Sample Category Title

EUR/USD

The American dollar was able to attract some interest this Monday, ending the day generally higher across the board. The EUR/USD pair peaked at 1.1020 early Asian trading, its highest for this 2017, as centrist Emmanuel Macron became the new French president. But given that such result was mostly priced in, the common currency was unable to rally on the positive news. In the macroeconomic front, data released in Europe continued to indicate a healthy economic scenario, given that German Factory Orders surged by 1.0% in March, and by 2.4% when compared to a year earlier, slightly better-than-expected. Also, the EU Sentix Investor Confidence index advanced up to 27.4 in May, beating expectations of 25.3

The dollar gathered further momentum with the US opening, backed by comments from Fed's Mester, who said that the Central Bank has already met its employment goal and is nearing its inflation goal, despite some weak recent economic data, so it should continue raising interest rates. US April labor market conditions index rose by 3.5%, following an upwardly revised 3.6% in March, becoming the two strongest readings since early 2015, and somehow reaffirming Mester's comments.

The EUR/USD pair fell to a daily low of 1.0916, bouncing back to settle around 1.0930 by the end of the US session, but short term poised to extend its decline, given that in the 4 hours chart, the price is developing below its 20 SMA, whilst technical indicators have entered negative territory although with limited bearish strength. The price is currently struggling around a major Fibonacci resistance, the 61.8% retracement of the post US-election slump, and will take either and advance beyond 1.0950 or a slide below 1.0890 to confirm directional strength this Tuesday.

Support levels:1.0950 1.0900 1.0855

Resistance levels: 1.1045 1.1080 1.1120

USD/JPY

The USD/JPY pair surged in the US afternoon to a fresh 2-month high of 113.09, after trading uneventfully around Friday's close for most of the day. The advance came as the market turned its attention to Central Banks, particularly the US Federal Reserve and chances of a June hike, revived by comments from Fed's Mester, who claimed that the economy has pretty much achieved Fed's goals. The US will release its April inflation figures this Friday, and a better-than-expected reading will support the case further for some further dollar gains. Rising US Treasury yields also backed the intraday rally, with the 10-year note benchmark up to 2.38% from previous 2.35%. The pair is gaining bullish potential ahead of the Asian opening, although further gains would need additional confirmation. In the 4 hours chart, the 100 and 200 SMAs converge around 110.70, while technical indicators have turned north, with the Momentum still within neutral territory and the RSI around 65, enough at least, to keep the downside limited. Early March lows in the 113.60 region provide a critical resistance that needs to be broken before a steeper recovery.

Support levels: 112.80 112.45 112.00

Resistance levels: 113.30 113.65 114.00

GBP/USD

The GBP/USD pair closed the day not far from a daily low of 1.2931, marginally lower after topping at 1.2988 last Friday. The pair holds near the mentioned daily high, reluctant to dollar's intraday advance. The macroeconomic calendar in the UK was extremely light, with no fresh headlines about upcoming Brexit negotiations and just the Halifax House Price index being released. According to the report, house prices in the three months to April were 3.8%, matching a year earlier reading, while when compared to March, house prices fell by 0.1%. During Asian trading hours, the British Retail Consortium will release its April retail sales measure. In the meantime, the pair presents a neutral stance according to the 4 hours chart, as the intraday decline stalled around a horizontal 20 SMA, now the immediate support, whilst technical indicators turned south within positive territory, losing downward strength near their mid-lines. The pair can fall further on a downward acceleration below 1.2890, but the trend will only be considered bearish with a move below 1.2770.

Support levels: 1.2930 1.2885 1.2850

Resistance levels: 1.2965 1.3010 1.3060

GOLD

Gold prices rallied at the beginning of the day, but were unable to hold on to gains and trimmed all of their daily gains ahead of the close. Spot settled at $1,228.19 a troy ounce, as with French elections out of the way, attention shifted back to the US and the possibility of a June rate hike. The bright metal fell in the American afternoon down to a daily low of 1,226.08, and maintains the bearish tone seen on previous updates given that the early advance was rejected on a test of the 100 DMA. Furthermore, the daily chart shows that the Momentum indicator resumed its decline after a brief upward correction, whilst the RSI indicator remains flat around 33. Shorter term, the 4 hours chart shows that the price was contained by a bearish 20 SMA, currently at 1,231.85, while technical indicators have managed to correct extreme oversold readings, but remain within bearish territory, with the RSI heading south around 34 and anticipating some further slides ahead.

