Demo Account   Live Account  

Newsroom

  • Share:

The EUR/USD pair closed the week at 1.0638, down for the first time this year

13th February 2017

EUR/USD

The EUR/USD pair closed the week at 1.0638, down for the first time this year, on a  mixture of arising political concerns in Europe and renewed hopes for US policies oriented to boost growth and inflation. In the EU, upcoming elections represent a challenge for the Union, as during this past week headlines shown that German leader, Angela Merkel, is now second in polls after decades of leading, while in France, Marine Le Pen, who vowed to retrieve the country of the Union, leads polls. A possible referendum in Italy, and Greece's bailout on "shaky ground," according to the European Commission President Jean-Claude Juncker, added to the negative sentiment towards the common currency.

In the US, comments from President Donald Trump late Thursday, anticipating a "phenomenal" tax reform to be announced during the next two to three weeks, triggered demand for the greenback at the end of the week. For the upcoming days, attention will center in Fed Chair Yellen's semi-annual testimony before the Congress, and any clue she may offer about monetary policy.

From a technical point of view, the EUR/USD pair´s  daily chart shows that, after reaching the 50% retracement of the November/January decline, the pair is back below the 38.2% retracement of the same decline and poised to test the next Fibonacci support at 1.0565. Technical indicators in the mentioned time frame head sharply lower within negative territory, whilst the price is below its 20 and 100 DMAs, this last with a strong downward slope around 1.0700. In the shorter term, and according to the 4 hours chart, technical readings also favor the downside, as a bearish 20 SMA kept capping the upside, currently around 1.0660, whilst the Momentum indicator turned south after failing to overcome its mid-line, and the RSI indicator consolidates around 38.

Support levels: 1.0620 1.0590 1.0565

Resistance levels: 1.0660 1.0710 1.0750

USD/JPY

The USD/JPY  pair closed the week with modest gains around 113.20, down on Friday after failing to regain the 114.00 level. Risk appetite was not enough to fuel the pair, with bulls probably disappointed by the outcome of the Abe-Trump meeting, as both leaders shook hands and praise one another, but said nothing about a possible trade deal or on how the relationship between the two countries will continue. Despite Wall Street closed at record highs for a second consecutive day on hopes for an upcoming tax cut and recovering US Treasury yields, the USD/JPY pair closed the week with a lower low and a lower high, somehow suggesting that yen's rally is not yet over. Risk aversion may re-surge with the weekly opening, as over the weekend, North Korea fired an unidentified ballistic missile, triggering condemnatory comments from both, Abe and Trump, with the first saying that missile tests "can absolutely not be tolerated." Technically, the daily chart shows that the pair was unable to break below a bullish 100 DMA, currently at 111.85, while the 38.2% retracement of the latest bullish run stands at 111.95, providing a major support for the upcoming days. In the same chart, however, technical indicators have lost upward strength right below their mid-lines, and the RSI is slowly turning south, leaning the scale towards the downside. In the 4 hours chart, the price is struggling with a bearish 100 SMA, while the RSI indicator pulled back from overbought readings, now heading lower around 54, whilst the Momentum indicator maintains its bullish strength near overbought readings.

Support levels: 112.85 112.40 111.90

Resistance levels: 113.60 114.00 114.55

GBP/USD

The GBP/USD pair retreated further from the two-month high achieved at 1.2705, and traded as low as 1.2346 this past week, to end it pretty much flat at 1.2483. The Pound was backed by news that the Brexit bill passed through the House of Commons without amendments, and strong UK data released on Friday, as industrial and manufacturing production more than doubled expectations in December, with the first up 1.1% and the second 2.1% when compared to the previous month. The year-on-year figures came in at 4.3% and 4.0% respectively, while previous  month's reading were revised higher.  Also, the goods trade balance for the same month showed a deficit of £-10.89B, better than the expected £-11.500B or previous £-11.55B, whilst the NIESR GDP estimate for the three months to January came in at 0.7%, beating expectations and above previous.  From a technical point of view,  the daily chart shows that the pair is right below a bullish 20 DMA, whilst technical indicators head modestly lower within neutral territory.
The chart also shows that the pair bounced strongly from the 38.2% retracement of its latest bullish run at 1.2430 a key support for the upcoming days. In the 4 hours chart, the price is trading below horizontal moving averages, with the 200 EMA a few pips above the mentioned Fibonacci support, while technical indicators are also standing within neutral readings, with a modest bearish potential.

