Sample Category Title

Daily Pivots: (S1) 0.9908; (P) 0.9943; (R1) 0.9993; More.....

With 0.9999 minor resistance intact, intraday bias in USD/CHF remains on the downside for 0.9812 support and below. Fall from 1.0342 is seen as a correction. Hence, we'll look for bottoming signal below 0.9812. Meanwhile, on the upside, above 0.9999 minor resistance will turn bias back to the upside for 1.0107 resistance instead.

In the bigger picture, we're still maintaining that firm break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the cross. However, the corrective nature of the fall from 1.0342 is starting to give the medium term outlook a bullish favor. Hence, in stead of looking for topping signal around 1.0342, we'd now pay closer attention to upside acceleration as USD/CHF approaches this level again.

Daily Pivots: (S1) 109.42; (P) 110.00; (R1) 110.34; More....

USD/JPY's rebound from 108.12 is still in progress and intraday bias stays on the upside for 111.58 support turned resistance. Considering bullish convergence in 4 hour MACD, sustained break of 111.58 will argue that fall from 118.65 is merely a corrective move and has completed. Outlook will then be turned bullish for 115.49 resistance and above. Meanwhile, below 108.87 minor support will turn bias to the downside and extend the whole decline from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. Current development suggests that it's not completed yet and is extending. In case of deeper decline, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

Daily Pivots: (S1) 0.7543; (P) 0.7563; (R1) 0.7589; More...

Intraday bias in AUD/USD is mildly on the upside for 0.7609 resistance. Break will indicate resumption of rise from 0.7472 and target 0.7748 high. That will also argue that whole rally from 0.7158 is resuming and put 0.7849 key resistance fibonacci level in focus. On the downside, below 0.7490 will now likely send AUD/USD through 0.7472 low.

In the bigger picture, we're still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8144) and above.

Daily Pivots: (S1) 1.3432; (P) 1.3476; (R1) 1.3543; More....

USD/CAD's rally extends after brief retreat and drew support from 4 hour 55 EMA. The break of 1.3543 resistance confirms resumption of rise from 1.2968. Intraday bias stays on the upside for 1.3598. Firm break there will resume whole rally from 1.2460 to next medium term fibonacci level at 1.3838. On the downside, break of 1.3410 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg from 1.2460 is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We'd look for reversal signal there to start the third leg. However, break of 1.2968 will argue that the third leg has already started and should at least bring a retest of 1.2460 low. Meanwhile, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

The global financial markets were blessed by centrist Emmanuel Macron's win in the first round of French presidential election. CAC 40 gained 4.14% yesterday to close at 9 year high at 5268.85. DAX rose 3.37% to close at record high at 12454.98. In particular, CAC took out prior resistance at 5142.81 by a margin. DAX's break of prior resistance at 12390.75 was also solid. US indices followed with NASDAQ closing at record high at 5983.82, up 1.24%. DJIA and S&P 500 rose 1.05% and 1.08% resistance but are both kept well below recent highs so far. Asian equities follow with Nikkei trading back above 19000 handle.

In treasury markets, French-German yield spread narrowed sharply. As yields on OATs, 10 year French government debt, dropped 7.7 basis point to 0.849%. Spread with German bund yields narrowed to 49.80 basis points, down from around 75 basis points, and hit the lowest level since December. In US, 10 year yield hit as high as 2.313 overnight but pared back much gains to close at 2.273%. There were revived expectations of Fed hike in June. Fed fund futures are now pricing in 66.1% chance of a hike in June, and it was below 50% last week. But judging from the reactions in 10 year yield, markets are still not too convinced about that yet.

Trump to corporate tax rate to 15%

The outlook of Fed rate, yields and Dollar will largely depend on what US President Donald Trump will deliver this Wednesday regarding his tax reforms. It's reported that Trump would seek to lower corporate income tax rate to 15%, down from 35%. Meanwhile, individual tax rate could be capped at 33%. However, there are talks that such a plan would set up clashes with Republicans as some of them would oppose to raising the country's debt. The outline of the plan itself would be the first test for Dollar. And the execution of the plan, including parliamentary approval, will be another test.

