April 19 Daily Market Analysis

EUR/USD

The pair traded lower on Wednesday, as mounting fears over Eurozone’s sovereign debt crisis weakened sentiments toward the common currency while pushed the U.S. currency modestly higher. Concerns over Spain’s troubles rose after Bank of Spain data showed that the amount of bad loans at domestic banks rose to 8.16%, the worst figure in 18 years. In addition, Investors would remain cautious ahead of a 10-year Spanish bond auction scheduled today. The pair dipped to a fresh 3-day low at 1.3057 where based and rebounded to regain prices above 1.3100 in recent dealings. Higher lows pattern on the smaller frames may consider a bullish signal in context of the last bulls run off 1.2994. However, the price to confirm the upside should clear immediate resistance at 1.3145 which is 38.2% retracement for the last fall off 1.3384, also the declining trendline projected from the mentioned high. Above the latter could push toward retesting the main near-term resistances zone between 1.3180-1.3210. Otherwise, It may suggest that the price upside action is only a pause in a broader downtrend which keep the chance alive for further attacks to the key support area 1.2970-1.3000.

GBP/USD

The Cable has pared morning losses and rebounded significantly to a fresh 2-week highs above 1.600 psych levels, buoyed mainly by a batch of supportive data coming out from the U.K. including a less dovish tone seen in BOE minutes after a key MPC member dropped his previous call for expanding the Asset Purchase facilities during last meeting. Jobs data came also in upbeat after both jobless claims and unemployment rate performed lower than anticipated. Currently, if the cross managed to overcome the recent yearly peak of 1.6063, it means heading to a medium term resistance area begins from 1.6090 which represents Fib 61.8% level of 1.6616-1.5230 broader downtrend along with a key double high connects to mid-November. Above the mentioned would open a very vital resistance pivot on the daily chart at 1.6165 Oct high. Ability to push beyond this barrier would suggest a major breakout and open up further upside room after carrying the pair into a different trading phase.

AUD/USD

The pair has continued its downtrend, falling from 1.0315 where failed on approach to Tuesday’s high, to break down 1.0400 level and trade close to the 1.0350 where is currently pricing. The Aussie tracked weaker performance in commodity and stocks markets on growing fears over the European fiscal crisis which weighed down broadly on high yielding currencies .Technically, Staying above 1.0335 which is 50% retracement of 1.0224-1.0450 rally coupled with 200 HMA would confirm a solid basing and clear the way for another bullish attempt toward recent double high, with a loss here to open up a window of opportunity for the bulls exposing the monthly highs in the 1.0445-1.0470 price zone. Above the latter will take upside risks with a fresh leg higher toward 1.0555 which should limit upward moves to protect the overall downtrend. Only loss of multiple weekly lows around 1.0300 could weaken the structure and risks return to support zone below 1.0250.

USD/CHF

The pair lost the ground sharply on Wednesday’s session after spiked strongly higher during early trades to breach briefly above 0.9200 key barrier where printed a fresh 2-day high amid broader strength in US exchange rates. Nevertheless, the cross retreated quickly flowing positive results of the Swiss ZEW expectations survey, which beat forecasts. Also, the greenback trimmed early gains following higher pound sentiments and some assurances from ECB officials which cooled risk aversion somewhat. The technical picture remain mostly unchanged with initial support offered by 100-4H MA at 0.9145, followed by 200 MA at 0.9135 while 50% retracement of latest bullish swing off 0.9002 should contain further dips to protect upside outlook at 0.9120. The last support barrier before ending the corrective rally resides around 0.9089, weekly lows and 61.8% retracement barrier. On contrary, only regain prices above 0.9220 coupled with a sustained close above 0.9200 could shelve the assumption of an exhausted bullish momentum and boosts the scenario of near-term rally extension.

Commodities

Precious metals turned lower on Wednesday on the back of worries over Eurozone’s debit crisis which dampened the shared currency latest rally and boosted the greenback broadly, weighing down on metals and other dollar-priced commodities. There were fresh concerns regarding health of Spanish banking sector, Portugal also looks uncertain to tackle its troubled public finances. American data recently give a little inspiration for bullion traders after played to lift prices on talks over further easing monetary policy. However, binary traders should eye today’s unemployment data to take cues over Fed’s attitude in its next minutes which is expected on the coming week. Downbeat jobs data is currently priced in positively in binary markets at least in the short term bets as it support forecasts of a stronger dovish approach from the Federal Reserve which may lead to additional stimulus steps to sustain recovery gains. Technically, The previous declines in the 1630$-1640$ price zone represented a good bargain opportunity during last week which helped the metal to recover from several dips. We may expect fresh weakness with breaching below toward recent monthly low of 1612$. Inversely, There is a short term double high pattern around 1657$ coupled with 20 DMA resistance which managed to cap upside attempts so far. Thus, a push above it may signal further strengthening to target next barrier at 1677$.

Gold for June delivery declined $11.50, or 0.7%, to $1,639.60 an ounce on the New York Mercantile Exchange.

Silver futures for May delivery shed 19 cents, or 0.6%, to $31.49 an ounce.

Oil prices came under selling pressures yesterday, snapping a short-lived upswing that took the commodity to its highest points in two weeks on Tuesday. The prices gave up past two sessions` solid gains amid risk-off trades sparked by renewed fears about Eurozone’s lingering debt problems on fresh reports suggested that Spanish banks are facing serious troubles which should affect the region’s efforts to lift economies from the contraction ground. Addressing debt problems typically needs additional austerity measures and further spending cuts which in turn lead to a worsening recession. Meanwhile, The U.S. EIA reported a higher than expected increase of crude oil inventories during the past week that jumped by 3.9M barrels, well above estimates for a 1.6M barrel increase. The data added to bearish sentiments after the ongoing string of sharp increases painted a pessimistic picture about the demand strength outlook in the world’s largest consuming economy. The short-term bullish charts had serious damages after losing support of 104$ key handle. A fresh rally which respects the latter as a resistance could accelerate selling pressures toward attacking prices below 101$ barrier where recent lows lie.

WTI Crude oil for May delivery slipped $1.53, or 1.5%, to settle at $102.67 a barrel on the New York Mercantile Exchange. Brent for June settlement fell 81 cents, or 0.7 percent, to $117.97 a barrel on the London-based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks ended lower Wednesday, tracking losses in the broader risky markets as renewed concerns after Tuesday’s calm session eased risk-on mood and sent investors broadly toward dollar and U.S. bonds which attracted significant safe-haven flows. Moreover, IBM and Intel earnings failed to meet expectations, taking out the main reason behind the previous day solid advance. There were intensified concerns over Spain and Portugal’s fiscal health ahead of Thursday’s critical debt auctions which deepened worries over the ability of Eurozone’s troubled countries to fund themselves without requiring a bailout. Along with European developments, Investors will closely watch today’s unemployment data, seeking hints about the facts in labor markets which should determine the recovery direction and the most important the Federal Reserve possible reaction regarding stimulus needs. Meanwhile, Lower crude oil prices added to bearish sentiments after pressured the energy sectors with the shares drifted strongly lower , particularly after the release of a higher than expected rise in weekly crude inventories.

The Dow Jones industrial average fell 82.79 points, or 0.6%, to 13,032.75.

The S&P 500 index slipped 5.64 points, or 0.4%, to 1,385.14.

The NASDAQ composite Index closed down 11.37 points, or 0.4%, to 3,031.45.

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