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The EUR/USD pair closed the day a handful of pips above a fresh weekly low of 1.0534

9th March 2017

EUR/USD

The EUR/USD pair closed the day a handful of pips above a fresh weekly low of 1.0534, achieved early US session. There were no major news in the EU, with the greenback trading marginally higher during the first half of the day, as cautious prevailed ahead of the ECB and the US NFP report. Still, the release of the US ADP survey fueled dollar's advance as the report showed that the private sector added 298K new jobs during February, largely surpassing expectations of 190K new jobs. Also, previous month figure suffered an upward revision, to 261K from previous 246K.

This Thursday, the ECB will have a monetary policy meeting, and while the Central Bank is largely expected to keep its bond buying program and rates at current levels, it's also expected to upgrade its growth and inflation forecast, and offer a more optimistic statement. That could be enough to trigger an intraday recovery for the common currency, but unless Draghi announces the intention of rising rates from current negative levels, or tightening the easing programs, euro gains will likely be short-lived, should it gain on hawkish words. 

From a technical point of view, the risk is clearly towards the downside, as in the 4 hours chart the price stands comfortable below 1.0565, a major Fibonacci resistance, while the 20 SMA has lost its bullish strength, now turning lower and converging with the 100 SMA in the 1.0590 region. Also, the Momentum indicator in the mentioned chart turned flat within negative territory, whilst the RSI indicator continues heading lower, reaching fresh 2-week lows at 40. Much of Thursday's direction will depend on Draghi's announcements, but in the case of a sudden recovery, the most that the pair can advance is up to 1.0700/20, where selling interest is aligned. 

Support levels: 1.0520 1.0490 1.0440

Resistance levels: 1.0565 1.0600 1.0635 

USD/JPY

The USD/JPY pair advanced up to 114.74 this Wednesday, paring gains at the so far monthly high, to settle around 114.50 at the end of the day, unable to confirm a break of a major Fibonacci resistance. The advance took place ahead of the release of the US ADP report, with many suspecting some leak in the middle. Nevertheless, the private employment survey fueled the pair's advance, also underpinned by a sharp recovery in US Treasury yields. The rate-sensitive 2-year yield jumped to 1.36%, its highest since August 2009, on speculation the upcoming US Nonfarm Payroll report will be strong enough to back a Fed's hike as soon as next week. The pair could extend its consolidation around current levels during the next session, ahead of the ECB meeting and the US employment report, this last, with more chances of affecting it. The price is hovering around the 23.6% retracement of the late 2016 rally, having been unable to settle above it since late January. In the 4 hours chart, the price is well above its moving averages that anyway remain directionless, whilst technical indicators are retreating modestly within positive territory, not enough to suggest an upcoming downward move. At this point, the pair needs to extend beyond 114.95, February 15th high to confirm additional gains ahead. 

Support levels: 114.15 113.70 113.20 

Resistance levels: 114.95 115.30 115.80

GBP/USD

Pound's bleeding continued this Wednesday, with the GBP/USD pair trading as low as 1.2138 and settling not far above this fresh multi-week low, amid persistent uncertainty surrounding the upcoming Brexit. News on Tuesday that the House of Lords approved a second amendment to the Brexit bill, weighed on the Sterling. Peers agreed to have  the last saying on any final EU exit deal before it gets approved, after voting an amendment to protect EU citizens within the kingdom last week. Both amendments are against PM May will, and therefore the slide in Pound. Nevertheless, the government expects to revert these decisions in the House of Common, as the bill will return there next week. The pair remains at risk of falling further, given that the price is developing well below a firmly bearish 20 SMA in the 4 hours chart, with approaches to the indicator being quickly rejected and resulting in lower lows. In the same time frame, the RSI indicator has failed to correct higher and turned back south around 29, while the Momentum indicator heads nowhere well below its 100 level, reflecting the consolidation seen during the American session. 

Support levels: 1.2130 1.2085 1.2040

Resistance levels: 1.2180 1.2220 1.2260 

AUD/USD

The AUD/USD pair fell to its lowest since late January this Wednesday, undermined at the beginning of the day, by a negative surprise coming from China, as the country announced its first monthly trade deficit in three years. According to the official release a sharp decline in exports, which fell by 1.3%, resulted in a trade deficit of $9.2B for February. Imports in the same month, and also in dollar terms, rose by 38.1% when compared to a year earlier. There are no news scheduled in Australia during the upcoming Asian session, but China will release February inflation figures, also set to affect this particular pair. The AUD/USD pair traded as low as 0.7531 and is technically poised to extend its decline, as in the 4 hours chart, technical indicators maintain their sharp bearish slopes, approaching oversold territory, whilst the price faltered around its 200 EMA before breaking below a now bearish 20 SMA. 

Support levels: 0.7530 0.7490 0.7445

Resistance levels: 0.7570 0.7620 0.7650 

Dow Jones

Wall Street closed mixed, with the Dow Jones Industrial Average down 69 points, to 20.855.73 and the S&P ending the day at 2,362.98, 5 points lower,  but the Nasdaq Composite up 3 points, to 5,837.55. Energy-related equities led the decline as oil prices plunged, offsetting gains in the financial sector. Within the Dow, Caterpillar was the worst performer, down 3.00%, followed by Chevron that shed 2.13% and Exxon Mobil that closed 1.78% lower. Wal-Mart led advancers, adding 0.81%, although just 8 out of 30 components closed in the green. The Dow daily chart shows that it stands some points above bullish moving averages, but near the 20 DMA, currently at 20,792, an immediate dynamic support. The Momentum indicator extended its decline within bullish territory, while the RSI also heads lower, now around 63, leaving overbought territory, all of which supports some additional declines, particularly on a break below the mentioned SMA. In the shorter term,  and according to the 4 hours chart, the index presents an increasing bearish potential, as the 20 SMA continued to cap the upside, whilst technical indicators remain within negative territory, with modest bearish slopes amid limited intraday volume, but with no signs of changing course in the near term. 

