USD plummets to new lows

EUR/USD

Investors resumed dollar's selling this Tuesday, and the American currency plummeted to fresh multi-month lows against most of its major rivals. The catalyst behind this move was a continued recovery in oil's prices, which fueled risk appetite, and therefore resulted in the USD plummeting. The EUR and the JPY underperformed due to their condition of funding currencies, but the common currency advanced up to the 1.3780 region and closed the day near its high, with solid gains.

Data came in mixed in Europe, and negative in the US, adding to the USD bearish case. The German ZEW survey showed an increase in the economic sentiment for the country, and the region, in April, although the assessment of the current situation fell, indicating that fears of a global economic slowdown persists. US housing data took a turn for the worst, as housing starts fell more than expected in March, plummeting 8.8% to 1.089 million, the lowest since October, whilst building permits declined by 7.7% to a 1.086 million annualized rate.

As for the technical outlook of the EUR/USD pair, the lack of upward momentum is present ever since the day started, and continues ahead of the Asian opening, as in the 4 hours chart, the technical indicators hold well above their mid-lines, but with no directional strength. In the same chart, the price recovered above a now bullish 20 SMA, suggesting the rally may extend during the upcoming sessions, particularly if markets' mood remains positive. Nevertheless, seems unlikely the market will dare to push the pair beyond the 1.1460 region ahead of the ECB economic policy decision, next Thursday, with speculators expected to take profits out of the table on approaches to this last.

Support levels: 1.1335 1.1280 1.1235

Resistance levels: 1.1420 1.1460 1.1500

USD/JPY

The American dollar gained against its Japanese rival this Tuesday, although the pair trimmed most of its daily gains early in the US session, weighed by  tepid US housing data. The USD/JPY pair rallied up to 109.48, and the following retracement held above the 109.00 level, as aggressive selling interest has been reduced on fears that the BOJ will act sooner or later to prevent the local currency from appreciating further. The Japanese Central Bank will have its monthly meeting by the end of April, and speculators have started pricing in some form of extension of the ongoing facilities. Nevertheless, there's a long run ahead before the pair can turn long-term bullish, as it will need to advance beyond 115.00 to confirm dollar's comeback. Short term, the 1 hour chart shows that the price has bounced from a horizontal 100 SMA, whilst the technical indicators have lost directional strength around their mid-lines, following a strong correction from overbought levels and erasing the preceding bearish divergence. In the 4 hours chart, the technical indicators have turned slightly lower within positive territory, whilst the price remains well below a bearish 100 SMA, currently around 110.10, indicating  that the downward risk is still present.

Support levels: 109.00 108.65 108.20

Resistance levels: 109.50 110.00 110.40

GBP/USD

The GBP/USD pair advanced to a fresh April high of 1.4418, with the Pound buoyed ever since the day started as high yielders were back in vogue. The pair picked up pace early Europe, following the latest Brexit polls showing that those voting to remain within the EU are taking the lead, and accelerated further higher after US poor macroeconomic figures. The rally stalled at a major static resistance, a daily descendant trend line coming from February's high which stands around 1.4410, but so far, the pullback has been quite shallow, suggesting bulls are willing to break it towards the upside. Intraday technical readings are losing upward strength near overbought levels, rather reflecting the latest short term consolidative stage than suggesting that the upside is exhausted, but particularly referring to the 4 hours chart, the 20 SMA has rallied below the current level, surpassing its previous highs, and is currently aiming to cross above the 200 EMA, also anticipating the pair may rally further. If the market is able to push the pair through the trend line, the immediate target comes at 1.4458, March 30th high, whist additional gains beyond this last can take the  pair up to the 1.4510 region. 

Support levels: 1.4350 1.4315 1.4260

Resistance levels: 1.4410 1.4460 1.4510

AUD/USD

The Australian dollar extended its rally to a fresh year-high against its American rival, with the AUD/USD pair establishing above the 0.7800 level for the first time since June 2015. The release of the RBA meeting Minutes presented a twist, as the Central Bank stated that it is "appropriate for monetary policy to be very accommodative” with that "very" appearing for the first time this year, an implicit warning over current Aussie strength, as Governor Stevens has already warned  that policy makers are not comfortable with the latest advance of the local currency. The technical outlook is neutral-to-bullish in the 1 hour chart, as the technical indicators have turned well above their mid-lines, although the 20 SMA maintains a strong bullish slope below the current level. In the 4 hours chart, however, the pair presents a strong upward potential, as the Momentum indicator maintains a clear upward slope near overbought territory, and the RSI indicator heads north around 70, all of which supports some further gains. Retracements towards the 0.7720 region will likely attract buying interest, without affecting the ongoing bullish trend.

Support levels: 0.7790 0.7750 0.7720 

Resistance levels: 0.7820 0.7865 0.7905

Dow Jones

Wall Street was unable to follow the lead of overseas share markets, ending the day mixed, with the DJIA up by just 0.27% to close at 18,053.60 and the S&P adding 6 points to end at 2,100.80, but the Nasdaq down by 0.40% to 4,940.33, this last weighed by weakness in the tech stocks' sector. Oils' recovery supported the energy-related sector, limiting losses in US shares. As for the technical outlook of the DJIA, the daily chart shows that the Momentum indicator has posted a tepid bounce from its 100 level, while the RSI hovers near overbought readings and the index remains well above a bullish 20 SMA, all of which supports a continued advance for this Wednesday, particularly if the positive mood among worldwide investors persists. Shorter term, the 4 hours chart also points to a continued advance as the technical indicators resumed their advances after correcting oversold readings.

