Sample Category Title

CADJPY has been finding strong support on the 40-day simple moving average (SMA) since the beginning of this month, creating a narrow sideways move.

Regarding to the momentum indicators, the RSI is flattening near the neutral threshold of 50 and the MACD is hovering above trigger and zero lines. Also, the price action holds above the mid-level of the Bollinger band, creating a trading range between the 38.2% Fibonacci of 81.42 and the 61.8% Fibonacci of 84.40 of the downleg from 89.25 to 76.60.

An advance above the 84.00 handle and the upper Bollinger Band, which stands near the 61.8% Fibonacci, could open the door for bullish actions towards the 85.25 resistance. Even higher, resistance would be faced around the 85.25 peak, registered on March 1.

However, a significant step lower, below the 40- and 20-SMAs as well as beneath the 50.0% Fibonacci of 82.90 could push the price until the lower Bollinger band of 81.80 and the 38.2% Fibonacci of 81.42.

Overall, a daily close below these lines and the 81.25 support, could confirm the long-term negative momentum.

Stocks

Stock markets are retreats from multi-month highs after the IMF lowered its global economic growth forecast to 3.3% from 3.5%, explaining this by the impact of trade tariffs. Meanwhile, the new trade conflict begins between the US and the EU. Americans defend Boeing, threatening to impose increased tariffs due to Airbus state subsidies. The trade conflict’s hotbed may well grow to a serious size as it was with China near year ago, although at the moment, it is not comparable with trade disputes between China and the U.S.

EURUSD

The pair has increased yesterday to 1.1280, but retreated at the end of the day to 1.1260, preparing for important news from the ECB and the Fed. The results of the monetary policy meeting and the subsequent Draghi press conference often cause a sharp surge in volatility in EURUSD. Potentially, Fed minutes can also influence the price dynamics of the currency pair. The focus is on resistance at 1.13, where now we see the upper range of the downward channel. Important support now seems at 1.12. The price dynamics beyond these levels can generate a powerful surge in the triggering of stop orders and may create an impulse for the next few days.

GBPUSD

Tough statements by European politicians, in fact, do not lead to an increase in the risk of the no-deal Brexit. It is expected that EU lawmakers will allow Britain to receive a second postponement, with an opportunity to automatically receive such a delay without the need to convene emergency summits every two weeks. The British pound, meanwhile, is stuck near 1.3050 with important support levels at 1.30, a decline below may indicate a break in the upward trend from last December.

Brent

Oil was under moderate pressure after touching $71 per barrel Brent. It is noteworthy that oil rather quickly received support on the levels close to $70. A further important support area is the $69.40 level, through which the 200-day moving average passes. Additionally, it is worth noting that the RSI quits the overbought area, which is often regarded as a precursor to further decline.

EU27 to decide on Brexit extension

Today is the day we’ve all been waiting for, the reason why markets have been so subdued at the start of the week. An emergency EU Brexit summit, ECB meeting and Fed minutes will ensure this is anything but a boring day in the markets.

Theresa May will learn the terms of the UK’s article 50 extension today, after the leaders of the other 27 countries meet to discuss her request. There are numerous ideas on the table, from May’s June 30th request to Donald Tusk’s one year “flextension” but it’s possible that neither will get the full backing of the EU27. Unfortunately for May, she doesn’t hold much leverage and is instead relying on the goodwill of the very peers she’s spent the last two years frustrating.

It’s very unlikely though that an offer won’t be forthcoming, it’s just a question of how politically painful it will be for the Prime Minister because with Parliament committing her to an extension and the current deadline two days away, she doesn’t have many options. Of course, Parliament could still back her deal by Friday and leave on 22 May but that doesn’t seem very likely right now.

GBPUSD Daily Chart

Is an extension bullish or bearish for GBP?

Brexit has gone from the source of volatility for the pound to sucking the life out of it. We’ve been rangebound in cable – like many other sterling pairs – for close to two months now and this constant indecision and delay tactics isn’t helping matters.

One thing that is interesting is that the rallies in GBPUSD are being sold into earlier each time. I don’t think this is a sign that no-deal risks are rising – even if they technically are as we’re two days from the current Brexit day with no deal – rather I think it may be an acceptance that a delay is inevitable.

If a long extension is agreed, what then? Is it bullish or bearish for the pound or just priced in? If it’s is the final of these three options, then what we could be seeing is profit taking on those positions that had built on the expectation of an eventual deal, creating potentially near-term downside pressure for the pound.

GBPUSD 4-Hour Chart

If we take the fundamentals out of this, this certainly looks like a bearish setup and 1.30 looks the more likely to break than 1.33, which would draw attention to 1.28 as most recent support back in mid-February.

