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EUR/USD

The unwind of the 'Trump trade' gathered momentum this Monday, resulting in the EUR/USD pair rallying to a fresh yearly high of 1.0905 at the beginning of the US session. Risk aversion dominated the Asian and European sessions, after the US GOP decided to pull out the healthcare bill  set to overhaul the Obamacare late Friday.  Speculative interest is now wondering if the US new administration will be able to push forward its pro-growth agenda, promised during the campaign.

The common currency gapped lower at the weekly opening, further rallying after London's opening after the release of a better-than-expected German IFO confidence survey, which showed that than business sentiment unexpectedly improved in March, up to 112.3 from a previous 111.1, the highest reading since mid 2011. The US released a minor report, the Dallas Fed manufacturing index, which fell in March to 16.9 from previous 24.5, while a  Fed's Evan hit the wires, adding nothing new on monetary policy to what the market already knew.

The dollar recovered some ground in the US afternoon as Wall Street bounced from fresh six-week lows, but overall remains subdued, and at risk of falling further. The 4 hours chart for the EUR/USD pair shows that the price is well above the 1.0820/30 region, the 50% retracement of the post-US election's decline and former yearly high, while the 20 SMA keeps advancing below it. Technical indicators in the mentioned chart have lost upward strength, pulling modestly lower within overall readings, not enough to suggest further declines ahead. Buying interest is likely waiting in the mentioned 1.0820/30 region, although a break below it could result in a slide down to 1.0790, where the pair will fill the weekly opening gap.

Support levels: 1.0765 1.0730 1.0700

Resistance levels: 1.0830 1.0870 1.0910

USD/JPY

The USD/JPY pair tumbled to a fresh yearly low of 110.10 this Monday, undermined by a continued decline in worldwide equities that fueled demand for the safe-haven yen. Trump's defeat on his healthcare bill fueled demand for Treasury bonds, which sent yields lower at the beginning of the day. The 10-year note yield fell to 2.36% before recovering modestly to end the day in the red anyway at 2.38%. The yield of the two-year note traded as low as 1.236%, before also recovering modestly. Nevertheless, the pair is intrinsically bearish, now trading below the previous yearly low of 110.62, the immediate resistance. In the 4 hours chart, the price remains well below its 100 and 200 SMAs, with the shortest crossing below the largest but both still lagging amid the strength of the latest bearish move, whilst technical indicators have lost their upward strength after correcting oversold readings, indicating that the current advance is just corrective. The pair has a major support at 109.90, the 50% retracement of the late 2016 rally, and a break below it should see the bearish momentum accelerate this Tuesday.

Support levels: 110.30 109.90 109.50

Resistance levels: 110.65 111.00 111.45

GBP/USD

The GBP/USD pair traded as high as 1.2614, its highest in almost two months, before pulling back to settle around 1.2565. There were no macroeconomic news in the UK, with broad dollar's weakness leading the way higher. UK PM Theresa May is expected to trigger the Brexit process next Wednesday, March 29th, and ahead of the announcement, met with Scottish PM Nicola Sturgeon. Sturgeon has called for a second Scotland independence referendum, against May's will, but the terror attack from last week has interrupted the tense relations between them both. After officially lunching the Brexit, the UK will have two years to negotiate new arrangements, after which it will no longer be subject to EU treaties. The latest downward corrective movement has not been enough to confirm an interim top in the pair, as it would take a break below 1.2535, the 23.6% retracement of the January´s rally to see it falling further. In the 4 hours chart, the price is also developing above a bullish 20 SMA, whilst technical indicators have retreated within positive territory, with the Momentum nearing 100, but the RSI around 67, this last losing downward strength and pretty much indicating limited selling interest at the time being.

Support levels: 1.2535 1.2500 1.2465

Resistance levels: 1.2585 1.2620 1.2660

GOLD

Spot gold closed the day higher at $1,255.78 a troy ounce after peaking at a fresh 1-month high of 1,260.95, retreating in US trading hours as risk aversion eased partially, but with the dollar anyway beaten by the Obamacare repeal bill's failure. With two more US Fed rate hikes priced in, the commodity seems poised to extend its recovery, as the FOMC no longer weighs on gold while political woes seem to be only beginning across the world. The daily chart for the commodity shows that the price managed to extend above its 200 DMA for the first time since late October 2016, while technical indicators have barely lost their upward strength within overbought territory, rather reflecting diminishing volumes at the end of the day than suggesting upward exhaustion. In the shorter term and according to the 4 hours chart, the risk remains towards the upside, as the price is well above a bullish 20 SMA, now the immediate dynamic support at 1,248.95, whilst technical indicators have resumed their advances within positive territory after correcting overbought conditions.