Le Pen steps down as National Front leader

Going back to Europe, far right French presidential candidate Marine Le Pen announced that she is stepping down as leader of the National Front party, just after the first round of election. This is seen by analysts as an act to reach out to non National Front supporters. Currently polls suggest that Macron will beat Le Pen in the Run off on May 7 by 62-38. The poll results has been rather steady since March.

Brexit: EU toughens stance on financial services and citizen rights

Regarding Brexit, it's reported that in the latest draft of EU negotiation plan, financial services was split off from wordings on the trade deal. And, "any future framework should safeguard financial stability in the Union and respect its regulatory and supervisory standards regime and application." That was believed to be in response to France's request to separate financial services with trade. Meanwhile, EU would push for reciprocal guarantees to give EU citizens in UK, and UK citizens in EU, to acquire permanent residence after a continuous period of five years. EU will approve the negotiation guidelines and plans on April 29 but will wait until UK elections in June to start formal negotiations.

On the data front

Japan corporate service price index rose 0.8% yoy in March. UK will release public sector net borrowing in European session. US will release house price indices, new home sales and consumer confidence later in the day.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.3432; (P) 1.3476; (R1) 1.3543; More....

USD/CAD's rally extends after brief retreat and drew support from 4 hour 55 EMA. The break of 1.3543 resistance confirms resumption of rise from 1.2968. Intraday bias stays on the upside for 1.3598. Firm break there will resume whole rally from 1.2460 to next medium term fibonacci level at 1.3838. On the downside, break of 1.3410 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg from 1.2460 is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We'd look for reversal signal there to start the third leg. However, break of 1.2968 will argue that the third leg has already started and should at least bring a retest of 1.2460 low. Meanwhile, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

Economic Indicators Update

Global Markets:

• Asian stock markets: Nikkei up 0.80 %, Shanghai Composite gained 0.40 %, Hang Seng rose 1.00 %, ASX 200 closed for holiday
• Commodities: Gold at $1275 (-0.20 %), Silver at $17.95 (+0.15 %), WTI Oil at $49.50 (+0.50 %), Brent Oil at $52.40 (+0.55 %)
• Rates: US 10-year yield at 2.28, UK 10-year yield at 1.05, German 10-year yield at 0.33

News & Data:

• Japan Services PPI (Mar): 0.80% (est 0.70%, prev 0.80%)
• Asia stocks rise, euro steady as relief from French vote buoys sentiment – RTRS
• Oil edges up after six days of straight losses – RTRS
• Euro pauses after rally, Canadian dollar hit by U.S. duties on lumber – RTRS

Markets Update:

Asian stock markets rose overnight, led by gains in the Nikkei. The outcome of the first round of the French election and US President Trump's announcement regarding his tax reform have kept stocks bid. Australian and New Zealand markets were closed for a holiday.

In the currency market, the largest moves overnight were seen in the CAD pairs. The Canadian Dollar came under pressure after the US announced it will impose a tax on Canadian lumber imports. USD/CAD rallied to a high of 1.3560 and could approach 1.36 resistance soon. While the pair looks a bit overbought in the short-term, 1.36 is an important level. If it breaks above it, further gains towards 1.38 seem likely.

Price action in the other major pairs was rather quiet. EUR/USD and GBP/USD consolidated in tight ranges. USD/JPY rose slightly after the Tokyo open, underpinned by the rally in stock markets. AUD/USD traded 0.7550-70 in Asia, while the New Zealand Dollar came a bit under pressure. It fell from 0.7015 to a low of 0.6985.

Upcoming Events:

• 15:00 GMT – US New Home Sales
• 15:00 GMT – US Richmond Manufacturing Index

EUR/USD

The Euro welcomed the victory of centrist candidate Emmanuel Macron on the first round of French presidential election and gapped higher around two hundred pips against the dollar on Monday's market opening. EURUSD surged on relief from fears of Frexit scenario on victory of anti-EU candidate Marine Le Pen. Macron took 23.8% of the votes on the first round of election while Le Pen was the second with 21.7% votes and these two candidates are going to the final round.

Polls show strong advantage of Macron and expect his victory by 20 percentage points.

The Euro surged to fresh 5 ½ month high against dollar at 1.0916 in early Monday's trading but eased back around hundred pips and stayed within 1.0820/77 consolidation during the most of Monday's trading.

