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The dollar closed the day marginally higher against its European rival

8th March 2017

EUR/USD

The dollar closed the day marginally higher against its European rival, although still confined within its Friday's range, as caution prevails ahead of major macroeconomic releases later this week. The EUR/USD pair was contained by selling interest around 1.0600, and settled near the major Fibonacci support at 1.0565, despite early London, EU Q4 GDP growth was confirmed at a robust 0.4%. German factory orders, however, disappointed as  new orders in manufacturing fell by 7.4% in January, against a December advance of 5.2%. The annual reading resulted at -0.8%, from a previously revised 8.0%. In the US the trade deficit widened to $48.5B in January, as expected, whilst the US IBD/TIPP Economic Optimism Index declined 1.1 points, or 2.0%, in March, posting a reading of 55.3 vs. 56.4 in February 2017.

The EUR/USD pair set a lower low and a lower high daily basis, indicating that the upward momentum seen last Friday kept fading despite the limited intraday volatility. In the daily chart, the pair has moved further below its 100 DMA and closed the day below its 20 DMA for a second consecutive day, although barely. In the 4 hours chart, the price is barely holding above a bullish 20 SMA, and a few pips below a bearish 100 SMA, while the Momentum indicator head lower, still above its 100 level, and the RSI also turned south, but remains around 50. Market seems ready to resume dollar's buying, but will likely wait from macroeconomic confirmations, in  the form of the ECB monetary policy announcement and the US Nonfarm Payroll report, to be unveiled later this week. 

Support levels: 1.0565 1.0520 1.0470

Resistance levels: 1.0635 1.0660 1.0710

USD/JPY

The USD/JPY pair closed the day flat around 114.00, amid the absence of directional clues. Equities closed mixed around the globe, but not far from their opening levels, while US Treasury yields remained unchanged around Monday's levels. Japan will release the final version of its Q4 GDP during the upcoming Asian session, expected to be revised up to 0.4% from previous estimate of 0.2%, alongside with January trade figures, but seems unlikely the data could trigger some interesting moves. China will also release its trade figures for February, and will likely have a deeper effect over currencies than Japanese ones. From a technical point of view, the 4 hours chart shows that the price has held above its 100 and 200 SMAs that anyway remain flat, converging in the 113.30 region, while technical indicators lack directional strength, flat within neutral territory, reflecting the quietness around the pair. 

Support levels: 113.50 113.25 112.90 

Resistance levels: 114.55 114.95 115.30 

GBP/USD

Pound's bearish momentum accelerated this Tuesday as the dollar recovered its upward pace, leading to a decline in the GBP/USD pair to levels last seen mid January. Further weighing on Pound were news that PM Theresa May suffered another setback in the house of Lords, as peers voted by 366 to 268 in favor to give the Parliament the ability to veto any final Brexit deal if the terms aren't good enough for the UK. Lords also dismissed the possibility of a second referendum. Earlier on the day, the Halifax house price index showed that house prices posted the slowest rate of growth in over three years in the three months to February, up 5.1% than in the same period a year ago, but down from a 5.7% gain in the three months to January. The lender, also said that it expects prices growth to keep easing due to lower consumer spending power. From a technical point of view, the pair is at risk of falling further, as it extended its slide well below the 61.8% retracement of January's rally at 1.2260, and the 4 hours chart shows that the 20 SMA maintains its bearish slope, now below the mentioned Fibonacci level, while the Momentum indicator retreated from its mid-line, and the RSI indicator holds flat around 31, all of which supports some additional slides on a break below the mentioned daily low. 

Support levels: 1.2170 1.2130 1.2085

Resistance levels: 1.2220 1.2260 1.2300 

AUD/USD

The AUD/USD pair advanced up to 0.7630 ahead of the RBA monetary policy decision, but eased afterwards, after Governor Lowe tone was less hawkish than expected. The Central Bank kept rates at 1.5%,  but the statement was quite neutral, cheering rising exports and non-mining investment, but still indicating concerns among policymakers, about low inflation and the lack of full-time employment growth. China will release its February trade balance data during the upcoming Asian session, and the Aussie could benefit from strong readings that indicate rising imports and activity in the world's second largest economy. In the meantime, the 4 hours chart shows that the upward potential remains limited, as the price was unable to settle above its 200 EMA, although short term buying interest is defending the downside around 0.7570. In the same chart, the RSI indicator heads south around 44, while the Momentum indicator also turned lower, but holds above its 100 level, reflecting the limited intraday volume rather than indicating upcoming direction. 

Support levels: 0.7570 0.7530 0.7490

Resistance levels: 0.7620 0.7650 0.7695

Dow Jones

US indexes closed the day marginally lower, down for a second consecutive day. The Dow Jones Industrial Average settled at 20,924.76  down by 29 points, while the S&P lost 0.29%, to 2,368.39. The Nasdaq Composite closed at 5,833.93, down by 15 points. Energy and pharmaceutical equities were among the worst performers, with Verizon Communications leading Dow's decline, down by 1.32%, followed by Chevron that shed 1.23%. Boeing was the best performer after adding 0.55%. Technically, the daily chart for the Dow shows that the benchmark barely surpassed its Monday's low, and held within a well-limited range, as caution prevailed, with the Momentum indicator still holding horizontal above its 100 level, and the RSI indicator also heading nowhere around 70. In the shorter term, the 4 hours chart the benchmark is increasingly bearish, as attempts to advance were contained by a now bearish 20 SMA, at 20,957, whilst technical indicators head south within bearish territory, after being unable to re-enter positive territory. 

