April 17 Daily Market Analysis

Daily Market Analysis

Daily market analysis by OptionRally

EUR/USD

The pair erased losses on Monday, coming off its lowest levels in nearly two month that hit earlier at 1.2993, as the release of U.S. retail sales painted a bit better risk-on market and helped shared currency to regain the positive territory for the day after concerns over high Spanish borrowing costs weighed sharply down within early trades. The market sentiments may remain cautious ahead of Spain’s auction bills tomorrow, particularly after yields edged up to a multi-month high of 6.15% yesterday. Technically, the bears weren’t decisive on Monday after the bearish attempt was contained well below 1.300 psyche level and sparked a strong rally. This may be due to the price tested a strong range floor of medium term that held since late January. The 38.2% retracement barrier of the latest descend off 1.3384 to aforementioned lows offered the immediate resistance at session’s high of 1.3146.While the most important resistance will be provided by 100&200 4H-MA (currently around 1.3190), which managed to cap upside action last week and caused recent weakness. As long as holding below the latter, risk is seen to the downside and fresh easing to be followed, while above to suggest further corrections initially toward recent high of 1.3211, then Fib 61.8% level of the mentioned bears swing at 1.3235.

GBP/USD

The Cable reversed Monday’s losses strongly and bounced from a fresh 1-week low of 1.5817 hit earlier in the European session to push toward fresh daily highs above 1.5900 key barrier after regained the 1.5850 resistance area which several times being rejected. The pound’s advance was propelled by better-than-expected US retail sales that improved sentiments around and sent the greenback declining broadly. Technically, the 1.5800-1.5820 price zone has proved to be a significant support area after helped price to base and enforced bears to lose control on several dips, which in turn formed a triple low pattern on the 4H charts to keep rallies initially expected on coming potential declines. Hence, Holding above the mentioned reassess the market as sideways or bullish but bringing bulls back in play requires to regain prices above 1.600 handle to refocus yearly highs before exposing the longer run resistance barriers between 1.6100-1.6170. The failure to break above recent high at 1.5983 would signal the continuation of consolidation phase off 1.5601 March low with further ups and downs are on the cards.

AUD/USD

The pair opened Monday solidly lower, weighed by softer risk appetite while the greenback strength was seen across the board. The pairing plunged to near the 1.0300 key level where found support and regained the upside following better than expected retail sales in the US that helped the cross to climb above the opening levels. Technically, the pair has traded a broad range between 1.0300 and 1.0380 so far within the context of a sideways market. The 1H chart shows an escalating bullish momentum as after 200 HMA contained the daily dip along with 61.8% retracement of the latest bulls run off 1.0223 to 1.0455, the price also formed a short-term base around 1.0335 in the recent dealings. Thus, a break below the mentioned minor floor would signal fresh weakness initially toward recent lows at 1.0300, which a break below to weaken the corrective structure and risks an end of recovery phase. On the other hand, Clearance of the nearest 4H high at 1.0384 is required to ease impact of lower highs pattern and to strengthen the bullish momentum along with the likelihood of fresh attacks toward recent peaks around 1.0455.

USD/CHF

The pair started the week on a higher note to print fresh monthly highs at 0.9250 where the key resistance pivot held and pushed the cross sharply lower with more than 100 pips off the session’s peak late in the day after came under selling pressures following releases of upbeat figures for economic indicators of the US. This weakened the greenback across the board. Technically, the 4H chart shows some support factors with the 100&200 MA along with Fib 38.2% retracement of 0.9330-0.9002 fall, managed to contain declines so far at Monday’s low 0.9138. Nonetheless, only a sustained daily close back above 0.9180-0.9200 price area could ease downward pressures and keep the bullish resumption scenario on hold for a potential recovery into our upside target zone 0.9250-0.9300. Inversely, extending losses below mentioned supports would confirm the bearish reversal and initially exposes 0.9112 low before targeting supports below and around 0.9100 to resume the downside path.