Support levels: 1,225.60 1,214.10 1,203.80

Resistance levels: 1,231.85 1,242.50 1,250.90

WTI CRUDE OIL

Crude oil prices closed the day pretty much unchanged, with West Texas Intermediate futures ending at $46.40 a barrel, reverting an early slide down to 45.71. The commodity was unable to attract buyers, despite news showing OPEC and non-OPEC producers are considering extending supply cuts into 2018, as US increasing production revived concerns over a worldwide glut. The daily chart for US oil shows that technical indicators have managed to correct the extreme oversold readings reached late last week, but the RSI is currently flat around 28, while the Momentum indicator recovered within positive territory, rather indicating limited selling interest than suggesting further gains ahead. In the 4 hours chart, the commodity remained capped by a bearish 20 SMA, while technical indicators also corrected oversold conditions but remain within bearish territory, in line with the longer term perspective. The commodity remains vulnerable, with chances of a dip down to the 42.00/42.50 region later this week.

Support levels: 45.90 45.30 44.70

Resistance levels: 47.10 47.75 48.50

DJIA

Wall Street closed little changed after a dull trading session, with the DJIA up 5 points, to 21,012.28, and the Nasdaq Composite advancing 2 points, to 6,102.66. The S&P ended the day unchanged at 2,399.38, holding near record highs set last week. Within the Dow, Apple was the best performer, adding 2.71%, followed by Exxon Mobil that managed to advance 1.05%. El du Pont remains among the worst performers this month, leading decliners with a 1.10% loss, followed by Goldman Sachs that shed 0.86%. The technical picture hasn't changed, with the benchmark still confined to a tight range daily basis, and neutral-to-bullish, as in the daily chart, it holds above a bullish 20 DMA, whilst technical indicators hold well above their mid-lines, lacking clear directional strength. In the 4 hours chart, intraday slides were reverted on approaches to a still bullish 20 SMA, whilst technical indicators also stand pat within positive territory.

Support levels: 20,986 20,939 20,898

Resistance levels: 21,030 21,071 21,138

FTSE100

The FTSE 100 added 3 points, closing at 7,300.86, despite the sour tone of the leading mining sector. A weaker Pound partially offset losses in the sector, which fell on news that Chinese imports rose by less than expected in April, spurring concerns of base metals' demand. Anglo American suffered the most, leading decliners with a 2.04% loss, followed by Antofagasta that shed 2.02%. Intu Properties was the best performer, advancing 2.15% after housing data released earlier on the day showed steady growth in prices. Daily basis, the index presents a neutral-to-bullish stance as despite holding above its moving averages, technical indicators are flat around their mid-lines, indicating the absence of demand. In the 4 hours chart, the index was unable to surpass its 200 SMA, holding around it, whilst indicators remain within positive territory, but also lacking upward strength.

Support levels: 7,284 7,247 7,200

Resistance levels: 7,332 7,385 7,439

DAX

European equities closed the day generally lower, with the German DAX settling at 12,694.55, down by 0.18% or 22 points, with base metal-related equities leading the way lower after Chinese trade balance showed that the world's second largest economy reduced its buying to the slowest pace in six months. Equities briefly rallied at the opening on Macron's victory, but gains were quickly reverted. Within the DAX, only 8 members managed to close with gains, with Deutsche Lufthansa being the best performer, up 3.47%. Commerzbank led decliners, ending the day 3.28% lower, followed by Linde that shed 2.17%. Daily basis, the index remains near record highs and above all of its moving averages that retain their bullish slopes, whilst technical indicators have barely retreated within overbought levels, limiting the risk of a steeper decline. Shorter term, and according to the 4 hour chart, the downward potential is also limited, with the price remains well above a bullish 20 SMA as technical indicators retreated from overbought levels, but lost downward strength well above their mid-lines.

Support levels: 12,668 12,623 12,575

Resistance levels: 12,720 12,765 12,812

The Aussie dollar remains in strong bearish mode and posted new four-month low at 0.7333 on Tuesday on strong bearish acceleration after disappointing Australian Retail Sales data for March. Markets are awaiting release of Australian budget data which may have stronger impact on the pair.

Bears found temporary footstep just ahead of strong support at 0.7329 (weekly cloud base) and may show stronger hesitation here as daily studies are oversold, but no firmer bullish signal seen so far.