Support levels: 17,983 17,914 17,826

Resistance levels: 18,101 18,171 18,244

FTSE 100

The FTSE 100 added 52 points and closed the day at 6,405.35 a fresh 2016 high, fueled by a continued recovery in oil prices as Kuwait's strike curbed  output. The collapse in the commodity at the beginning of the week has hardly affected the London benchmark that slowly, but steadily grinded higher this April, but the recent recovery in crude, indeed fueled the advance. The mining sector also benefited from oil's comeback, with Anglo American advancing 8.49% and Glencore 7.50%. Trading at levels last seen in December, the Footsie is poised to continue advancing, given that in the daily chart, the 20 DMA has extended its advance further above the 100 DMA and is about to cross the 200 DMA with a strong upward slope, whilst the RSI indicator heads north around 66. In the 4 hours chart, the 20 SMA has accelerated its advance and leads the way higher, as the RSI indicator heads north around 73. The Momentum indicator in this last time frame maintains a neutral stance, heading nowhere around its 100 level, rather reflecting the slow pace of gains than suggesting the index can't advance further.

Support levels: 6,370 6,306 6,243

DAX

European stocks closed broadly higher, tracking the positive mood in Asia, and supported by oil's outperformance, with the German DAX adding 2.27% or 234 points, to end the day at 10.349.59, the highest close since early January. But it was not only risk appetite which boosted the index, as, ahead of the ECB meeting this Thursday, speculation arises over the possibility of a QE extension coming from the Central Bank.  The benchmark has closed the day above its 200 DMA for the first time since December 2nd, and the technical picture favors additional gains, as in the daily chart, the technical indicators maintain their bullish slopes within bullish territory, and both, the RSI and the Momentum, stand at fresh monthly highs. Shorter term, the 4 hours chart shows that the RSI has turned horizontal at 82, while the Momentum indicator also lacks directional strength within positive territory. Also, the 20 SMA has accelerated its advance below the current level and after crossing above the 100 and 200 SMAs, supporting the ongoing bullish trend.

Support levels: 10,361 10,278 10,223

Resistance levels: 10,420 10,497 10,569

Nikkei

Asian share markets soared as risk-on came back, with the Nikkei up by 3.68% or 620 points to close the day at 16874.44. The Japanese benchmark continued advancing in electronic trading as European equities also up roared, and trades above the 17,000 level ahead of the Asian opening. A sharp recovery in oil prices alongside with a falling JPY fueled demand of local equities, with export-related equities gaining the most after tumbling earlier in the week. Sony  added 6.7%,  Toyota surged by 3.6% and even bank shares advanced, with Mitsubishi  UFJ Financial Group being the biggest winner by adding 6.9%. Technically, the daily chart for the index shows that it remains below a mild bearish 100 DMA, currently around 17,281, whilst the technical indicators head north, the RSI at 59, anticipating a continued advance for the upcoming session. In the 4 hours chart, the index is well above its moving averages, the Momentum indicator remains flat well above its 100 level, while the RSI indicator consolidates near overbought territory, reflecting the latest absence of volume, rather than suggesting an upcoming decline.

Support levels: 16,977 16,895 16,807

Resistance levels: 17,115 17,202 17,281

Gold

Gold benefited from dollar's soft tone this Tuesday, with spot rallying up to $1,256.61 a troy ounce, and ending the day solidly higher, above  the 1,250 level.  The bright metal gained, despite the ongoing risk appetite, not only because of broad dollar's weakness, but also because of a sharp recovery in Silver that surged to a fresh 10-month high, dragging base metals higher. The recovery, however, stalled around a daily descendant trend line coming from this year high, maintaining the commodity within a familiar range. In the daily chart, the technical indicators have recovered from their mid-lines and present strong upward slopes within positive territory, as the price extended above a still flat 20 SMA, suggesting the upside is favored, but without  enough strength to confirm a rally. Shorter term, the 4 hours chart shows that the price is currently developing above its moving averages that anyway lack clear directional strength, whilst the technical indicators have turned south within positive territory, all of which suggests that spot needs to extend beyond last week highs of 1,262.60 to be able to rally further.

Support levels: 1,246.10 1,237.80 1,229.05

Resistance levels: 1,256.60 1,262.60 1,271.80

WTI Crude Oil

Crude oil prices recovered further on Tuesday, with US futures up to $42.86 a barrel to finally end above $ 42.00 by Wall Street's close. The commodity got a boost from a strike by Kuwait's oil workers, who downed tools for a third day in-a-row to protest against government plans to cut wages. The strike implies a reduction of 1.5 million barrels in output daily basis, somehow helping ease the worldwide glut, at least temporarily. The commodity has resumed its advance after flirting with its 200 DMA at the beginning of the week, and now approaches its year high, and according to the daily chart, chances are towards the upside as the technical indicators have also bounced from their mid-lines, and the Momentum indicator retains the bullish tone within fresh monthly highs. In the 4 hours chart, the technical indicators have lost upward strength after crossing their mid-lines, and lack directional strength at the time being, rather as a consequence of the latest retracement than a signal of a downward continuation ahead. And while the commodity is hardly expected to rally too far away, $45.00 a barrel seems now likely for the upcoming days.

Support levels: 39.55 38.80 38.20

Resistance levels: 40.40 41.20 41.90