Support levels: 1.248.95 1,240.90 1,233.25

Resistance levels: 1,263.80 1,272.80 1,283.10

WTI CRUDE

Oil prices fell this Monday, with West Texas Intermediate crude oil futures ending the day at $47.69 a barrel. The commodity edged lower, despite oil producers pledged to extend their output cut deal past June during a weekend meeting. Russia was the only country that assisted to the meeting but said it needs more time before making a decision. The US benchmark bounced after retesting last week low of 47.07, but anyway maintains the bearish bias, as in the daily chart, the 20 DMA is now crossing below the 200 DMA far above the current level, the Momentum indicator eases its recovery below the 100 level, while the RSI indicator turned back south around 30, all of which supports additional declines towards the 45.00 region. In the 4 hours chart, the price is below its 20 SMA, although the indicator has lost is bearish slope and turned horizontal, whilst technical indicators have recovered within negative territory, but remain below their mid-lines, limiting chances of an upward corrective movement.

Support levels: 47.00 46.40 45.90

Resistance levels: 48.30 48.80 49.50

DJIA

Wall Street tumbled at the opening, with the three main American indexes falling to fresh six-week lows amid declines in overseas equities led by risk aversion. Fears that US President Donald Trump won't be able to deliver the growth agenda that includes tax reforms and infrastructure investment arose after the GOP had to pulled out the healthcare bill last Friday. Equities trimmed most of their intraday losses as concerns eased modestly, and the Nasdaq Composite managed to close in the green, up 11 points to 5,840.37. The Dow Jones and the S&P, however, closed in the red, with the first shedding 46 points to 20,550.91 and the second closing at 2,341.59, down 0.10%. The Dow closed in the red for eighth consecutive session, with the worst performer being Chevron that fell 1.48%, followed by Goldman Sachs that shed 1.39%. El du Pont was the best performer adding 1.27%, followed by Pfizer that gained 0.68%. The daily chart for the Dow shows that technical indicators decelerated their declines near oversold readings, but also that the benchmark posted a lower low and a lower high below a bearish 20 DMA, all of which maintains the risk towards the downside. In the 4 hours chart, the index remains below a sharply bearish 20 SMA, currently providing a dynamic resistance at 20,614, while technical indicators have bounced within bearish territory, but present limited upward strength, in line with the loner term perspective.

Support levels: 20,528 20,467 20,409

Resistance levels: 20,614 20,648 20,707

FTSE 100

The FTSE 100 settled at 7,293.50, down 0.59% or 43 points, but off its daily low of 7,254. Distrust on Trump's ability to activate the growth agenda promised after his victory sent investors away from high yielding assets. A stronger Pound also weighed on the Footsie, and within the benchmark, mining-related equities led the decline, as base metals fell on the continued unwind of the Trump trade, with Antofagasta being the worst performer, down 4.70%, followed by Glencore that shed 4.38%. Next led advancers, up 2.47% followed by Centrica that added 1.43%. Technical readings in the daily chart favor additional declines, as the index stands further below its 20 SMA, the Momentum indicator holds flat around 100, while the RSI indicator heads south around 45. In the 4 hours chart, the 20 SMA has crossed below the 100 SMA above the current level, while the Momentum indicator failed to surpass its 100 level before resuming its decline, and the RSI indicator consolidates around 38, all of which maintains the risk towards the downside.

Support levels: 7,284 7,254 7,220

Resistance levels: 7,319 7,357 7,392

DAX

European equities extended their decline at the beginning of the week, following the lead of their Asian counterparts. The German DAX shed 67 points and settled at 11,996.07, although it recovered above the 12,000 level in after-hours trading, amid Wall Street's bounce from intraday multi-week lows. Industrial and utilities-related equities led the decline within the German benchmark, with RWE AG losing 1.78%, followed by Heidelberg Cement that lost 1.38% and ThyssenKrupp that closed down 1.33%. Infineon Technologies was the best performer by adding 0.53%. Despite the early intraday decline, the daily chart for the DAX shows that it settled above a bullish 20 SMA, whilst the Momentum indicator holds neutral around its mid-line and the RSI indicator turned lower, but holds at 56, limiting chances of further declines. In the shorter term and according to the 4 hours chart, the index is biased higher, as it's currently trading above its 20 and 100 SMAs, both around 11,980, while the RSI indicator aims higher around 52 and the Momentum also advances modestly above its mid-line.