Falling daily Tenkan-sen/10SMA offer strong resistances at 0.7445 which is expected to cap extended corrective upticks.

Close below cracked 0.7384 support (Fibo 61.8% of 0.7159/0.7747 ascend) which so far resisted several attacks, is needed to confirm bearish stance. Eventual break below weekly cloud base would expose target at 0.7298 (Fibo 76.4% of 0.7159/0.7747) and risk extension towards key med-term support at 0.7159 base (posted on end of Dec 2016).

Res: 0.7366, 0.7396, 0.7428, 0.7445
Sup: 0.7329, 0.7301, 0.7286, 0.7250

The Australian dollar which closed on a bearish note yesterday was seen extending the declines earlier today, following the release of the monthly retail sales report. Data from the Australian Bureau of Statistics showed that retail sales by turnover fell 0.1% on a seasonally adjusted basis in March 2017, marking the second month of declines. However, compared to a year ago, retail sales turnover rose 2.5%.

Later in the day, the Annual budget will be released by the Turnbull administration for the 2017 - 2018 fiscal year. Although the Australian dollar isn't expected to react much, the budget release will, however, garner attention from ratings agencies.
Besides the budget release, other economic releases for the day include German industrial production and Canada's building permits.

EURUSD intra-day analysis

EURUSD (1.0930): EURUSD fell sharply off the session highs near 1.1000 as expected and mentioned in yesterday's commentary. The declines came about in a widely expected result from the French elections that were held on Sunday.

After closing at the day's lows near 1.0923, EURUSD could be seen attempting to retrace some of the declines, but watch for resistance that could develop near 1.0950. Failure to break out above 1.0950 will signal further declines down to 1.0863 - 1.0854.

The 4-hour Stochastics, however, is in the process of printing a hidden bullish divergence with a lower low against the current higher low in price. This could mean that EURUSD could be attempting to break out higher, which will be validated above 1.0950.

GBPUSD intra-day analysis

GBPUSD (1.2953): The British pound was bearish yesterday, but price action was seen to be trading rather tight. The very gradual rally in prices following the bullish flag pattern is signaling that perhaps price action could be looking at a decline in the near term.

This view is somewhat validated by the still evolving rising wedge pattern near the top at 1.2965 - 1.2988. A reversal at this level will very likely confirm the downside in GBPUSD, although the immediate support at 1.2900 will have to be breached to confirm the downside towards 1.2600.

XAUUSD intra-day analysis

XAUUSD (1227.87): Gold prices continued to linger near the 2-month lows at 1220.00 levels. Price action formed an outside bar yesterday keeping the bias fairly neutral at this point, but with a risk of a correction towards 1250.00 handle.

The short-term resistance at 1234.00 remains in sight with further gains seen coming only on a breakout above this level, which will push gold towards the 1250.00 handle where resistance can be established. To the downside, the breakout from the outside bar will signal a move towards 1200.00. With lack of any clear short-term fundamentals, gold prices are likely to remain muted.

The Dollar index saw a rebound with strong bullish momentum on Monday after hitting a 6-month low of 98.40 last Friday. This morning, during the European session, the dollar index bulls have recovered the significant resistance level at 99.00. USD/JPY hit a high of 113.68, last seen on March 15.

The dollar index has given up most of the post US presidential election gain. Per the CFTC data (Commodity Futures Trading Commission, the week ending May 2), the number of dollar long positions have dropped to the lowest level since October 2016.

Last Thursday the US Congress has finally passed the replacement of the Obamacare bill with the American Healthcare Act. Even though it was passed by a narrow majority it symbolises Trump's first victory since taking office which has lifted market confidence in Trump's administration to an extent.

There are several Fed presidents scheduled to make speeches this week. Boston Fed president Rosengren (non-voter) and Dallas Fed president Kaplan (voter) will speak on Tuesday with Chicago Fed president Evans (voter) speaking on Wednesday. The outcome of the French election has eased the Fed policymakers' concerns about the impacts on the US economy from the Eurozone turmoil after Le Pen's presidency. Per the CME's FedWatch tool, the probability for a rate hike in June has increased to 87.7%.

On Monday two Fed officials made speeches. FOMC member Mester said 'the Fed should raise rates twice more until the end of the year, to prevent economic overheating'. St. Louis Fed president Bullard stated that 'as the Qi GDP figure was weak, and inflation was soft, the Fed is likely to raise rates once by the end of the year, instead of twice'. However, the two Fed officials are both non-voters this year and their comments have limited impacts on markets.

