April 13 Daily Market Analysis

Daily Market Analysis

EUR/USD

The pair spiked higher on Thursday to print a fresh 1-week high at 1.3211 as the common currency gathered some momentum from higher than expected French CPI and Eurozone’s industrial production while the greenback weakened on negative unemployment data. Technically, The price finally managed to break through short-term resistances and recent highs above 1.3155 which helped to push higher above 1.3200 key barrier. The 100&200 4H-MA played to cap upside, therefore it should serve currently as an immediate resistance along with Fib 50% of 1.2973-1.3485 bulls run around 1.3230. Breaking above the latter would expose 1.3300 major barrier followed by 1.3320 where the cross should test the declining trendline projected from yearly highs. On the other hand, The rising trendline off 1.2625 Jan lows should turn its role to a near support. Keeping short-term bulls in play and confirming the last bullish breakout is subject to this threshold’s ability to hold.

GBP/USD

The Cable was firmly up for a second consecutive day, trading close to a one-week high at 1.5984 on the back of a broadly weaker U.S. dollar and higher risk-sensitive currencies. The pound after stalled for a while around its previous highs of 1.5936 as was weighed down earlier by higher than estimated UK trade deficit, finally managed to track Euro’s performance both in rally and retreating in subsequent dealings. Looking on the 1H chart, It can be noted the important support offered by the 20 MA line (currently around 1.5943). Also, there is a series of compact lows around 1.5930, which is also 50% retracement of 1.6060-1.5803 fall. Holding above the mentioned supports should keep short-term bulls in play for additional advance, initially toward 1.600 psych level, with a loss here to expose yearly highs above 1.6060. Below the latter we have another support area between 1.5890-1.5900 which comprises 100&200 MA along with 38.2% retracement of the mentioned bearish swing. Loss of these supports bring bears back in control with downside risks extends to 1.5800 prices.

AUD/USD

The pair bounced higher on Thursday’s trades to close steady above 1.0400 barrier for the first time in 10 days. The bullish bias dominated the price action since the Asian hours, supported by a strong upbeat reading for Australian jobs figures in March. The cross after peaked an intraday high at 1.0447 turned mildly down on some profit taking, also the Aussie traders will remain cautious ahead of Chinese Real GDP data for the Q1 which should be a challenging factor for the market sentiments toward the commodity currency given that China is the first trading partner for its economy. Technically, The pairing is closer to test 1.0355 monthly high where the latest bearish run projected from. Above which would shelve short-term bearish scenario and open a path for further correction of wider falling trends. Next resistances situated at 1.0477-1.0492 which is 200 4H-MA and 61.8% retracement of 1.0635-1.0224 decline. On the other hand, Below 1.0400-1.0420 support area badly weakens the recent corrective structure and exposes previous highs around 1.0355 with a violation here to bring back bears fully in control.

USD/CHF

The pair suffered its biggest slump for the month after lost the ground sharply on Thursday, hitting its lowest level since early April at below 0.9100 barrier as the greenback lost the steam across the board on easing risk aversion and strengthening QE forecasts. Though, the cross turned slightly higher afterwards, to regain prices above 0.9100 but the moves still on a corrective territory as no enough momentum yet to suggest ability to regain previous key supports above 0.9140 which is extremely needed to retrace last damage in short term bullish charts. Consolidating recent losses at current levels without convincing attacks to upside, suggests further easing and below recent lows of 0.9089, downside risks go directly toward 0.900 psych ground.

Commodities

Precious metals inched higher on Thursday’s session with gold prices hitting its best levels since 3rd April at 1680$, buoyed mainly by a softer greenback which came under selling pressures following higher than expected jobless claims for the past week. The negative data boosted worries over US recovery health particularly it comes after less than a week from Friday’s payrolls report which showed non-farm jobs of March grew with the slowest pace in almost five months, well below 200K psych level. Moreover, this batch of downbeat macroeconomic data if extended, it should revive hopes over further easing measures from the Federal Reserve to simulate economy, though it remain an initial signal for labor market weakness. The anticipating Quantitative easing typically benefits gold given that its inflationary effects. Therefore, it lifts its appeal as an alternative investment, a store of value and an inflation hedge. Technically, The metal currently is struggling with a key resistance barrier around recent highs of 1680$. It represents 55-Day MA as well as 38.2% retracement of the last bears run between 1790$-1612$. A clearance of the latter should open up significant resistance barriers at 200 DMA around 1694$, then Fib 50% of the said rally at 1700$ key handle.

Gold for June delivery rallied $20.30, or 1.2%, to settle at $1,680.60 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery rose $1, or 3.2%, to $32.52 an ounce.

Oil prices added decent gains yesterday to prints fresh weekly highs above 104$ level on the back of a weaker US dollar which edged strongly lowers against major rivals, weighed by better sentiments toward the shared currency after the ECB showed its readiness to provide help for troubled nations by resuming its bond purchases which helped Spanish yields to decline slightly after briefly breached above 6% barrier earlier on the week. The American currency weakness also provided further support after got a strong hit by higher jobless claims which boosted expectations over QE possibilities. The softer US dollar is often supportive for the crude bulls as typically make it with other dollar-dominated commodities cheaper for buyers using other currencies. However, The crude faced mild selling pressures after climbed above 104$ key handle, forced it to retreat below to trim early gains as downbeat jobs data which weakened the dollar also triggered worries over economic recovery outlook which in turn play against demand strength forecasts. Meanwhile, Oil’s traders will often keep any further advance in check as talks between Iran and global powers are supposed to calm supply concerns, especially it comes along with persistent climbs in US stockpiles.

WTI Crude oil for May delivery advanced 94 cents, or 0.9%, at $103.64 a barrel on the New York Mercantile Exchange. Brent oil for May settlement gained $1.53, or 1.3 percent, to $121.71 a barrel on the London-based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks soared for the second consecutive session on Thursday’s trades as a new wave of corporate earnings boosted hopes over an upbeat results session. Following Alcoa’s nice profits on Wednesday, Search giant’s Google Inc. reported a 61% jump in first-quarter profit on strong sales which propelled the overall market up. Yesterday’s gains came despite a strong drawdown of unemployment positive trend after the initial jobless claims rose in the preceding week a bit higher than expected. Furthermore, Wall Street’s investors remain comfortable on easing tensions in sovereign credit markets in Europe which followed supportive hints by a key ECB official at the possibility of more bond buying to help indebted euro zone member Spain. Generally, there was a better risk-on mood on Thursday which allowed to retrace the steep losses registered earlier on the week and though American data lost its common role as a catalyst, but improved sentiments over Eurozone’s stability as well as positive expectations about Chinese GDP figures which is due to be released today, helped to push the stocks higher on the last dealings.

The Dow Jones industrial average rose 181.1 points, or 1.4%, to 12,986.5.

The S&P 500 index advanced 18.86 points, or 1.4%, to 1,387.57.

The Nasdaq composite Index climbed 39.09 points, or 1.3%, to 3,055.55.

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