The pair remained supported by 200SMA at 1.0835, as probe below was short-lived and contained by weekly Kijun-sen line at 1.0820.

Firm bearish setup of daily studies continues to support, as freshly-formed daily Tenkan-sen / Kijun-sen bull-cross underpinning.

Close above 200SMA is needveled to maintain immediate bullish bias for fresh upside, as regain of 1.0916 high would signal extension towards psychological 1.1000 barrier.

Conversely, close below 200Sma would signal deeper correction, the picture is exected to remain bullishly aligned while today's gap remains unfilled.

Support: 1.0835, 1.0820, 1.0777, 1.0752
Resistance: 1.0877, 1.0916, 1.0950, 1.1000

USD/JPY

USDJPY pair opened with gap higher on Monday, boosted by fresh risk appetite that prompted traders out of safe haven yen longs and pushed the dollar higher. Fresh strength spiked at 110.52, where rally was capped by falling Kijun-sen and reversed below cracked psychological 110.00 level. Near-term bias is turning higher after pivotal barriers at 110.00/25 were dented, however, daily close above these levels (reinforced by 20SMA) is needed to generate stronger bullish signal for extended recovery from 108.11 low and possible full retracement of 111.57/108.11 descend.

Dips from fresh high at 110.52 were so far contained by strong supports at 109.84/70 (top of thick 4-hr chart / 4-hr Tenkan-sen) and while these supports hold, fresh upside attempts will remain in play.

Otherwise, break lower would risk further easing and filling Monday's gap that would weaken near-term structure again and risk further downside.

Next key support lies at 108.92 (200SMA), guarding 108.11 (Apr 17 low).

Support: 109.70, 109.43, 108.92, 108.71
Resistance: 110.00, 110.25, 110.52, 110.76

GBP/USD

GBPUSD remained in red on Monday, despite being dragged by Euro's rally to the session high at 1.2837, as gains proved to be short-lived. However, the pair remains within near-term consolidation range between 1.2859 and 1.2775, where easing from last week's multi-month high at 1.2905 was contained by Fibonacci 38.2% retracement of 1.2814/1.2905 rally.

No clear direction is seen while the pair holds within consolidation range, however, risk of deeper pullback exists on bearish signal generated on reversal of daily RSI / slow stochastic from overbought territory.

Firm break below 1.2755 handle would risk extension to 1.2700 support, reinforced by rising daily Tenkan-sen line and 1.2663 (Fibonacci 61.8% retracement of 1.2814/1.2905 upleg). To neutralize downside risk and shift near-term focus higher, sustained break above 1.2859 pivot is needed.

Support: 1.2770, 1.2755, 1.2700, 1.2653
Resistance: 1.2837, 1.2859, 1.2905, 3000

AUDUSD

The AUDUSD pair is on track for daily close in red after spiking to 0.7584 on gap-higher opening, but was unable to hold gains despite repeated attempt towards the daily high.

However, overall structure is expected to remain biased higher on daily close above 200SMA at 0.7550, which was taken out on Monday's gap-higher opening.

While the price is holding above 0.7550, fresh upside attempts could be anticipated, with break above day's high at 0.7584, needed to open key near-term barrier at 0.7610 (top of thick daily Ichimoku cloud, reinforced by Kijun-sen line) also former high of Apr17.

Alternatively, loss of strong supports at 0.7550/41 (200SMA / daily Tenkan-sen) would weaken near-term structure and signal recovery stall.

Support: 0.7550, 0.7537, 0.7518, 0.7491
Resistance: 0.7565, 0.7584, 0.7596, 0.7610

GBPCAD

The GBPCAD cross remains firm and consolidating under last week's fresh high at 1.7340 (the highest since mid-Sep 2016), with long-tailed candles of past two days, signalling strong downside rejections and continuing to underpin the action.

Strong bulls on daily chart are supportive for further upside and ignoring for now overbought conditions. The pair may extend to 1.7524/42 (highs of Sep 11 / July 31 2016 respectively) on fresh bullish acceleration through recent high at 1.7340, however, risk of corrective easing should be anticipated, despite lack of firmer bearish signals for now.