Support levels:  1.2470 1.2430 1.2390

Resistance levels: 1.2535 1.2585 1.2620

AUD/USD

After being under pressure for most of the past week, the AUD/USD pair surged on Friday, ending the week flat at 0.7670. The Aussie got a boost by China's January trade balance figures which came in much stronger-than-expected, fueling optimism over the state of the world's second largest economy. In USD terms, Chinese trade surplus widened to $51.4 billion from $40.8 billion, while imports soared by an annualized 16.7%, following a 3.1% gain the previous month. Exports rose at a 7.9% annualized rate, following a 6.2% drop in December. The figures suggest that demand for Australian metals will remain strong, backing the commodity-related currency. However, and from a technical point of view, the pair is still unable to advance beyond 0.7700, a major resistance for most of 2016, as the pair has been continuously rejected on attempts to advance beyond it since last April. Technical readings favor a break higher, as in the daily chart, indicators have turned higher, with the Momentum bouncing from its 100 level and the RSI heading north around 67, whilst the price is well above a bullish 20 DMA, currently around 0.7600, the base of the weekly range. In the 4 hours chart, the pair presents a neutral-to-bullish stance, as the price is above a flat 20 SMA, while technical indicators have lost upward strength within positive territory.

Support levels: 0.7650 0.7605 0.7570

Resistance levels: 0.7710 0.7745 0.7790

Dow Jones

US equities extended their Thursday's rally, with all of the three major indexes closing the day at all-time highs. On Friday, the Dow Jones Industrial Average added 96 points or 0.48% to end at 20,269.37, while the S&P gained 0.36% to 2,316.10. The Nasdaq Composite settled at 5,734.13, up by 18 points. Stocks  rallied on Trump's promises of an upcoming tax reform, and a recovery in oil prices that lifted the energy sector. Within the Dow, Caterpillar led gainers, up by 2.50%, followed by NIKE that added 1.65% and Boeing, up by 1.19%. On the losing side, Coca-Cola topped losers' list, down 1.62%, followed by Wal-Mart Stores that shed 1.53%. From a technical point of view, the upside is favored given that in the daily chart the Dow is well above a modestly bullish 20 SMA, whilst the RSI indicator heads higher around 70, with the Momentum indicator, however, diverging, neutral around its 100 line. In the 4 hours chart, the bias is firmly bullish with the index well above a bullish 20 SMA, the Momentum indicator heading north near overbought readings and the RSI hovering around 72.

Support levels: 20,228 20,157 20,090    

Resistance levels: 20,297 20,350 20,415

FTSE 100

London shares got a boost from China last Friday as a better-than-expected trade surplus in the country sent mining-related equities higher, helping the FTSE 100 to add 29 points and close at 7,258.75. A weaker Pound also lifted the mood among local traders. Rio Tinto was the best performer, up 5.63%, followed by Antofagasta that gained 4.65% and Anglo American that added 4.40%. Reckitt Benckiser was the worst performer, down 2.96%, followed by Royal Bank of Scotland that lost 1.80%. The index closed at its highest in three weeks, and technical readings in the daily chart support additional gains, given that the benchmark has extended above a still flat 20 SMA, but indicators maintain bullish slopes within positive territory. In the 4 hours chart, the 20 SMA advanced to converge with the 100 SMA at 7,208, providing a strong dynamic support, while the RSI indicator consolidates at 71 and the Momentum indicator turned higher within positive territory, in line with the longer term perspective.

Support levels: 7,208 7,163 7,128

Resistance levels: 7,275 7,326 7,354

DAX

European equities closed marginally higher on Friday, with the German DAX finishing at 11,666.97, up 24 points. Despite staring the day with a strong footing, shares failed to extend the risk-appetite rally triggered by the US president on Thursday, but remained afloat on strong earnings reports released earlier in the week, and positive trade data coming from China. In Germany, banks were among the worst performers, with Commerzbank down 2.37%, leading losers' list, and Deutsche Bank down 1.35%. ThyssenKrupp was the best performer by adding 2.35%, followed by Heidelberg Cement that closed 1.58% higher. Technically, the pair presents a modest upward potential in the daily chart,  as it´s just holding at the upper end of its latest range, and a few points above a flat 20 SMA, whilst technical indicator in the mentioned time frame barely aim higher within neutral territory. In the 4 hours chart, the index settled above all of its moving averages, but the 20 and 100 SMAs lack clear directional strength, whilst technical indicators have turned lower within positive territory, limiting chances of a steeper recovery as long as the benchmark is unable to advance beyond 11,720, Friday's high and the immediate resistance.