Support levels: 11,976 11,928 11,880

Resistance levels: 12,055 12,091 12,139

For the 24 hours to 23:00 GMT, the AUD rose 0.08% against the USD and closed at 0.7620.

LME Copper prices declined 1.9% or $109.0/MT to $5673.5/MT. Aluminium prices declined 0.1% or $1.5/MT to $1916.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7625, with the AUD trading 0.07% higher against the USD from yesterday’s close.

The pair is expected to find support at 0.7604, and a fall through could take it to the next support level of 0.7583. The pair is expected to find its first resistance at 0.7647, and a rise through could take it to the next resistance level of 0.7669.

With a lack of major economic releases in Australia today and tomorrow, investors will focus on Australia’s HIA new home sales data for February, slated to release on Thursday.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.23% against the USD and closed at 1.0864, after Germany's Ifo business climate index surprisingly advanced to a nearly seven-year high level of 112.3 in March, underscoring optimism over the health of the nation's business sector, despite rumblings of protectionism across the Euro-zone. Markets expected the index to remain steady at a revised level of 111.1, registered in the prior month.

Additionally, the nation's Ifo business expectations index climbed more-than-expected to a level of 105.7 in March, against market expectations of an advance to a level of 104.3 and after recording a reading of 104.2 in the prior month. Also, the nation's Ifo current assessment index registered an unexpected rise to a level of 119.3 in March, confounding expectations of a drop to a level of 118.3 and compared to a level of 118.4 in the previous month.

In the US, the Chicago Federal Reserve (Fed) President, Charles Evans, stated that three interest rate hikes remain more plausible this year, but two rate hikes are also conceivable, as the outlook remains uncertain, particularly with the latest failure of the healthcare bill. Nevertheless, he also added that the central bank could raise interest rates four times this year if inflation picks up markedly.

Separately, the Dallas Fed President, Robert Kaplan, indicated that he would support further monetary policy tightening if the US economy continues to show progress and nears the central bank's dual mandate of full employment and 2.0% inflation.

In the Asian session, at GMT0300, the pair is trading at 1.0859, with the EUR trading slightly lower against the USD from yesterday's close.

The pair is expected to find support at 1.0830, and a fall through could take it to the next support level of 1.0801. The pair is expected to find its first resistance at 1.0896, and a rise through could take it to the next resistance level of 1.0933.

With no crucial economic releases in the Euro-zone today, investors would direct their attention to a speech by the US Fed Chief, Janet Yellen, scheduled later today. Moreover, the US CB consumer confidence index for March as well as advance goods trade balance and wholesale inventories data, both for February, will garner a significant amount of market attention.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP rose 0.4% against the USD and closed at 1.2561.

In the Asian session, at GMT0300, the pair is trading at 1.2563, with the GBP trading slightly higher against the USD from yesterday’s close.

The pair is expected to find support at 1.2510, and a fall through could take it to the next support level of 1.2456. The pair is expected to find its first resistance at 1.2616, and a rise through could take it to the next resistance level of 1.2668.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.19% against the JPY and closed at 110.6.

In the Asian session, at GMT0300, the pair is trading at 110.64, with the USD trading slightly higher against the JPY from yesterday’s close.

The pair is expected to find support at 110.21, and a fall through could take it to the next support level of 109.79. The pair is expected to find its first resistance at 110.94, and a rise through could take it to the next resistance level of 111.25.

Going ahead, market participants will keep a close watch on Japan’s retail trade and large retailers’ sales data, both for February and the small business confidence index for March, slated to release overnight.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD declined 0.28% against the CHF and closed at 0.9854.

On the economic front, Switzerland's total sight deposits advanced to a level of CHF560.1 billion in the week ended 24 March, compared to CHF557.2 billion recorded in the previous week.

In the Asian session, at GMT0300, the pair is trading at 0.9856, with the USD trading slightly higher against the CHF from yesterday's close.

The pair is expected to find support at 0.9818, and a fall through could take it to the next support level of 0.9779. The pair is expected to find its first resistance at 0.9889, and a rise through could take it to the next resistance level of 0.9921.

Moving ahead, traders will look forward to Switzerland's ZEW survey of expectations index for March along with the UBS consumption indicator for February and the KOF spring economic forecast report, all scheduled for tomorrow.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.32% against the CAD and closed at 1.3380.

