April 18 Daily Market Analysis

Daily Market Analysis

Daily market analysis by OptionRally

EUR/USD

The pair extended gains on Tuesday’s morning trades to print a fresh weekly high at 1.3171 on a modest optimism surrounding Eurozone’s debt troubles after Spanish bond auctions came better than expected along with German ZEW confidence survey. However, the technical picture still largely unchanged as the cross remain ranging below main short-term resistances offered by 1.3190-1.3211 price zone which comprises 200&100 4H-MA along with 12 April high and Fib 50% of latest bearish run off 1.3384. Hourly studies maintain a bullish tone which expected to persist as long as the price steady above 1.3100 key barrier and 200 HMA as well. Breaking through the mentioned barriers could take the pair up to 1.3236, 61.8% retracement of the mentioned fall, then 1.3250 previous support while aggressive upward moves may target 1.3300 major handle. On contrary, below recent supports downside risks may go toward retesting 1.300 psych level which could be a bullish scenario if the throwback respected as a support and turned higher with a stronger momentum.

GBP/USD

The Cable took positive cues from Eurozone’s developments which showed a slight dip in Spanish borrowing costs. Also, UK inflation figures made a tiny rise in March after a long declining streak since Q4 2011 which may ease the central bank ultra-loose approach but Today’s MPC minutes would be a better indication for such assumption. Technically, the price made a new bulls trap after surged to a fresh 3-session high at 1.5969 but once again couldn’t extend further and retreated mildly. The 20 HMA around 1.5915 currently serves as an immediate support but the a cluster of moving averages along with Fib 38.2% barrier of 1.6060-1.5803 fall would offer the main support around 1.5900 key level. Loss of the latter would weaken the short-term positive structure and may signal further easing initially toward 1.5850 mark. On the other hand, If the price pushed back above recent double highs but only with a convincing close, it could bring bulls back in play to retest prices around and above 1.6000.

AUD/USD

The pair opened Tuesday’s session on a higher note, buoyed by a less dovish policy statement that was issued from the RBA and reduced possibilities of a near cut in interest rates. Solid performance in equity and commodity markets also boosted the Aussie sentiments. Nonetheless, the cross lost ground in subsequent dealings to give up 1.0400 barrier but still able to halt further bearish developments so far. The 20 HMA along with 38.2% retracement of last uptrend off 1.0224 low provides initial support around 1,0360, below which to expose lows above 1.0300 for renewed attacks but we may expects lower bases in this scenario. Inversely, if the mentioned support held against the current pullback we may expects further bullish attempts toward the main upside target at 1.0455 recent high.

USD/CHF

The pair was a caught in a tight range between 0.9124-0.9189 most of the day but biased largely to the downside as fresh weakness in US dollar exchange rates dampened latest rally attempt after the cross confirmed a near-term topping at 0.9250 key pivot. The 61.8% retracement of the latest bulls run off 0.9002 to mentioned highs at 0.9120 near Tuesday’s low, played to provide a relief after contained the daily dip and helped price to retrace higher. While 200 HMA offered the resistance to cap upside so far around 0.9175 key pivot. We still looking for a sustained breakthrough these short-term barriers for a clearer direction, at least it may suggest further pushes towards testing the main sideways range barriers which lie at 0.9220 to the upside and 0.9090 at lower prices.

Commodities Precious metals traded similarly to the previous session action after dipped to fresh lows before managed to bounce back toward the opening levels. Gold prices were mostly biased to downside on early trades as market participants remained cautious ahead of Spanish bill auctions and German business confidence data. The European data, however, came better than anticipated after Spain’s bonds found a solid demand while German ZEW indicator did better than expected. Some technical selling occurred in early American hours after the price breached below 1640$ level which held as a support floor over past week but bargain hunters returned quickly to buy falling prices and pushed the metal prices higher. Mixed Forex markets may keep bullion directions unclear in the short term as the American currency still swinging between ups and downs, unable to breach through any of main near-term technical barriers. Hence, further violation isn’t ruled out and we expect bears pressure to occur on approach toward 1680$, also clearance of 1640$ key support once again may trigger bigger sell orders than we witnessed on Tuesday.

Gold for June delivery advanced $1.40, or 0.1%, to $1,651.10 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery rose 30 cents, or 1%, to $31.67 an ounce.

Oil prices traded firmly higher on Tuesday, surged to its best levels in almost two weeks after touched the 105$ mark amid better risk-on environment on optimism over Eurozone’s fiscal situation after Spanish government bond auction passed with solid outcomes including improved bit-to-cover ratio, debt yields retreated below 6% barrier as well. Moreover, there were a batch of upbeat economic data and news with German and Eurozone ZEW investor confidence unexpectedly improved in April while International Monetary Fund lifted global growth forecast to 3.5% in 2012 and 4.1% in 2013, up from previous projection of 3.3% in 2012 and 4.0% in 2013. Growth expansion is typically considered a proxy for a higher crude consumption in the future. West Texas Intermediate was supported by the news that the Seaway pipeline will start to carry crude from Cushing to the U.S. Gulf from May 17, which is earlier than anticipated, helping to ease a supply gut in the U.S. Midwest by pumping it to refineries on the Gulf Coast. From a technical prospective, If the prices managed to hold gains above 103.70$-104$ on upcoming hours it may signal further strengthening, while below the latter would mean profit takers are back in play to push lower.

WTI Crude oil for May delivery advanced $1.27, or 1.2%, to $104.20 a barrel on the New York Mercantile Exchange. Brent oil for June settlement rose 10 cents to end the session at $118.78 a barrel on the London-based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks rose strongly on Tuesday with all major three indexes ended on the best advance in more than a month, supported by easing woes over Europe’s debt crisis while a series of upbeat earnings reports fueled buying interest across the board. Wall Street rocketed higher following European bourses which reserved losses on better than estimated German confidence indicator and increased demand for Spain’s government bonds. Boosting the risk on trade, a solid batch of corporate earnings results included Goldman Sachs Group, Coca-Cola and other big names. Meanwhile, IMF on Tuesday gave an upbeat assessment for global recovery after revised up its prior projection for global growth to 3.5% in 2012 and 4.1% in 2013. Adding to the bullish sentiment, government data showed that the number of building permits issued in the U.S. surprisingly increased in March, rising to the highest level since September 2008.

The Dow Jones industrial average closed up 194.13 points, or 1.5%, to 13,115.54.

The S&P 500 index climbed 21.21 points, or 1.6%, to 1,390.78.

The NASDAQ composite Index gained 54.42 points, or 1.8%, to 3,042.82.

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