Support levels: 11,605 11,545 11,498

Resistance levels: 11,720 11,794 11,845

Nikkei

The Nikkei 225 soared 2.49% or 471 points to close at 19,378.93 on Friday, tracking Wall Street's run to record highs after US President Trump commented on an upcoming tax-reform that sent the yen sharply lower. Financial and electronic stocks lead gains, whilst energy-related equities also gained amid a recovery in oil prices. Within the Nikkei, only nine members closed in the red, with Tokai Carbon being the best performer, up by 14.93%, followed by Yamaha Motor that added 7.72% and Nisshinbo Holdings which gained 7.02%. In the daily chart the index presents a modest upward potential, given that it settled above a horizontal 20 DMA, while the Momentum indicator remains directionless around its 100 level and the RSI indicator losses upward strength around 56. Shorter term, and according to the 4 hours chart, the index is biased higher, as the RSI indicator hovers around 68 whilst the Momentum indicator turned higher near overbought readings. Also, and in this last time frame, the 20 SMA turned sharply higher well below the current level, pointing to advance beyond the 100 SMA, supporting further short term gains on a break above 19,390 the immediate resistance.

Support levels: 19,280 19,214 19,158

Resistance levels: 19,390 19,450 19,515

Gold

Gold prices extended their gains this past week, with spot reaching a fresh three-month high of $1,244.67 a troy ounce, to close the week at 1,234.01, down on Thursday amid re-surging risk appetite. Despite broad dollar's strength, demand for gold remained high, amid reduced hopes of three rate hikes coming from the FED this year, with speculators foreseeing the most, two hikes one in June and one in December. Gold prices will depend much on the upcoming Federal Reserve Chair Janet Yellen semi-annual testimony before congress, with a hawkish stance probably taking gold down. From a technical point of view, the upside is still favored given that in the daily chart, the price is well above a bullish 20 DMA that crossed above a bearish 100 DMA, whilst technical indicators have advanced within positive territory, with the Momentum indicator heading north at fresh monthly highs. In the 4 hours chart, however, the price is right below a horizontal 20 SMA, the Momentum indicator retreats from its 100 level within bearish territory, whilst the RSI indicator lacks strength around 55, suggesting a break above Friday's high of 1,237.10 is required to confirm further gains.

Support levels: 1,230.00 1,219.40 1,210.10

Resistance levels: 1,237.10 1,244.70 1,255.15

WTI Crude Oil

West Texas Intermediate crude oil futures closed the week unchanged at $53.85 a barrel, but off  a fresh 4-week low set late Tuesday at $51.21. Oil come under pressure after the API reported a large US build of crude stockpiles, up by 14.227 million barrels and  gasoline inventories 2.903 million barrels, the second highest inventory increase in the US history according to the organism. The EIA report also showed a large build of crude stockpiles, up by 13.8 million barrels, although gasoline inventories decreased by 0.9 million barrels, triggering a relief rally. On Friday, the oil rallied after the  International Energy Agency reported that  OPEC's cuts in January equated to 90%  of the agreed reductions in output, far higher than the initial 60% compliance back in 2009  with previous OPEC's cut deal. Nevertheless, and from a technical point of view, WTI remains neutral, stuck within a well define range since early December. In the daily chart, the price is above a horizontal 20 DMA, whilst technical indicators present modest bullish slopes within neutral territory, favoring some additional gains for this Monday, but limiting by the top of the range around 55.00. In the 4 hours chart, technical indicators have retreated modestly from overbought readings, but are far from suggesting an upcoming slide, whilst the price is well above a now bullish 20 SMA, also above the 100 and 200 SMAs, in line with the longer term perspective.

Support levels: 53.15 52.50 51.80

Resistance levels: 54.10 54.70 55.35

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

English Footer

Office network

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015
Saudi Money Expo

Broker of the Year
Online Trading – Middle East
IAIR Awards

Best Forex
Customer Service 2018
JFEX Awards

We accept the following payment methods:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.