April 11 Daily Market Analysis

Daily Market Analysis

Daily market analysis by OptionRally

EUR/USD

The pair after rallied to fresh weekly highs earlier on Tuesday’s session failed to sustain gains above 1.3100 barrier and retreated sharply on renewed worries over Eurozone’s debt crisis with Spanish poor auctions still the main focus and propeller for risk-off environment. The yields on Spain’s 10-year bonds spiked to 5.9%, while Italian borrowing costs added to bearish sentiments after reached fresh highs as well. Technically, we are still about a rangebound trading theme with the cross caught between Fib 50% of 1.2623-1.3485 bull run where used to stall in a bullish signal. But also the broken rising trendline near 1.3143, recent high still holds to cap several upside attempts while 38.2% retracement barrier adding more support for the mentioned resistance at 1.3155. Clearance of the said range borders could strength moves either toward the main near-term support area at 1.2970-1.3000 and on the other side toward the resistance zone 1.3200-1.3250.

GBP/USD

The Cable, after printed a fresh 5-session high at 1.5929 in early Tuesday trading, lost the ground and has been declining ever since till managed to bottom out at 1.5823 where found renewed buying interest, helped to recover but within the negative territory. The inability to reclaim 1.5900 barrier with a sustained close, leave the pound vulnerable to growing weakness, which typically follows the short-lived bounces. The 1.5800 ground still acting as the main support while 200 Day-MA around 1.5820 serves as an initial barrier. Breaching below this price floor may sideline short-term bulls and bring bears fully in play toward discovering a new support ground which may be expected at 1.5769, key pivot and 4H low. Below which to signal further easing and exposes 1.5700 prices. On the other hand, the 1.5930 level which represents 50% retracement of the latest bearish run projected from yearly highs may shelve downside developing at least for another upswing toward 1.6000 psych handle.

AUD/USD

The pair traded in a similar fashion along with other risk-correlated currencies, opened on a positive territory in the wake of some upbeat Australian and Chinese data which helped the commodity currency to inch higher and posts a fresh weekly high at 1.0355. Afterwards, tuned sharply south as jitters over Eurozone’s fiscal health dominated markets` action and pushed the cross down, currently heading toward recent lows near 1.0240. Technically, the cross is about to retest crucial support levels at mentioned lows which contained the bearish moves struck after a steep fall below 1.0400 floor, with a loss here to end the sideways structure and favor getting into the bearish market. Looking on the daily chart, we have another low at 1.0230 to invalidate the potential breakdown and confirm basing attempt. Otherwise, Subsequent easing below the latter would open up yearly lows around 1.0140 and traveling south toward the parity may not be excluded within the week. On the other hand, the falling moving averages on the 1H chart still able to halt bullish attempts with 20 MA offers initial resistance at 1.0290 followed by 200 MA, currently around 1.0330.

USD/CHF

The pair soon after slid to fresh weekly lows at 0.9144 on Tuesday’s early trades before bounced strongly erasing intraday losses as the Greenback strengthened across the board, as growing worry surrounding fiscal situation in Europe and economic conditions in china prompted investors to flock to the relative safety of the reserve currency. Technically, the short-term positive tone still dominating but the price still unable to translate holding the positive territory into a clearance above the recent range ceiling of 0.9220 to expose significant resistance around 0.9300 barrier. As long as above 0.9140 support line, the bullish outlook would remain favored but if remained stalling below current highs, bulls may have to await another period of sideways range trading or possibly open way for further retracement toward 0.9100 to gather enough momentum while a break to confirm a near-term topping.

Commodities

Precious metals ended a volatile Tuesday’s session on decent advance after hovered between gains and losses. Gold prices opened on a higher note supported be weaker greenback but trimmed the early advance and moderated strongly to a fresh 3-day lows barely above 1630$ level as the American currency spiked on European fiscal concerns which brought Spanish yields closer to 6%, the highest level in four months . However, the yellow metal reserved the course on subsequent dealings despite risk-trades and dollar strength persisted to peak its highest points in more than a week above 1660$ barrier. The bullion looked as though it managed to regain its lost appeal as a safe haven beside the US dollar and bonds. That makes sense after the stability over past weeks with the prices failed to extend selloff and based above 1600$ ground. Nevertheless, it should take further time to confirm such speculation as Gold already gained some attraction and safe haven flows in the course of last six months but the gains and the appeal couldn’t be sustained in a longer run. Currently the price is testing the near-term resistance offered by the declining trendline that projected from February high of 1791$ around 1660$ mark. Confirming the breakout with a convincing close could strength the trading tone and bring short term bulls in play for a deeper correction toward 1700$ key barrier.

Gold for June delivery added $16.80 to end at $1,660.70 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery gained 15 cents, or 0.5%, to end at $31.68 an ounce.

Oil prices came sharply off weekly highs that hit earlier yesterday near 103.00$ level to dip sharply to a fresh 3-month low at 100.66$ a barrel on the spot market. The crude came under heavy selling pressures following unexpected surplus in China’s trade balance due to a drop in the Asian nation’s imports which was widely seen as an additional signal of slowdown in the world’s second largest economy, weighing on global demand outlook beside contractionary conditions in Europe and clouded outlook over US recovery, particularly after Friday’s dismal payrolls report. Adding to bearish sentiments, The Spanish borrowing costs continued to edge higher on clouded fiscal situation of its public finances which could further pressures on the troubled Eurozone’s efforts in its quest to break the cycle of recession. The strengthened US currency was also at play and decreased demand on dollar-priced commodities across the board.

WTI Crude oil for May delivery lost $1.44, or 1.4%, to end at $101.02 a barrel on the New York Mercantile Exchange. Brent oil for May settlement dropped $2.79, or 2.3 percent, to end the session at $119.88 a barrel on the London-based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks suffered its steepest daily losses in more than five months with all three major indexes fell with more than 1.5% on Tuesday’s session, propelled by deepening worries over Eurozone’s financial health after Spanish and Italian bond yields surged to its highest since early December. Wall Street tracked similar performance in European bourses which ended under much selling pressure on concerns. Spain’s austerity measures provides little inspiration to investors which currently arguing the overall debt crisis may flare up if the troubled nation failed in fixing its finances and required a bailout package on the Greek model. Furthermore, Speculation of a weak earnings season fueled selling interest and kept bulls on the sidelines until seeing the actual reports which may bleed the wounds if company profits contracted in the first quarter to end a nine-quarter winning streak as widely expected, particularly after the support from the nation’s macroeconomic data was taken partially out on negative jobs figures in March.

The Dow Jones industrial average closed down 213.66 points, or 1.7% to 12,715.93.

The S&P 500 index declined fell 23.61 points, or 1.7%, to close at 1,358.59.

The NASDAQ composite Index declined 55.86 points, or 1.8%, at 2,991.22.

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