Broken weekly Ichimoku cloud base offers solid support at 1.7078, which is expected to ideally contain corrective dips.

Support: 1.7200, 1.7167, 1.7145, 1.7078
Resistance: 1.7306, 1.7340, 1.7436, 1.7524

GOLD

Spot Gold opened with gap-lower on Monday, pressured by renewed risk appetite that moved traders' bets from safe haven instruments to riskier assets. Gold price spiked to $1265 low on Monday (rising 20SMA), after opening lower for $10, but managed to recover most of day's losses on return to $1275, former strong support (Fibonacci 38.2% of $1239/$1295 rally, reinforced by rising daily Tenkan-sen line).

Long-tailed Monday's daily candle that signalled downside rejection and swift recovery, underpins near-term action which needs close above $1275 zone for fresh bullish signal and attempts to fill Monday's gap.

Such scenario would turn near-term focus higher and signal an end of corrective phase from $1295 peak.

Otherwise, downside is expected to remain vulnerable while the price holds below $1275 pivot.

Support: 1272, 1265, 1261, 1258
Resistance: 1277, 1284, 1288, 1292

WTI CRUDE OIL

WTI crude oil extended losses further on Monday, being in red for the sixth consecutive day, as investors are not sure whether OPEC would seek to extend the current deal to curb global supply amid rising levels of U.S. shale oil production. Oil price fell to fresh nearly one-month low at $49.05 on Monday, coming ticks ahead of strong support at $48.99 (200SMA), after strong bearish signal was generated on last Friday's break and close below psychological $50.00 support.

Long bearish candle of last week weighs heavily at near-tem action for final break below 200SMA ($48.99) and weekly Kijun-sen line at $48.70 that would open way towards key support – higher base at $47.07.

Meantime, corrective attempts could be expected on oversold daily slow stochastic, with solid barriers at $50.40 (broken daily Kijun-sen) and $50.74 (daily Ichimoku cloud base) expected to cap.

Support: 49.05, 48.99, 48.70, 48.37
Resistance: 50.00, 50.17, 50.40, 50.74

DJIA

Stocks were higher on Monday on renewed demand for risk assets and dragged Dow Jones index higher to eventually break above 20SMA (currently at 20552) which capped the action of past five days.

Gap-higher opening on Monday and subsequent bullish acceleration is pressuring key barrier at 20738 (top of thick daily Ichimoku cloud, also 50% of entire 21160/20310 pullback) to signal further recovery on close above the cloud.

Technical studies show daily MA's turning into full bullish setup and fresh momentum seen on break above the midline that favors further recovery.

However, hesitation at strong 20738 barrier could be expected as slow stochastic entered overbought zone on daily chart. Daily 55SMA which holds Monday's action at 20630 marks initial support, with extended dips to be contained above 20SMA to keep fresh bulls in play.

Support: 20669, 20630, 20552, 20442
Resistance: 20738, 20835, 20916, 20959

FTSE100

FTSE index rallied strongly on Monday and retraced 76.4% of last week's sharp fall, on biggest one-day gain since Mar 1. Strong bullish acceleration that was sparked week's opening with gap higher, penetrated into daily Ichimoku cloud and closed above cloud base. Fresh bullish sentiment that was established on today's strong recovery rally is eyeing immediate barrier at 7238 (daily Kijun-sen), break of which would open way towards daily cloud top at 7273 and signal full retracement of 7285/7032 fall, sparked by announcement of early election in the UK.

Technical studies on daily chart are supportive, as RSI and slow stochastic reversed from oversold territory and show a plenty of room at the upside.

Broken daily Tenkan-sen ant 7189 and 100 SMA at 7149 offers solid supports which are expected to keep the downside protected.

Support: 7189, 7149, 7129, 7086
Resistance: 7224, 7238, 7273, 7285

DAX

DAX surged after opening with over 200 points gap-higher on Monday and hit fresh all-time high at 12502. Strong rally in stocks came on relief on victory of Emmanuel Macron on the first round of French election that neutralized persisting fears in the markets of further destabilization of the EU on Frexit scenario. Monday's rally marked the biggest one-day f=gains since Mar 1, as the price spiked to fresh record high and entered into uncharted territory.