Commodities

Precious metals traded mostly lower on Monday on the back of a strengthened greenback but managed to trim declines during the American session after impressive retail sales report buoyed risks mildly and pushed the US dollar to give up part of early gains. Gold prices opened on a negative territory along with other risk-sensitive assets that yellow metal tended to track over recent weeks. Renewed concerns about Eurozone’s debt crisis still dominating investors` sentiments whom take daily clues from sovereign debt market. Spanish yields breached above 6% level on Monday, extending the upswing sparked last week as reports showed a split stance between ECB officials on bond purchases resumption which looks likely to be the only solution to force government borrowing costs to ease off its current unsustainable levels. Gold reaction to negative developments in Europe was typically to the downside as panic selling on prevailing debit crisis to larger economies prevent the precious metal to take advantage from any safe-haven demand, while supports the US currency instead. Later on the session, the bargain hunters stepped in to buy the weaker prices after the dollar fell out of favor again on positive American data which triggered a better risk-on environment.

Gold for June delivery fell $10.50, or 0.6%, to $1,649.70 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery declined 2 cents, or 0.1%, to $31.37 an ounce.

Oil prices bounced modestly to move off session’s lows that hit earlier below 102$ level amid a broader risk-off trades. Mixed US economic data kept the near-term outlook substantially neutral but at least it helped ease risk aversion mood that dominated sentiments during the Asian and European hours on rising worry over Spain and other Eurozone’s fiscal stability which weighed down on commodity markets across the board. US retail sales rose last month a solid 0.8%, both on its headline and core reading, comparing to expectations of 0.4% and 0.6% respectively. However, Empire state manufacturing index did worse than expected at 6.6 in March, down from February’s release which was 20.21. Though the data wasn’t much impressive but at least revived hopes over seeing a reversal in the downbeat tone that painted jobs data in the last week, which in turn may brighten prospects of the demand outlook expansion in the world’s largest consuming economy. Meanwhile, The Istanbul summit between Iran and a group of six global powers including the U.S over Tehran’s controversial nuclear program, looked as though it had made a progress after a key American official described the talks as “constructive and useful,” According to delegates that attended the P5 +1 summit, they’ve agreed to meet again for a more in-depth meeting on May 23 in Baghdad. These developments along with Saudi assurances to cover any supply shortage coming from Iranian oil loss should play as a significant depressing factor in the coming sessions. Binary traders could expect a freefall in oil prices when market’s pricing gathers enough momentum.

WTI Crude oil for May delivery was down 81 cents, or 0.8%, at $102.83 a barrel on the New York Mercantile Exchange. Brent oil for June settlement dropped $2.53, or 2.1 percent, to $118.68 a barrel on the ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks ended mixed on Monday’s trading session with the Dow modestly up on improved sentiments due to upbeat economic data while other two major indexes shed on persistent slip in the shares of Apple and Google for the fifth and second straight session respectively. Sentiments were lifted mildly in early trades as data showed US retail sales increased 0.8%, in March, , building on the previous month’s strong gain while a separate report showed Empire state manufacturing index moderated much more than anticipated from 20.21 to 6.6 in March. Although the data revealed a mixed picture of the country’s economic recovery but it was largely priced in positively especially after last week negative payrolls figures which came coincided with the Wall Street’s worst week of the year. The bullish markets excluded NASDAQ and S&P 500 after tech shares suffered their biggest one-session point drop. On Tuesday’s session, Investors should eye developments in Europe especially the fresh bill auctions with Spanish bonds to get the main attention. The US government is also anticipated to release some housing reports which could allow for further upside retracement if came better than expected or at least in line with market estimates.

The Dow Jones industrial average ended up 71.82 points, or 0.6%, at 12,921.41.

The S&P 500 index ended down 0.69 point, or 0.1%, at 1,369.57.

The NASDAQ composite Index fell 44.22 points, or 1.5%, to 3,011.33, leaving it down 2.3% from last week’s close.

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