Support levels: 20,833 20,794 20,738

Resistance levels: 20,899 20,950 21,017

FTSE 100

The FTSE 100 lost 4 points this Wednesday, ending the day at 7,334.61. Local shares were unable to attract buying interest, despite UK Treasury chief Philip Hammond outlined the budget, focused on boosting infrastructure spending. Construction and material-related equities outperformed, while financials recovered some of the ground lost earlier this week, although gains were offset by a strong decline in the mining-related sector. Worldpay Group was the best performer, advancing 4.84%, while Randgold Resources topped losers' list, shedding 2.30%. The index pared losses a few points away from its 20 DMA, this last at 7,306 for this Thursday, whilst the Momentum indicator remains lifeless around its 100 level and the RSI indicator continues retreating from overbought levels within positive territory. Shorter term, the 4 hours chart shows that technical indicators resumed their declines within bearish territory, whilst the index held below a bearish 20 SMA, maintaining the risk towards the downside in the short term. 

Support levels: 7,306 7,265 7,238 

Resistance levels: 7,345 7,397 7,420 

DAX

European equities advanced at the beginning of the day, but ease from their highs into the close, ending the session pretty much flat. The German DAX closed 1 point higher at 11,967.31, with sentiment undermined by Chinese trade balance data, showing the first monthly trade deficit in over three years. Within the DAX, Adidas was the best performer, adding 9.03% after the company projected a revenue growth between 11% and 13% and net income growth of up to 20% for this 2017. Banks recovered from the recent setback, with Commerzbank adding 0.99% and Deutsche Bank closing 0.56% higher. In the daily chart, the index remains above a bullish 20 DMA, currently at 11,877, while technical indicators remain flat, but within positive territory. In the 4 hours chart, the index was unable to recover above a bearish 20 SMA, whilst the Momentum indicator remains neutral and the RSI indicator turned lower around 46, limiting chances of a stronger recovery as long as the index remains below 12,000. 

Support levels: 11,920 11,877 11,832

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

Nikkei

The Nikkei fell 89 points or 0.47%, to close at 19,254.03, down for a fourth consecutive session. The decline came as a result of speculative interest locking profits following last week's rally, ahead of the upcoming ECB monetary policy meeting and the US monthly employment report. The benchmark recovered some 100 points in after-hours trading, as the USD/JPY pair advanced firmly beyond ¥114.00 following strong US employment figures. Most members closed in the red, with Isetan Mitsukoshi Holdings being the worst performer, down by 3.96%. The daily chart for the index shows that it´s sill stuck around a horizontal 20 DMA, and well above a bullish 100 DMA, this last limiting chances of a steeper recovery. Technical indicators in the mentioned time frame have turned horizontal within neutral territory, reflecting the absence of directional strength present since the week started. In the 4 hours chart, the index has been unable to advance beyond a still bearish 20 SMA, currently around 19,370, whilst technical indicators are also flat within neutral readings. 

Support levels: 19,310 19,268 19,299 

Resistance levels: 19,370 19,420 19,478

Gold

Spot gold fell to $1,206.55 a troy ounce, its lowest in five weeks, to close the day around $1,209.60. News that the US private sector added far more jobs than expected last month reinforcing the case of a rate hike next week. The commodity has now retraced the 38.2% of the December/February recovery, and remains biased lower according to technical readings, with the next relevant support at 1,197.80, the 100 DMA. In the daily chart, technical indicators present sharp bearish slopes within negative territory, supporting a continued slide on a break below the mentioned daily low. In the shorter term, and according to the 4 hours chart, the bright metal is also biased lower, as the price stands now far below a bearish 20 SMA that has crossed below the 100 and 200 SMAs, whilst technical indicators consolidate within oversold readings, with no certain directional strength. 

Support levels: 1,206.55 1,197.80 1,188.20

Resistance levels: 1,214.20 1,221.70 1,230.00 

WTI Crude Oil

West Texas Intermediate crude oil futures plunged to 50.04, the lowest in three months, ending the day around $50.20 a barrel. The commodity plunged this Wednesday after the EIA reported the ninth consecutive weekly advance that drove inventories to record highs. The US added 8.2 million barrels last week, lifting total commercial inventories to a record level of 528.4 million. News that oil production from Waha Oil Co, in Libya could be interrupted due to clashes in the country have barely affected oil. The bearish breakout of this year's range has exacerbated the slide, and technical readings in the daily chart support some additional slides, as the price has broken below its 100 DMA for the first time since late November, whilst technical indicators present sharp bearish slopes within negative territory. In the 4 hours chart, technical indicators head south pretty much vertically in extreme oversold territory, overreacting to the decline amid the preceding tight range. The decline stalled at the critical psychological support of 50.00, and large stops should lie below the level, which means that if those got triggered, the bearish movement will likely continue. 

Support levels: 49.60 48.85 48.20

Resistance levels: 50.80 51.50 52.20

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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.