Firm bullish structure of technical studies on larger timeframes and today's close above former record high at 12410, suggest further advance that is also expected to be driven by fresh bullish sentiment. Dax will be looking for projected level at 12581 and 12687 (Fibonacci 1382% and 161.8% projection of the upleg from 11962), with shallow corrective dips expected to hold above 12300 handle.

Support: 12400, 12300, 12232, 12168
Resistance: 12502, 1581, 12687, 12858

STOCKS

Results of the first round of French elections have brought in hopes to the investors throughout the world except China. Macron would face off with Le Pen for the second round on 7th May but the stocks could see some upside before that. .

Dow (20763.89, +1.05%) has risen well from levels above 20400 but could test immediate resistance near 21050-21200 levels from where a short dip is possible.

Dax (12454.98, +3.37%) opened with a gap up and shot up to close at the day's high of 12454 yesterday breaking above the apr'15 high of 12391. There is a fair chance of testing 12540 today before a pause is seen.

Shanghai (3132.93, + 0.11%) is the only weak performer amongst the other Asian indices. It has broken below the weekly support trend lines and for now only the 3-day support near 3100-3080 is visible which gives some hope of recovery in the medium term. Else an initiation of a sharp fall is possible for the longer term.

Nikkei (19034.74. +0.84%) has been pulled up buy a weaker Yen since the last 2-sessions. Either the index moves up to test 19800 before coming off from there or comes off immediately from current levels. We prefer some more upside while the global indices are moving up on the favored French election results.

Nifty (9217.95, +1.08%) has some scope of testing 9300-9400 levels before seeing a sharp corrective fall from there. A rise yesterday has proved the support near 9100 to be holding well for now. In case this continues, we could see an attempt to rise towards 9300 in the near term.

COMMODITIES

Gold (1275) moved little during the session as it closed near the midpoint of our expected range of 1260-1305. As stated before, the sideways consolidation is expected to continue. We have been expecting 1260 for gold to hold for some time as buyers are taking every dip as a further opportunity for buying. 1301 could be a level where the price action has to be checked to assess the chances of further bounce to 1328 to 1350 levels.

Silver (17.87) had also moved lower till 17.54 but managed to close above its crucial support of 17.60-70 levels. Immediate trading range could be 17.60-18.35. We think that the corrective phase could be restricted till 17.60-70 levels due to near term oversold condition.

Copper (2.54) has been stuck in the range of 2.50-2.67. A close below 2.50 could open up 2.48 and 2.45 levels respectively. Only above 2.67, higher resistances of 2.72 -80 can come into consideration.

Brent (51.90) and WTI (50.27) both had moved lower in line with our expectation. They are within their trading ranges of 50.09-52.15 and 50.25-51.70 respectively. Brent may consolidate within these levels for few more sessions though the possibility of a decline towards supports can't be ruled out. A close below 50.20 could drag WTI towards 48.36 levels. We will remain bearish while Brent and WTI are trading below 53.60 and 51.70 levels respectively.

FOREX

Anxiety over the French elections fading, the focus now turns to the Trump's plans to be unfolded tomorrow, 25th April. The impact of the Trump-plans can move Dollar sharply in the near term.

Dollar Index (99.13) is trading quietly near the very significant support of 98.90-50 (modified) from where it can still bounce very sharply. The chances of a major reversal from the current levels must be considered despite the prevailing downtrend. As discussed yesterday, the initial signs of a larger degree correction coming to an end are visible, though pending confirmation.

Euro (1.0851) is stable at the higher levels but the maximum upside may be limited to 1.0930-50, though even these levels may not be revisited in the near term. A gradual decline to 1.0700 or lower looks the more likely option.

Pound (1.2779) has been one of the most stable majors in the last few sessions and it may continue its sideways consolidation in the range of 1.2750-1.2900 with a bearish bias. The chances of a retest of 1.2600 in the coming days can't be ruled out.

Dollar-Yen (110.04) has been struggling around the resistance of 110.10 in line with our expectations but the demand near the immediate support of 109.40-25 has brightened the chances of seeing 111.50-112.00 in the next 2-4 sessions.

