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USDJPY Intraday Analysis
USDJPY (110.53): The USDJPY currency maintained its declines although price posted a brief rebound. However, by the closing hours, the USDJPY eased back those short term gains. We expect that the USDJPY is on track to slip back to the 109.74 level where support could be formed. The overall price action in USDJPY remains flat within the 111.21 and 109.74 levels of resistance and support respectively. A breakout from this range should establish the near term direction of the currency pair.
EURUSD Intraday Analysis
EURUSD (1.1311): The euro currency came under pressure on Friday following the dovish comments from ECB's Couere. The common currency, however, managed to recover from the short term losses and closed flat on the day on Friday. As a result, price action near the bottom has consolidated into a falling wedge pattern. This could indicate an upside breakout in prices. If the common currency manages to break out above 1.1327, we could expect the bullish momentum to push the euro toward 1.1435 level where the resistance level is pending a retest.
Euro Under Pressure As Couere Talks About TLTRO
The U.S. dollar was seen easing back after briefly rising to a two month high. Economic data on the day was dominated by news about President Trump declaring a national emergency to fund the building of the border wall with Mexico.
The markets seemed somewhat muted to the news report on the day, but the sentiment could be affected given that this could potentially lead to a legal standoff.
Euro slips on Couere's comments on TLTRO
On the economic front, the euro slipped after Benoit Couere, one of the contenders as the next ECB President said that the central bank could restart its long term targeted operations financing program. Investors viewed this information as a sign of mounting weakness in the Eurozone economy.
This was not the first time; however, as the December ECB minutes showed that officials deliberated on whether to introduce the TLTRO program once again.
The UK's retail sales report scored better than expected to rise by 1.0% on the month and beat estimates of a 0.2% increase. Previous month's retail sales reports showed a 0.7% decline which was also slightly better than initial forecasts.
Trade balance figures from the Eurozone was in line showing 15.6 billion as expected.
Data from the U.S. showed that the regional manufacturing activity measured by the NY Fed showed the Empire State manufacturing index rising to 8.8 on the index. This reversed the drop to 3.9 in the month before and was well above the median forecasts.
Import prices, however, fell by 0.5% on the month which did not meet the estimates.
Looking ahead, the economic calendar today is relatively quiet. It is a bank holiday in the United States. There are not many financial reports scheduled on the day.
Crude Oil Further Advance
Pivot (invalidation): 54.20
Our preference Long positions above 54.20 with targets at 55.00 & 55.45 in extension.
Alternative scenario Below 54.20 look for further downside with 53.80 & 53.10 as targets.
Comment The RSI is mixed to bullish.
Silver Spot Bullish Bias Above 15.5200
Pivot (invalidation): 15.5200
Our preference Long positions above 15.5200 with targets at 15.6300 & 15.6800 in extension.
Alternative scenario Below 15.5200 look for further downside with 15.4700 & 15.4300 as targets.
Comment The RSI is mixed with a bullish bias.
Gold Spot Further Upside
Pivot (invalidation): 1308.00
Our preference Long positions above 1308.00 with targets at 1315.50 & 1318.00 in extension.
Alternative scenario Below 1308.00 look for further downside with 1305.00 & 1302.00 as targets.
Comment The RSI advocates for further advance.
S&P 500 Bullish Bias Above 2737.00
Pivot (invalidation): 2737.00
Our preference Long positions above 2737.00 with targets at 2762.00 & 2775.00 in extension.
Alternative scenario Below 2737.00 look for further downside with 2723.00 & 2710.00 as targets.
Comment The RSI is mixed to bullish.
DAX Consolidation In Place
Pivot (invalidation): 11190.00
Our preference Short positions below 11190.00 with targets at 11040.00 & 10970.00 in extension.
Alternative scenario Above 11190.00 look for further upside with 11315.00 & 11373.00 as targets.
Comment As Long as the resistance at 11190.00 is not surpassed, the risk of the break below 11040.00 remains high.
USD/TRY Bullish Bias Above 5.2620
Pivot (invalidation): 5.2620
Our preference Long positions above 5.2620 with targets at 5.2960 & 5.3220 in extension.
Alternative scenario Below 5.2620 look for further downside with 5.2420 & 5.2300 as targets.
Comment The RSI lacks downward momentum.
AUD/USD The Downside Prevails
Pivot (invalidation): 0.7110
Our preference Short positions below 0.7110 with targets at 0.7070 & 0.7050 in extension.
Alternative scenario Above 0.7110 look for further upside with 0.7135 & 0.7150 as targets.
Comment The RSI calls for a drop.