EUR/USD retraced on Monday from a 6-month high of 1.1021 due to profit-taking after the French presidential election and the dollar rebound. ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST on Wednesday May 10.

Be aware of any comments on economic outlook or hints of possible gradual removal of QE.

Daily Pivots: (S1) 1.4743; (P) 1.4804; (R1) 1.4848; More...

Intraday bias in EUR/AUD remains on the upside for next medium term fibonacci level at 1.5455. On the downside, touching 1.4649 minor support will turn bias neutral and bring consolidation. But retreat should be contained by 1.4442 support and bring rise resumption.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction should be completed after defending 1.3671 key support. Rise from 1.3642 is now expected to target 61.8% retracement of 1.6587 to 1.3624 at 1.5455 and above. In any case, outlook will now stay cautiously bullish as long as 1.4309 resistance turned support holds.

The pair took out barrier at 113.38 (50% retracement of 118.65/108.11) on extension of bullish acceleration that commenced on Monday and resulted in eventual close above daily cloud and 100 SMA (112.79/113.09).

Fresh bulls that emerged from two-day consolidation within daily cloud are looking for next target at 113.75 (Fibo 76.4% of 115.49/108.11) and may extend towards psychological barrier at 114.00.

Slow stochastic is strongly overbought on daily chart but continues to move north, suggesting corrective action in the near-term.

Broken daily cloud top (currently at 112.79) and broken bear-trendline off 118.59 peak (at 112.74) offer strong supports which are expected to ideally contain corrective dips.

Res: 113.75, 114.00, 114.50, 114.87
Sup: 113.09, 112.79, 112.74, 112.32

Daily Pivots: (S1) 0.8420; (P) 0.8452; (R1) 0.8472; More...

EUR/GBP is staying in range of 0.8404/8529 and intraday bias remains neutral. On the downside, below 0.8404 will turn focus back to 0.8303 low. Break there will extend the whole corrective pattern from 0.9304. In that case, we'd expect strong support from 0.8116 to contain downside and bring rebound. On the upside, above 0.8529 will resume the rebound from 0.8312 towards 0.8786 resistance. Overall, there is no change in the view that price action from 0.9304 are forming a corrective pattern. Such pattern would extend in near term.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. In case of deeper fall, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Rise from 0.6935 (2015 low) will resume at a later stage to 0.9799 (2008 high). However, sustained break of 0.8116 could bring deeper decline to next key support level at 0.7564 before the correction completes.

Daily Pivots: (S1) 145.90; (P) 146.28; (R1) 146.92; More....

GBP/JPY's rally continues today and reaches as high as 147.27 so far. Intraday bias remains on the upside. Rise from 122.36 should be resuming. Further rally should be seen through 148.20 to 150.42 fibonacci level.. Further break there will target 100% projection of 122.36 to 148.42 from 135.58 at 161.64. On the downside, below 145.64 minor support will turn bias neutral and bring consolidation before staging another rise.

In the bigger picture, based on current momentum, rise from 122.36 bottom should be developing into a medium term move. Break of 38.2% retracement of 195.86 to 122.36 at 150.42 should pave the way to 61.8% retracement at 167.78. This will now be the favored case as long as 135.58 support holds.

Cable is making a strong rise away from 1.2364 level, clearly in impulsive fashion which can see an extension up to 1.300-1.3040 area for wave C. That said, recently price has been trading in a correction of a higher degree, wave 4 which is as of current rally completed. As such wave 4 was completed at the 1.2830 level and current recovery is final wave 5. That said, the ideal reversal zone for wave 5 may be around the Fibonacci ratio of 100.0, where distance traveled of waves 1 and 5 comes in play. After wave five finds a top, we can a expect a minimum three wave decline towards the region of a former wave 4).

GBPUSD, 4H

Daily Pivots: (S1) 122.95; (P) 123.72; (R1) 124.45; More...

EUR/JPY is staying above 122.92 minor support and recovered. Further rise is still expected in the cross. Firm break of 124.08 resistance will confirm resumption of whole rise from 109.20. In that case, EUR/JPY would target 126.09 resistance first. Break there will pave the way to 100% projection of 109.03 to 124.08 from 114.84 at 129.89. On the downside, below 122.92 minor support will turn bias to the downside and bring pull back.

In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.