Aussie (0.7557) remains absolute quiet as the Australian markets are closed today. Expect the sideways trading in 0.7450-0.7600 to continue for the next week.

Dollar-Rupee (64.44) keeps oscillating in the range of 64.20-70. Immediate minor support comes at 64.40 from where it may bounce back to 64.60 once again but the broader oscillation in the range of 64.20-70 is expected to continue.

INTEREST RATES

Sharp rise in the German yields seen in the last 2-sessions on the Fresnch election reulsts. The 5Yr (-0.35%) and the 30Yr (1.07%) is up from -0.33% and 1.06% respectively while the 10Yr (0.334% is down from 0.3525. There is some more room on the upside for the yields to rise before testing the medium term resistance levels. Near term looks bullish.

The UK yields have fallen slightly yesterday but overall look bullish for the near term. The 5Yr (0.50%), 10yr (1.06%) and the 20YR (1.61%) are down from 0.552%, 1.111% and 1.655 respectively.

The German-US 2Yr (-1.93%) and the 10Yr (-1.94%) have broken above crucial resistances to move up sharply in the medium term. We will have to see if the resistance near 1.10 on Euro is able to bring down the yield spreads in the near term.

The euro peaked early and faded as we anticipated in yesterday's IMT, we look at what's next. The euro was the top performer Monday while the Japanese yen lagged. Australia and New Zealand are on holiday Tuesday.There are currently 8 Premium Trades in progress; 4 in FX, 2 in indices and 2 in commodities.

The question we're asking ourselves now is whether the French election result was a one-day event or the start of something more durable. The close in EUR/USD was 1.0866, that's the best since November.

What's worrisome is that all the euro charts have eaten into the opening gaps. That's a technical red flag. It suggests a quick squeeze or a fast money trade rather than a sea change in sentiment. At the same time, some consolidation is normal.

Ultimately, the market is more political than it's been in a generation. At the moment, the political temperature is cooling off but it can shift quickly. Ignoring politics, the eurozone economy is showing some bright spots and EUR/USD is at a deeply depressed level. Like sterling, it won't take much to get it moving to the upside. Will the ECB and Eurozone CPI later magnify or break momentum?

The election is also a reminder of the factor that fear plays in trading. Markets are an amazing method of price discovery but add a bit of fear into the equation and prices quickly disconnect from reality. The current era of political shifts will lead to many bouts of fear and not all of them will be unjustified but if we look back at Brexit, Trump and the French election, the fears have been exaggerated at times in each case.

Oil continued its downward grind overnight as gold recovered some of its losses as President Trump’s first 100-days draws to a close.

OIL

Oil continued its bullish unwind overnight, with both Brent and WTI spot contracts down just over 0.50%. Rising shale production and uncertainty over the OPEC deal extension being quoted as reasons for the fall. We continue to feel the primary cause is excessive short –term long positioning unwinding. In other words, the issues mentioned are known unknowns.

Nevertheless, in the bigger picture, both reasons are relevant. These should ensure any meaningful rallies in oil will be capped until the late May decision date.

Both Brent spot and WTI spot have closed opened in Asia near the previous session’s lows. Brent spot trades at 51.70 with support nearby at 51.30 and then its 200-day average at 50.80 followed by the 50.00 level. Resistance sits at 52.50 and 53.50.

WTI spot trades at 49.00, just above its 200-day average at 48.65, a break opening up a move to 47.00. Resistance sits at 50.00 and 51.00 a barrel.

GOLD

Gold recovered some of its post-election sell-off overnight to open roughly mid-range at 1278 this morning in Asia. With the election fading from memory rapidly the market now turns its attentions to President Trump’s legislative agenda.

Although news of a 15% corporate tax rate will no doubt be warmly received, the worries over a potential U.S. government shutdown seem to be taking precedence in traders’ minds. This has probably been gently supportive of gold overnight. We expect this issue to be more of a storm in a teacup given the soothing noises from Republican leaders this week.

Gold itself, however, is still not a rosy picture technically with the potential of a decent downside correction if and when uncertainty fades. Gold has resistance at 1290 and then 1296, having failed in this area numerous times last week. Below, support lies at 1265.50 and then the 200-day average at 1254.80. A daily close below 1240 would signal a much larger correction could be on the way.