In the Asian session, at GMT0300, the pair is trading at 1.3378, with the USD trading slightly lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.3331, and a fall through could take it to the next support level of 1.3284. The pair is expected to find its first resistance at 1.3413, and a rise through could take it to the next resistance level of 1.3448.

Going forward, market participants would keep a close eye on a speech by the Bank of Canada Governor, Stephen Poloz, scheduled later today.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

Currency pair EUR/USD

The EUR/USD indeed continued with the uptrend yesterday by breaking slightly above 1.09. Price has bounced at the 61.8% Fibonacci target of wave C (green) could extend towards the 100% Fibonacci target near the psychological round level of 1.10.

The EUR/USD indeed completed a bullish wave 3 (orange) as indicated yesterday. A bearish retracement for a wave 4 (orange) seems likely at the moment and the Fibonacci levels of wave 4 vs 3 could act as support. A break below the 61.8% Fib makes a wave 4 less likely and a break below the channel invalidates it.

Currency pair GBP/USD

The GBP/USD broke above the resistance trend line (dotted red) and continues its strong bullish march higher within a wave C (orange).

The GBP/USD completed a bullish wave 3 (pink) and seems to be building a bearish retracement for a wave 4 (pink) at the moment. The Fibonacci levels of wave 4 vs 3 could act as support but a break below the 61.8% Fib makes a wave 4 less likely.

Currency pair USD/JPY

The USD/JPY is probably building a larger bearish ABC zigzag (brown), which could take price down to the 50% Fibonacci retracement support level of wave 4 vs 3 (purple).

The USD/JPY has divergence between the bottom of wave 3 (purple) and wave 5 (purple) which could trigger a retracement such as an ABC (orange) zigzag. A break below the 100% Fibonacci of wave B vs A invalidates the ABC pattern.

A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

The EUR started the week off on a strong footing, gapping around 50 pips north at the open which remains unfilled at this point. Strong buying, as you can see, took place throughout Asia and London. It was only once price crossed swords with the 1.09 handle going into the US session did we see the bears make an appearance, which has so far erased 50% of the day's gains. Alongside the 1.09 handle, the 2016 yearly opening level at 1.0873 and the daily resistance level coming in at 1.0850 have both been brought into play.

Despite the impressive H4 bearish rotation candle printed from 1.09, the bears have little space to stretch their legs at the moment. Collectively, the following zones are likely to become problematic down the road: the H4 support area at 1.0828-1.0814, the weekly support at 1.0819 and the daily broken Quasimodo line at 1.0812.

Our suggestions: Given the above points, neither a long nor short seems attractive at this time. Therefore, we'll remain on the sidelines during today's action.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

GBP/USD

Kicking this morning's report off with a look at the weekly timeframe, we can see that price briefly spiked above supply coming in at 1.2569-1.2404 yesterday. While this move has likely triggered a truckload of buy stops, which the big boys look to be selling into as we write, there is still a chance that the Quasimodo resistance barrier seen overhead at 1.2673 may come into the picture sometime this week.

Over on the daily candles, the pair closed beyond the Quasimodo resistance level at 1.2523 yesterday. Assuming that the bulls defend this line as support, the next upside hurdle to keep an eyeball on here is the aforementioned weekly Quasimodo resistance base.

The 1.09 handle, alongside February's opening line at 1.2586, elbowed its way into the spotlight on Monday, consequently forcing the piece to close just ahead of the H4 mid-way support at 1.2550.

Our suggestions: Through the simple lens of a technical trader, we see the following:

Selling this market is backed by the current weekly supply. However, seeing as how this would entail shorting into the H4 mid-way support and daily broken Quasimodo line, we would prefer not to get involved here.

Although price is currently trading nearby both the H4 mid-way support and daily broken Quasimodo line, buying this unit is also a tad tricky given that price is circulating within weekly supply!

Much like the EUR/USD, this market is quite restricted. As such, remaining on the sidelines for the time being seems the better path to take right now.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

AUD/USD

During the course of yesterday's sessions the commodity currency struck March's opening level at 0.7642, following an extension of Friday's bounce from just ahead of the 0.76 handle. The response seen from 0.7642 has so far been solid, and technically speaking, there's very little seen stopping the H4 candles striking the 0.76 boundary today. As mentioned in Monday's report, this psychological level is also positioned nearby February's opening level at 0.7577 and a 61.8% Fib support at 0.7589, forming a rather interesting base of support (painted in green).

What is also notable from this H4 zone is that the daily demand area at 0.7540-0.7570 (positioned just ahead of the weekly support area at 0.7524-0.7446) sits only 7 pips below this area! Therefore, one should prepare for the possibility of a fakeout here!