Of course, with something as unpredictable as Brexit can be, this could change in a heartbeat and the EU27 may well offer something that tips the balance once again for the pound. It could be a very interesting second half of the week.

The DAX index continues to show volatility this week. After sharp losses on Tuesday, the DAX has reversed directions on Wednesday. Currently, the DAX is at 11,902, up 0.44% on the day. In economic news, there are no German or eurozone events on the schedule. On Wednesday, the ECB will set its monthly interest rate and release a policy statement. On Thursday, Germany posts consumer inflation and investors will also be keeping an eye on the OPEC meetings in Vienna.

With the economic outlook in the eurozone looking bleak, will the ECB send a gloomy message to the markets? The ECB is expected to maintain interest rates at a flat 0.00%, where they have been pegged since March of 2016. . Investors will be more focused in the rate statement, as a dovish message to the markets could push the euro lower. ECB policymakers have acknowledged the slowdown which has gripped Germany and the eurozone. The manufacturing sector has been particularly hard hit, as a slump in global demand has hurt exports, such as German cars and auto parts. Last week, the ECB minutes from the March meeting were pessimistic, as policymakers acknowledged that the economic outlook remained bleak. If the rate statement and comments from Mario Draghi disappoint investors, the DAX could lose ground.

The euro is holding above trendline support against the US dollar ahead of the ECB interest rate decision and monetary policy statement. Sellers are currently unable to move price below the 1.1250 level, keeping the overall intraday bullish bias intact. The four-hour time frame is showing that the inverted head and shoulders pattern remains valid while price trades above the 1.1216 level.

The EURUSD pair is only bullish while trading above the 1.1250 level, key technical resistance is found at the 1.1290 and 1.1350 levels.

If the EURUSD pair trades below 1.1250 level, key intraday support is found at the 1.1216 and 1.1170 resistance levels.

The British pound is testing towards trendline resistance against the US dollar as the pair consolidate ahead of today’s key EU meeting over Brexit. Bulls will need to hold price above the 1.3100 level in order for the GBPUSD pair to advance towards the 1.3180 level. Sellers will need to move price below the 1.2980 level to accelerate downside pressures over the medium-term.

The GBPUSD pair is only bullish while trading above the 1.3100 level, key intraday resistance is found at the 1.3180 and 1.3255 levels.

If the GBPUSD pair trades under the 1.2980 level, key intraday support is found at the 1.2940 and 1.2750 levels.

During Tuesday's session, the European Single Currency traded sideways to stay between the monthly PP and the weekly R1, as it was predicted! On Wednesday morning, the rate was supported by the 55-hour SMA to be located at the 1.1271 mark.

Looking on the chart, it seems that the currency exchange rate could break the resistance levels of the monthly PP and the weekly R2 to end the day at the 1.1300 level.

On the other hand, today's fundamental news could depreciate European Single Currency against the US Dollar to push the rate to the weekly PP at the 1.1218

Yesterday, the currency exchange rate traded between the simple moving averages to end the session at 1.3000. On Wednesday morning, the rate was supported by the 55-hour simple moving average to be located at the 1.3077 mark.

In regards to the near-term future, most likely, the rate will trade sideways to stay between the 36.10% Fibo at the 1.3162 mark and the bottom boundary of the medium pattern line at the 1.3000 level.

However, today's fundamental news could push the British Pound to depreciate against the US Dollar to the weekly S1 at the 1.2952 mark.

Note, watch out for the news!

Yesterday, the currency exchange rate slumped to the 111.00 level, breaking the previously drawn pattern line at 111.20. On Wednesday morning, the rate was located above the weekly S1 at the 111.14 mark.

In regards to the near-term future, most likely, the US Dollar will continue to depreciate against the Japanese Yen to end the day near the monthly pivot point at the 110.60 level.

However, today's fundamental news could help the US Dollar to appreciate against the Japanese Yen to break the resistance levels and end the day near the weekly pivot point at the 111.46 mark.

Note, watch out for the news!

Yesterday, the yellow metal broke through the monthly pivot point to end the trading session at the 1,304.00 level. On Wednesday morning, gold continued appreciating against the US Dollar to be located at the 1,304.64 mark.

In regards to the near-term future, most likely, the yellow metal will continue the surge towards the 23.60% Fibonacci retracement level at the 1,309.31 mark.

However, today's fundamental news could break the prediction to push gold to depreciate against the US Dollar to the monthly pivot point at the 1,299.43 mark.

Note, watch out for the news!