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Pound Trading A Tad Higher This Morning
For the 24 hours to 23:00 GMT, the GBP rose 0.62% against the USD and closed at 1.4090 on Friday.
In the Asian session, at GMT0300, the pair is trading at 1.4095, with the GBP trading slightly higher against the USD from Friday’s close.
The pair is expected to find support at 1.4017, and a fall through could take it to the next support level of 1.3939. The pair is expected to find its first resistance at 1.4139, and a rise through could take it to the next resistance level of 1.4183.
Moving ahead, investors would look forward to UK’s Halifax house prices data for March, slated to release in a few hours.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Japan Posted A (BOP Basis) Trade Surplus In February
For the 24 hours to 23:00 GMT, the USD declined 0.22% against the JPY and closed at 106.88 on Friday.
In the Asian session, at GMT0300, the pair is trading at 106.96, with the USD trading 0.07% higher against the JPY from Friday’s close.
Data released overnight showed that Japan posted a less-than-expected (BOP basis) trade surplus of ¥188.7 billion in February, compared to a deficit of ¥666.6 billion in the previous month, while markets were expecting the nation to register a trade surplus of ¥249.70 billion.
The pair is expected to find support at 106.67, and a fall through could take it to the next support level of 106.39. The pair is expected to find its first resistance at 107.35, and a rise through could take it to the next resistance level of 107.75.
Going ahead, traders would closely monitor Japan’s flash machine tool orders for March, due to release tomorrow.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Swiss Franc Trading Lower, Ahead Of Swiss Unemployment Rate Data
For the 24 hours to 23:00 GMT, the USD declined 0.44% against the CHF and closed at 0.9586 on Friday.
In the Asian session, at GMT0300, the pair is trading at 0.9599, with the USD trading 0.14% higher against the CHF from Friday’s close.
The pair is expected to find support at 0.9569, and a fall through could take it to the next support level of 0.9539. The pair is expected to find its first resistance at 0.9639, and a rise through could take it to the next resistance level of 0.9679.
Ahead in the day, market participants would await the release of Switzerland’s unemployment rate data for March.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Canada’s Unemployment Rate Remained Unchanged In March
For the 24 hours to 23:00 GMT, the USD declined 0.09% against the CAD and closed at 1.2768 on Friday.
On the economic front, the unemployment rate in Canada remained steady at 5.8% in March, in line with market expectations. Furthermore, the nation's seasonally adjusted Ivey PMI recorded a rise to a level of 59.8 in March, after recording a level of 59.6 in the prior month.
In the Asian session, at GMT0300, the pair is trading at 1.2775, with the USD trading 0.05% higher against the CAD from Friday's close.
The pair is expected to find support at 1.2741, and a fall through could take it to the next support level of 1.2706. The pair is expected to find its first resistance at 1.2803, and a rise through could take it to the next resistance level of 1.2830.
Going ahead, market participants would keep a close watch on the Bank of Canada (BoC) business outlook survey report as well as Canada's housing starts data for March, both slated to release later in the day.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Trading A Tad Lower This Morning
For the 24 hours to 23:00 GMT, Gold rose 0.27% against the USD and closed at USD1337.00 per ounce on Friday, amid weakness in the greenback.
In the Asian session, at GMT0300, the pair is trading at 1336.4, with gold trading slightly lower against the USD from Friday’s close.
The pair is expected to find support at 1326.30, and a fall through could take it to the next support level of 1316.20. The pair is expected to find its first resistance at 1342.80, and a rise through could take it to the next resistance level of 1349.20.
The yellow metal is trading above its 20 Hr and 50 Hr moving averages.
Silver: White Metal Reverses Its Losses In The Asian Session
For the 24 hours to 23:00 GMT, Silver declined 0.12% against the USD and closed at USD16.36 per ounce on Friday, surrendering its previous session gains.
In the Asian session, at GMT0300, the pair is trading at 16.40, with silver trading 0.28% higher against the USD from Friday’s close.