Our suggestions: While our team is interested in buying from the above noted H4 buy zone, we would still prefer to enter long within the lower limits of its range. That way, we can place stops beyond the daily demand! Should price reach this point and print a reasonably sized H4 bullish rotation candle, then our team would look to buy from here, targeting March's opening level at 0.7642 as an initial take-profit target.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT.

Levels to watch/live orders:

• Buys: 0.7577/0.76 ([waiting for a reasonably sized H4 bullish candle to form before pressing the buy button is advised] stop loss: Ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).

USD/JPY

Leaving the psychological handle 110 unchallenged, the pair gravitated north going into the early hours of yesterday's US segment. This, as you can see, eventually forced H4 price back above the daily broken Quasimodo line at 110.58, consequently forming a reasonably nice-looking daily buying tail. The other key thing to note here is that the weekly candles remain trading within the walls of a support area fixed at 111.44-110.10.

While we would agree that the above points suggest further buying could transpire today, the sellers may still have a hand in this fight! Directly above current price on the H4 scale, there's a lot of wood to chop through seen between the 111.50/111 handle (green circle). On top of this, there's also a daily resistance area pegged at 111.35-112.37 to take into consideration.

Our suggestions: Should the current H4 candle print a buying tail off 110.58, we may look to take an aggressive long from here with stops below the candle's tail, targeting the 111 neighborhood. Here we'd look to reduce risk to breakeven and take 70% off the table, leaving the remaining 30% to run.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT.

Levels to watch/live orders:

• Buys: Watch for H4 price to form a buying tail off 110.58 and then look to trade the break of the candle's high (stop loss: ideally planted beyond the rejection candle's tail).
• Sells: Flat (stop loss: N/A).

USD/CAD

The USD/CAD began the week in a rather negative climate, gapping 22 pips south at the open and collapsing to a session low of 1.3321 going into the London segment. Shortly after, however, the loonie managed to catch a healthy bid just ahead of March's opening level at 1.3312, and aggressively advance up to the 1.34 boundary. Apart from 1.34, the next H4 resistance on tap can be seen at 1.3434/1.3419 (November, December and January's opening levels marked in green). It might also be worth noting that directly above here there is a possible H4 fakeout area painted in yellow at 1.3452/1.3434 (the top edge denotes a 127.2% Fib ext. taken from the low 1.3263), which happens to register nicely with the lower limits of a daily supply at 1.3494-1.3439.

Looking over to the bigger picture, weekly action is seen trading within shouting distance of the 2017 yearly opening base line at 1.3434. Daily flow, nonetheless, still offers very little in terms of direction at the moment. The unit is seen meandering mid-range between the aforementioned supply and a support area at 1.3212-1.3169.

Our suggestions: We still have a keen interest in The H4 1.3434/1.3419 region for shorts. Here's why:

Of note is the 1.34 handle. Psychological levels are prone to fakeouts, and with 1.3434/1.3419 lurking just above 1.34, we feel it'd be a fantastic barrier to help facilitate a fakeout.

When these monthly levels converge, we typically find that they hold firm the majority of the time offering at least a bounce.

In that these monthly levels form a rather small zone, however, and with a somewhat attractive H4 fakeout zone seen above it (attractive due to it being located within daily supply) there is also a chance that price could whipsaw through the monthly levels before turning lower.

To short, we are looking for a H4 bearish selling wick to form that pierces into our pre-determined H4 yellow zone discussed above. With this, a sell from here would be a valid call, in our opinion. From this point, 1.34 could be a potentially troublesome level, so we'd be looking for this base to be consumed, which would in turn be our cue to reduce risk to breakeven.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm. BoC Gov. Poloz speaks at 3.10pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.3452/1.3419 ([watch for a H4 bearish selling wick to form within this range before considering a short] stop loss: ideally beyond the candle's wick).

USD/CHF

The Swissy, as you can see, opened the week on a bearish note, gapping 30 pips south. Following a retest to the underside of February's opening base line at 0.9890, the pair continued to dive lower until price stabilized a few pips ahead of the 0.98 handle during the early hours of the US segment, ending the day closing back above the H4 mid-way line 0.9850.

With this in mind, how do things stand on the bigger picture? Last week's action saw weekly price conclude trade beyond the trendline support extended from low 0.9443. Providing that the bears continue to hold ground here, then the next support target does not come into view until the 0.9639 mark! Down on the daily chart, nevertheless, price is currently holding firm within a support area pegged at 0.9842-0.9884, despite yesterday's aggressive spike below it. It would take a decisive close beyond this support area to convince us that price could be headed for the support line coming in at 0.9678, which sits only a few pips above the weekly support at 0.9639.

