proceedings and a possible article 50 trigger. And of course, markets will be closely eying the Dutch elections as tensions rise across Holland, while US President Trump meets with German Chancellor Merkel. Regionally, US Secretary of State Tillerson visits Asia amid rising geopolitical noise, plus the first budget outline for the US fiscal 2018 year is expected along with a confrontation about the US debt ceiling, which could be the moment of truth for the markets.

While the NFP was supposed to be the key attraction Friday, the debate surrounding the ECB and President Trump outstayed the NFP effect. Friday's solid NFP data will certainly open the door for the March Hike, but the print was simply not strong enough to move the Fed dial for repricing in June, and with dealers underwhelmed, they were quick to take profit on long dollar positions heading into the weekend.

Australian Dollar

The dollar rally, for the time being, has been less significant against the AUD, and with risk trading well, the market has been unable to move below.7500, likely supported by a relatively hawkish RBA statement.

Attention focuses on expectations surrounding commodity prices, and while the oil markets roll over, sentiment in the commodity space remains buoyant which should be supportive to the Aussie dollar. The balance of risk will be lower for the AUD near term, due to political tensions in the UK, the Netherlands, and the dot plot outlook in the USA, as mentioned above.

Euro

Draghi's forward guidance in the Q&A (despite the statement unchanged) has left the Euro looking solid as traders' pile into the Euro crosses, particularly against the JPY and CAD. There has been an aggressive move higher on the Euro as political risk positioning unwinds with French election volatility dropping, as it appears a Le Pen victory was overestimated and as traders establish newly minted long Euro positions on Draghi's suggestive guidance.

Japanese Yen

It is widely expected that the BOJ money printing presses will continue to churn and it is unlikely that the BOJ, with USDJPY trading below 120, will risk any shift in policy. In the meantime, it is over to the Federal Reserve board to do the heavy lifting.

I had a lighthearted conversation with a colleague not so long ago, asking if they feel they might have an irrational bias toward shorting oil, simply because the flow on effect will mean cheaper petrol when they go to fill up their cars later on.

I honestly feel I might have this! Am I alone here? Surely not.

Well, now we've got that little disclaimer out of the way, lets have a look at some oil charts. We've been watching this oil resistance zone that we can see on the weekly below.

Oil Weekly:

Price has rejected out of the zone and we've seen some follow through, which has brought us down to retest the upper side of this bearish trend line, this time as possible support.

Oil Daily:

This is the level that's in play, but seeing as though the higher time frame horizontal support has held and we've seen the follow through from sellers that we have, I am inclined to play oil from the short side.

Oil Hourly:

Already we can see these types of short term pullbacks holding perfectly.

Are shorts in play already?

Just keep in mind my possible little irrational bias from above!

GOLD: The commodity closed lower the past week but it looks to trigger corrective recovery. On the downside, support comes in at the 1,200.00 level where a break will turn attention to the 1,190.00 level. Further down, a cut through here will open the door for a move lower towards the 1,180.00 level. Below here if seen could trigger further downside pressure targeting the 1,170.00 level. Conversely, resistance resides at the 1,220.00 level where a break will aim at the 1,230.00 level. A turn above there will expose the 1,240.00 level. Further out, resistance stands at the 1,250.00 level. All in all, GOLD looks to weaken further.

EURUSD: The pair faces further recovery pressure following its past week higher close. On the upside, resistance comes in at 1.0700 level with a cut through here opening the door for more upside towards the 1.0750 level. Further up, resistance lies at the 1.0800 level where a break will expose the 1.0850 level. Its weekly RSI is bullish and pointing higher suggesting further strength. Conversely, support lies at the 1.0600 level where a violation will aim at the 1.0550 level. A break of here will aim at the 1.0500 level. All in all, EURUSD faces further upside pressure.

EURGBP- The cross closed higher for second week in a row leaving risk of price bull continuation on the cards in the new week. Support lies at the 0.8700 level where a violation will turn focus to the 0.8650 level. A break will expose the 0.8600 level. Resistance resides at the 0.8800 level where a violation if seen will turn risk towards the 0.8850 level. Further up, resistance resides at 0.8900 level followed by the 0.8950 level. Its weekly RSI is bullish and pointing higher suggesting further upside pressure is likely. All in all, EURGBP remains biased to the upside short term.

The set of strong non-farm payroll data from US should have finalized the case for Fed to hike interest rate this week. Dollar was indeed given a boost over last week and ended strongly. Nonetheless, the greenback was firstly overwhelmed by strength in Euro, and secondly retreated on profit taking. Overall, Euro ended the week as the strongest major currency as supported by upbeat comments from ECB president Mario Draghi as well as rate speculations. Dollar followed as the second. At the other end, Sterling was troubled by worries over the fading impact it depreciation last year on the economy, uncertainties over Brexit terms, and uninspired by UK budget. The pound ended as the second weakest major currency next to Kiwi.

ECB Draghi deliver upbeat press conference

ECB left monetary policies unchanged as widely expected. Latest staff economic projections showed slight upgrade in the forecast for both growth and inflation in 2017 and 2018. More importantly, Draghi sound relatively upbeat in the post meeting press conference and noted that "there was a general recognition that the balance of risk has improved, certainly as far as growth is concerned". More in Cautiously Optimistic Draghi Sees No Urgency to Add Stimulus, Risks Less Pronounced.

Euro lifted further by rate speculations...

