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The EUR/USD pair closed the day marginally higher around 1.0590

28th February 2017

EUR/USD

The EUR/USD pair closed the day marginally higher around 1.0590, retreating from a daily high of 1.0630 achieved at the beginning of the American session,  following disappointing US data. The world's largest economy released its Durable Goods Orders for January, with the headline reading reaching 1.8% in the month, recovering from a 0.8% decline in December, although the core reading, which excludes transportation, fell by 0.2% from a previous advance of 0.9%. Also, the Pending Home Sales Index unexpectedly decreased by 2.8% in the month. 

The greenback, however, re-surged against its major rivals on comments from US President Trump, who pledged for large infrastructure investment.  Trump will address the Congress this Tuesday, to present the first federal budget proposal, expected to call for a $54 billion increase in defense spending, to be offset with a similar cut in domestic programs. Also, President Trump met with major health insurers, to discuss how to dismantle and replace the Obamacare program. 

The EUR/USD pair broke above a daily descendant trend line coming from February high at 1.0828, with a limited upward potential according to the 4 hours chart, as the recovery stalled around a bearish 100 SMA, whilst technical indicators have lost upward strength, with the Momentum having turned sharply lower within positive territory, and the RSI indicator losing upward strength within positive territory. Political woes have kept the upside well-limited in the common currency, but that doesn't mean that the pair can't run higher if the dollar keeps weakens. Still any advance should be contained by selling interest around 1.0700/20, the region that capped the upside for most of this February. 

Support levels: 1.0520 1.0470 1.0440

Resistance levels: 1.0590 1.0635 1.0660

USD/JPY

The USD/JPY pair flirted with Friday's low at the beginning of the day, falling down to 111.93 before recovering up to 112.48 mid London morning. The pair retreated at the beginning of the US session, as US data was generally disappointing, with the advance in the Durable Goods Orders' headline, being offset by the core reading  that came in negative, and pending home sales that fell well beyond expected. The pair, however, broke higher ahead of Wall Street close as stocks recovered their early losses, while Treasury yields advanced following comments from US President Trump, pointing to large infrastructure investment. The 10-year note benchmark jumped to 2.36% after plummeting to 2.32% on Friday, backing the advance in the pair. Holding near a daily high of 112.72, the 4 hours chart shows that technical indicators have turned sharply higher from oversold readings  and are currently entering positive territory, not enough at this point to confirm a stronger advance, whilst the 100 and 200 SMAs maintain bearish slopes above the current level, with the shortest around 113.05. The advance could extend, should the positive sentiment persist, although investors may turn cautious and wait for Trump's speech before the Congress before giving the pair another directional push. 

Support levels: 112.50 111.95 111.60

Resistance levels: 113.05 113.45 113.90

GBP/USD

The Pound was under selling pressure ever since the day started, on news pointing that the UK government is preparing for a potential independence referendum in Scotland next March.  Scottish PM Nicola Sturgeon has said that a referendum is "highly likely after the UK decided to break with the EU without even attempting to remain within the Single Market. There were no official confirmations on the matter, although the news also suggested that PM May could agree with the referendum, as long as it its held after the UK leaves the EU. The GBP/USD pair fell down to 1.2383, bouncing from the support area that has contained declines since mid February, and advanced up to 1.2478, but finally eased on the back of renewed dollar demand, in the US afternoon. From a technical point of view, the GBP/USD pair maintains a negative bias, as the intraday recovery stalled around a flat 20 SMA, while technical indicators have failed to surpass their mid-lines, and resumed their declines. The pair has bounced multiple times from the 1.2380 region, an immediate strong support, although it will take a break below 1.2345, February low and the 50% retracement of the latest bullish run, to confirm a steeper decline for the upcoming sessions. 

Support levels:  1.2380 1.2345 1.2300

Resistance levels: 1.2480 1.2530 1.2565

AUD/USD

The AUD/USD pair showed little signs of life this Monday, confined to a 50 pips range ever since the week started, as opposing forces limited directional moves. Resurging dollar in the US afternoon after Trump anticipated he will discuss infrastructure spending before the Congress  on Tuesday, was not enough to offset the Aussie, supported by rising equities. Australia will release its New Home Sales and Current Account data during the upcoming session, although the macroeconomic guidance for the Aussie  will come early Wednesday, with the release of Chinese PMIs. The technical picture remains unchanged, with the pair confined to the higher end of its February range, still unable to sustain gains beyond the 0.7700 level. Technical indicators in the 4 hours chart support a downward extension, as the pair met selling interest on approaches to a flat 20 SMA, while the RSI indicator turned lower, now around 45, and the Momentum indicator accelerated its decline within negative territory, now at fresh 2-week lows. Nevertheless, the pair needs to break below 0.7600, to confirm additional declines that can extend down to 07450 during the following sessions.

Support levels: 0.7640 0.7600 0.7555

Resistance levels: 0.7710 0.7740 0.7770 

Dow Jones

Another day, another record high for the Dow. The US index advanced 15 points or 0.08% to close at 20,837.44, its 12th consecutive record high. The Nasdaq Composite added 16 points and ended at 5,861.90, while the S&P closed at 2,369.73, up by 0.10%. Industrial and energy-related equities led the advance within the Dow, after US President Trump said that there is "no choice" but to spend on infrastructure. Caterpillar was the best performer, up 2.03%, followed by Chevron, which added 1.50%. The last time the Dow advanced for twelve days in-a-row was back in 1987, right ahead of the Black Monday and the market crash. Gains have been quite limited in the last four trading sessions, reflecting investors are hesitant to push equities too much higher. In the daily chart, the index remains well above a healthy bullish 20 DMA, while the RSI indicator hovers around 83, and the Momentum indicator retreats modestly from near overbought territory, still far from suggesting a downward move. In the 4 hours chart, the index still holds above a bullish 20 SMA, while technical indicators head lower within positive territory, lacking strength enough to confirm a bearish breakout. 