Our suggestions: Given the weekly timeframe, and considering that daily price looks as though it's hanging on by a thread within the current support area, buying from 0.9850 is not something we'd label high probability. A close back below this number on the other hand, followed up with a retest as resistance, would be enough for us to begin considering selling this market, targeting the 0.98 handle as a first port of call.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to close back below the 0.9850 level and then look to trade any retest seen thereafter (stop loss: ideally planted beyond the rejection candle's wick).

DOW 30

In recent sessions, H4 price shook hands with demand coming in at 20381-20425 and rallied strongly. Despite the market registering a loss yesterday, daily price printed a beautiful-looking buying tail that whipsawed through demand at 20527-20626. Buying at current price, however, would be challenging given the nearby H4 resistance zone drawn in at 20620-20654. And, of course, selling from this H4 zone would place one against potential daily buyers!

Our suggestions: Unfortunately, we see very little structure to hang our hat on this morning. As such, opting to stand on the sidelines here may very well be the better path to take today.

Data points to consider: US consumer confidence at 3pm along with FOMC member Kaplan speaking at 6pm GMT

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

GOLD

Strengthened by dollar weakness, the yellow metal shifted northbound yesterday. It was only once price crossed paths with a H4 Quasimodo resistance barrier at 1260.0 did bullion begin to stabilize and pullback. To our way of seeing things, this H4 level was helped by daily action residing within a supply area seen at 1265.2-1252.1.

Weekly movement on the other hand, shows that price is trading above a weekly Quasimodo resistance line at 1244.5. However, our desk has noted that until the high of this formation is broken (1263.7), the weekly line will remain valid. In other words, all the while the current daily supply area is in play, our team is bearish!

Our suggestions: Should the H4 candles retest the aforementioned H4 Quasimodo resistance today, we would, assuming that a reasonably sized H4 bearish candle is seen, look to short this market, targeting March's opening level at 1245.9.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1260.0 region ([waiting for a reasonably sized H4 bearish candle to form is advised] stop loss: ideally beyond the trigger candle's wick).

Global Markets:

• Asian stock markets: Nikkei up 1.10 %, Shanghai Composite fell 0.20 %, Hang Seng gained 0.70 %, ASX 200 rallied 1.15 %
• Commodities: Gold at $1254 (-0.15 %), Silver at $18.09 (-0.15 %), WTI Oil at $48.00 (+0.50 %), Brent Oil at $51.10 (+0.40 %)
• Rates: US 10-year yield at 2.38, UK 10-year yield at 1.17, German 10-year yield at 0.40

News & Data:

• South Korean GDP (QoQ) Q4 F: 0.50%(est 0.40%; prev 0.40%)
• South Korean GDP (YoY) Q4 F: 2.4% (est 2.3%; prev 2.3%)
• ANZ Roy Morgan Weekly Consumer Confidence Index March 26: 113.8 (prev 112.0)
• PBoC Fixes USDCNY Reference Rate At 6.8782 (prev fix 6.8701 prev close 6.8767)
• Fed’s Kaplan: Inflation Continue to Move Towards 2%
• Kaplan: Fed Would Be Wise to Move Gradually and Patiently
• Stocks, dollar recover as markets try to move past Trump's policy stumble – RTRS
• Weaker dollar lifts oil futures, but soaring U.S. output weighs – RTRS
• Inflation would have to be much stronger for four rate hikes in 2017: Fed's Evans – RTRS

Markets Update:

Sentiment in the stock market improved slightly. US stock indices were able to reverse losses yesterday, and overnight, most of the Asian indices finished the day with a gain. While there still remains uncertainty around US President Trump’s planned tax reform, the market seems to have confidence in it for now.

The Dollar recovered as well. EUR/USD ran into heavy resistance above 1.09 and fell back to 1.0855 overnight. The outlook is positive from a technical perspective, but there is still plenty of resistance on the way to 1.10. Similar price action was seen in GBP/USD, which struggled above 1.26. However, the next notable resistance level there lies at 1.27, near the 200 daily moving average.

The Australian Dollar has been consolidating in a rather tight range in the past three trading days. Should sentiment in the stock market pick up further, the currency could recover though. Support at 0.76 has held convincingly, and a break back above 0.7660 would signal that another test of 0.7750 could follow.

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