The pair is expected to find support at 16.27, and a fall through could take it to the next support level of 16.14. The pair is expected to find its first resistance at 16.50, and a rise through could take it to the next resistance level of 16.61.
The white metal is trading above its 20 Hr and 50 Hr moving averages.
Crude Oil: Oil Trading On A Stronger Footing This Morning
For the 24 hours to 23:00 GMT, Crude Oil declined 1.63% against the USD and closed at USD61.97 per barrel on Friday, after fresh figures from Baker Hughes disclosed that the number of active oil rigs in the US rose by 11 to 808 in the week ended 06 April, hitting its highest level since March 2015.
In the Asian session, at GMT0300, the pair is trading at 62.24, with oil trading 0.44% higher against the USD from Friday’s close.
The pair is expected to find support at 61.47, and a fall through could take it to the next support level of 60.71. The pair is expected to find its first resistance at 63.34, and a rise through could take it to the next resistance level of 64.45.
Crude oil is trading below its 20 Hr and 50 Hr moving averages.
Traders Turned Bearish on Both Oil and Gold
CFTC Commitments of Traders
Speculators turned bearish over the energy complex in the week ended April 3. Net LENGTH for crude oil futures plunged -16 225 contracts from a week ago to 699 545. NET LENGTH of heating oil slipped -586 contracts to 14 401 while net LENGTH for gasoline slipped -1 427 contracts to 78 475. Net SHORT for natural gas added +3 344 contracts to 97 505 for the week.
Speculators were bearish over the precious metal complex last week. Net LENGTH for gold decreased -36 765 contracts to 166 589. Net SHORT for silver gained +3 308 contracts to 16 965 for the week. For PGMs, net LENGTH for platinum fell -4 296 contracts to 23 743 while that for palladium declined -1 830 contracts to 10 217.
USD won’t stay noncommittal for long, as Dollar Index breakout imminent
The forex markets is rather steady today so far. As seen in the D heatmap, most pairs are staying inside Friday's range. AUD is trading as the strongest one while JPY is the weakest. This is a reflection of risk appetite in the Asian markets, with Nikkei and HSI trading up as the week starts. USD is mixed for now, up against EUR, JPY and CHF, but down against GBP, CAD, AUD and NZD.
Movements in USD has been somewhat noncommittal recently, EUR/USD broke 1.2238 support last week but quickly recovered after hitting 1.2214. USD/CHF breached 0.9626 key fibonacci resistance but couldn't found any follow through buying. Momentum in USD/JPY was also weak even though it extended recent rebound to 107.48. AUD/USD is staying in range above 0.7642 support. The clearer movements were seen in GBP/USD's rebound after hitting 1.3982 support, but that mainly due to GBP's strength. USD/CAD's break of 1.2814 also suggests bearish reversal.
Nonetheless, we might be seen some decisive moves in USD soon. The index is now approaching medium term trend line resistance, and a breakout is likely imminent. For now, there is no sign of a trend reversal yet. And the fall from 103.82 (2017 high) is more likely to extend than not. Break of 88.25 will pave the way to 61.8% retracement of 72.69 to 130.82 at 84.58. We maintain the view that fall from 103.82 is a corrective move. And strong support is expected from 84.58/75 to contain downside and bring sustainable rebound finally.
DOW’s triangle pattern in shape
Asian markets are trading generally firmer today despite the selloff in the US on Friday. At the time of writing. Nikkei is trading up 0.65%. China's SSE is back from holiday and is up 0.35%. Hong Kong HSI is up more than 1.8%.
However, we'd like to point out that risks for deeper global market selloff remains. As we pointed out in the weekly report too, DOW's triangle pattern is in shape after Friday's selloff.
DOW's rejection from 55 day EMA, below the near term trend line, and Friday's selloff set up the pattern from 23360.29 to be a triangle consolidation pattern. Immediate focus will be back on 23360.29 this week. Overall, price actions from 26616.71 record high are seen as correcting the up trend from 2016 low at 15450.56. We'd expect deeper decline before the correction completes. And break of 23360.29 will target 38.2% retracement of 15450.56 to 26616.71 at 22351.24.