Support levels: 20,892 20,849 20,800

Resistance levels: 20,957 21,017 21,064 

FTSE 100

The Footsie closed at 7,338.99 down 11 points or 0.15%, despite continued Pound weakness. The decline was led by bookmaker Paddy Power Betfair that shed 5.86% as despite reporting an 18% raise in revenues, the company also informed that after last year's merge, losses accounted £5.7 million. Financial and mining-related equities were also under pressure, with Standard Life down 3.78% and Antofagasta shedding 2.6%. Intertek Group, on the other hand, was the best performer, advancing 4.76%. The daily chart for the index shows that it stands near the mentioned close, holding above bullish moving averages, but with technical indicators still retreating within positive territory, suggesting the index could fall further, particularly on a break below 7,299, the 20 DMA and the immediate support. In the 4 hours chart, the index extended below a bullish 20 SMA, whilst technical indicators present tepid downward strength within bearish territory, in line with the longer term perspective. 

Support levels: 7,299 7,265 7,238 

Resistance levels: 7,345 7,397 7,420 

DAX

The German DAX advanced 7 points this Tuesday to settle at 11,966.14, with most major European indexes closing flat, as macroeconomic data came in line with expectations, failing to motivate investors ahead of the ECB and the US NFP. Among the German benchmark, automakers and pharmaceuticals led the advance, with Daimler leading advancers, up 0.91%, followed by Continental that added 0.43%. Financials remained under pressure, with Deutsche Bank adding 1.18% to its recent losses. Daily basis, the index remained within Monday's range, still developing above bullish moving averages, which indicate that the downward potential remains limited, whilst the Momentum indicator holds flat within neutral territory and the RSI indicator retreats from overbought readings. In the 4 hours chart, the index consolidated below a still bullish 20 SMA, whilst technical indicators have lost directional strength right below their mid-lines.

Support levels: 11,920 11,867 11,816

Resistance levels: 12,001 12,053 12,100 

Nikkei

Asian shares closed again mixed, but not far from their opening levels. The Nikkei 225 lost 34 points or 0.18% and settled at 19,344.15, as the USD/JPY pair traded below the ¥114.00. Financials were under pressure, tracking Monday's losses in Europe and the US, while mining-related equities led the way lower. The worst performer was Toho Zinc, down 2.97%, followed by Tokuyama Corp. that lost 2.86%. Ebara, a capital goods industry, was the best performer ending the day 3.02% higher. Trading was restricted, with investors in wait-and-see mode across the globe. Technically, the daily chart shows that the index closed around a horizontal 20 DMA whilst technical indicators head nowhere, stuck around their mid-lines. Still the index is far above a bullish 100 DMA, which indicates that the downside is limited in the longer run. In the 4 hours chart, the index is clearly in a consolidative phase, hovering around a horizontal 100 SMA, with an increasing downward potential, given that technical indicators remain within negative territory and the 20 SMA heads south well above the current level. 

Support levels: 19,327 19,280 19,238

Resistance levels:  19,406 19,456 19,505

 

Gold

Despite the limited action seen across the FX board, the greenback was firmer against other assets, with gold underperforming, plunging to $1,214.09 a troy ounce and finishing the day a few cents above it. Spot fell to a fresh 1-month low on hopes the US Federal Reserve will pull the trigger on rates as soon as next week. The daily chart shows that the price pulled further away from its 200 DMA, which now converges with the 61.8% retracement of post-US slide, also extending its slide below the 20 DMA, whilst technical indicators maintain sharp bearish slopes within negative territory, supporting additional declines with the market now targeting 1,204.50, the 38.2% retracement of the same rally. In the 4 hours chart, the bearish momentum is even stronger, as the RSI maintains its downward strength around 23, while the Momentum indicator retraced sharply after failing to overcome their mid-lines. In the same chart, the 20 SMA maintains a strong bearish slope, having already crossed below the 100 SMA, and poised now to break below the 200 SMA.  

Support levels: 1,204.50 1,198.15 1,188.20

Resistance levels: 1,221.70 1,230.00 1,239.25 

WTI Crude Oil

US sweet, light crude continued to trade flat as WTI futures ended the day a few cents above $53.00 a barrel, retracing an early spike up to 53.78. Saudi Arabia's oil minister gave mixed messages on future OPEC production cuts, saying that the deal sealed last November has improved the oil market, but only because Saudi Arabia cut beyond its pledge. Ahead of US inventory data, the daily chart shows that the index is posting a second consecutive doji, with the early advance contained by selling interest around a horizontal 20 DMA, still around 53.70. In the same chart, the Momentum indicator continues to be flat around its 100 level, but the RSI indicator heads modestly lower around 45, leaning the scale towards the downside. In the 4 hours chart, the price remains trapped within horizontal moving averages, whilst technical indicators turned south, and are currently entering negative territory, in line with the longer term view. 

Support levels: 52.50 51.90 51.40

Resistance levels: 53.70 54.20 54.80

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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.