Support levels: 20,794 20,742 20,695

Resistance levels: 20,855 20,900 20.940

FTSE 100

The FTSE 100 managed to add 9 points or 0.13% to close at 7,253.00 this Monday, helped by a weaker Pound that helped offset losses in the insurance sector. News that the Ministry of Justice changed the way of calculating personal injury claims affected insurance companies' equities, on speculation that payouts will be increased and affect companies' profits. Direct Line plunged 7.16%, while Admiral Group shed 2.46%. Financial-related equities also closed in the red, with Royal Bank of Scotland down 2.02%. The daily chart shows that the Footsie settled above its 20 SMA, currently at 7,239, while technical indicators present modest upward slopes within positive territory, indicating that the downside potential remains limited. In the 4 hours chart, however, the index is holding right below a bearish 20 SMA, while the Momentum indicator is unable to surpass its 100 level. The RSI indicator in this last time frame advances around 50, not enough to confirm further advances for this Tuesday. 

Support levels: 7,238 7,195 7,160 

Resistance levels: 7,285 7,315 7,342 

DAX

European equities ended the day pretty much flat in a dull trading session, with the German DAX settling at 11,822.67, up by 18 points or 0.16%. An early advance in oil prices kept the energy sector up, preventing the index from ending lower, while financials  underperformed, following the lead of their Asian counterparts. In Germany, Adidas was the best performer, closing up 3.88%, followed by E.ON that added 2.62%. Deutsche Boerse topped losers' list, ending down 3.93%, while Volkswagen shed 1.17%.  DAX's daily chart shows that an early decline as contained by buying interest around a horizontal 20 DMA, currently at 11,744, while the Momentum indicator heads nowhere within positive territory and the RSI indicator turned flat within positive territory after correcting overbought conditions, all of which limits chances of a steeper decline. In the 4 hours chart, the index broke below its 20 SMA, but bounced from a bullish 100 SMA, while technical indicators also lack directional strength, but hold within negative territory, indicating that the index needs to regain the 11,900 level to confirm that the bullish trend remains firm in place. 

Support levels: 11,828 11,781 11,737 

Resistance levels: 11,865 11,902 11,945 

Nikkei

Asian equities closed in the red, with the Japanese Nikkei down 174 points or 0.91%, to end at 19,107.47. The index fell as low as 18,988, level last seen February 9th, with a stronger yen weighing on investors sentiment.  Mining and financial-related equities were the worst performers, but Toshiba led losers' list, down 4.09%, followed by Sompo Holding that shed 4.0%. Mitsubishi Motors was the best performer, ending up 2.64%. The index bounced back in after-hours trading and is poised to open the day around 19,200, taking clues from a stronger dollar that pushed the USD/JPY pair near 113.00 in the US afternoon. The daily chart for the index shows that it's standing a few points below a horizontal 20 DMA, but well above a bullish 100 DMA, while technical indicators hover within neutral territory with no clear directional strength. Shorter term, the 4 hours chart shows that the index is trapped within horizontal moving averages, while technical indicators have recovered within bearish territory, holding still below their mid-lines. 

Support levels: 19,170, 19,129 19,080

Resistance levels: 19,229 19,277 19,334

Gold

Gold prices extended their advance at the beginning of the day, with spot reaching a fresh yearly high of 1,263.79 before ending the day in the red, a few cents below $1,255.00 a troy ounce. The safe-haven metal eased on hopes US President Trump will unveil his infrastructure investment' plans this Tuesday, when he will address a joint session of Congress. From a technical point of view, the daily chart shows that the price surged briefly above its 200 DMA before reversing course, whilst technical indicators keep retreating within positive territory, yet at the same time, its holding  at multi-month highs while developing above a bullish 20 DMA, this last at 1,236.98. Additionally, the pair is consolidating around the 61.8% retracement of the post-US election decline, indicating a limited downward potential at the time being. In the 4 hours chart, technical indicators have turned sharply lower from overbought readings, still holding within positive territory, while the price is well above all of its moving averages, with the 20 SMA heading sharply higher at 1,250.20, providing an immediate support.  

Support levels: 1,250.20 1,242.50 1,230.00 

Resistance levels: 1,263.80 1.273.20 1,281.70

WTI Crude Oil

West Texas Intermediate crude oil prices closed the day unchanged, at $54.04, trimming its modest daily gains on news that a pipeline in Kirkuk, Iraq, was blown-up killing at least one and injuring several members of the Kurdish security forces. The pipeline is a focus of conflict, as it will allow Iraq to export oil through Iran, and diversify away from Kurdistan.  Also, fears that increasing US production will offset OPEC's efforts to push prices higher, limited gains in the commodity. Technically, oil maintains the neutral stance seen on previous updates, with the price still developing above a horizontal 20 DMA, and technical indicators heading nowhere around their mid-lines. In the 4 hours chart, the price continued to move back and forth around a directionless 20 SMA, whilst technical indicators are standing within negative territory, but lacking directional strength. 

Support levels: 53.40 53.00 52.50

Resistance levels: 54.75 55.30 56.00

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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.