In addition, there were news reports on Friday saying that the ECB governing council members have discussed the possibility of raising interest rate before the asset purchase program ends by the end of the year. It's noted that some members were clearly unhappy with the adverse impacts of negative interest rates and would like to at least move them back to positive territory as soon as possible. Some analysts are predicting ECB to hike rates around the turn of 2017/18 with some forecasting a hike as early as this September.

...focus temporarily away from politics

The above developments sent the common currency broadly higher last week. Traders are temporarily shifting their attention away from the political uncertainties in Eurozone. And of course, based on recent economic data, the outlook for Eurozone has brightened up a bit, but that's only on provision that the political risks don't materialize. While technically developments support further upside in Euro in near term, the road would likely stay bumpy.

More upside in Euro technically

Talking about technicals, EUR/USD's break of 1.0630 resistance confirms near term reversal and further rise should be seen to 1.0828 and above. EUR/JPY is likely resuming larger rise from 109.20 and should target 124.80 resistance and above. EUR/GBP is resuming the rebound from 0.8303 for 0.8851 and above. EUR/AUD also staged a near term reversal and should target a test on 1.4721 resistance.

NFP seal the deal for Fed hike

While Friday's solid NFP report should seal the deal for Fed to hike interest next week, it wasn't strong enough to push speculations of more than three rate hikes this year. Fed fund futures are pricing in 88.6% chance of interest at 75-100bps after March meeting. There is 53% of fed funds rates hitting 100-125bps after June meeting, and 62.1% of hitting 125-150bps by the end of the year. Fed's new economic projections to be released this week will be the key to guide market expectations.

Yields hesitated for breakout

Treasury yields staged a strong rally last week but the close was not too convincing yet. 30 year yield reached as high as 3.201 and breached 3.197 resistance. But it pared some gains to close at 3.169. 10 year yield reached as high as 2.615 but failed to take out 2.621 resistance and closed at 2.582. 2.545 support and 2.621 resistance are the two levels to watch in TNX this week, in particular on Wednesday with FOMC announcement. That would be the make or break levels for Dollar in near term.

Dollar index pulled back

Dollar index failed to extend the rebound from 99.23 last week and closed sharply lower on Friday at 101.25. Further rise is still in favor as long as 100.66 support holds. But the structure of the rise from 99.23 is unconvincing, with a corrective look. Indeed, a break of 100.66 will indicate that the rebound is finished and would turn near term outlook bearish for 99.23 and below. When Dollar index does resume the rise again, we'll be cautious on topping around 103.82 high if we don't see any upside acceleration.

Fed, BoJ, SNB, BoE to feature a busy week

The coming week will be very busy with a lot of key events. Fed, BoJ, SNB and BoE will meet with main focus on FOMC. Other three central banks will stand pat. Also, focus will also be on German ZEW, UK employment. US CPI and retail sales, Australia employment and New Zealand GDP.

Hold EUR/AUD long

Regarding trading strategies, as suggested in last week's weekly report, we bought EUR/AUD at 1.3900 last week as the cross pulled back to 1.3874. Our stop at 1.3800 wasn't hit. And subsequent rise to as high as 1.4178 affirmed our bullish view. We're tentatively treating EUR/AUD as reversing medium trend. And this view is support by the cross defending 1.3671 key support level and bullish convergence condition in daily MACD. Hence, for the moment, we'll raise the stop to 1.4000, slightly below 1.4014 resistance turned support, to give the position a bit of room to run. The key level is channel resistance at around 1.4469. We'd decide whether to take profit around that level later, based on momentum.

Buy USD/JPY with tight stop

In addition to holding long in EUR/AUD, we'd like to consider buying USD/JPY this week. The pair's break of 114.94 resistance indicates near term reversal. That is, corrective pull back from 118.65 has completed at 111.58 already, on double bottom pattern (111.58/111.68). The view is clouded by the pull back in Dollar after NFP. Also, yields failed to sustain above recent highs for up trend resumption. Nonetheless, the recovery in stocks on Friday indicates stabilization. And the pull back in DJIA, S&P 500 and NASDAQ could be over. It's an opportunity to try to bet on hawkish FOMC projections, but only with a tight stop. Hence, we'll buy USD/JPY on dip to 114.00, with a stop at 113.50, just below 113.60 support.

EUR/USD Weekly Outlook

EUR/USD rebounded strongly last week and hit as high as 1.0698. The strong break of 1.0630 resistance indicates completion of corrective pull back from 1.0828. More importantly, whole rise from 1.0339 is possibly resuming. But still, such rise is still seen as a correction and the larger down trend should resume after it completes.

Initial bias in EUR/USD remains on the upside this week for 1.0828. Break there will target 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. But upside should be limited there to completion the corrective rise and bring reversal. Meanwhile, on the downside, break of prior resistance at 1.0630 will turn bias back to the downside for retesting 1.0494 low.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds. However, firm break of 1.1298 should now confirm long term reversal.

EUR/USD rebounded strongly last week and hit as high as 1.0698. The strong break of 1.0630 resistance indicates completion of corrective pull back from 1.0828. More importantly, whole rise from 1.0339 is possibly resuming. But still, such rise is still seen as a correction and the larger down trend should resume after it completes.

Initial bias in EUR/USD remains on the upside this week for 1.0828. Break there will target 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. But upside should be limited there to completion the corrective rise and bring reversal. Meanwhile, on the downside, break of prior resistance at 1.0630 will turn bias back to the downside for retesting 1.0494 low.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds. However, firm break of 1.1298 should now confirm long term reversal.