April 26 Daily Market Analysis

Daily Market Analysis

EUR/USD

The pair rose on morning trades to peak a fresh 3-week high at 1.3235 as the greenback was mostly pressured during the session ahead of the awaited FOMC meeting while Euro found some support from cross buying against the pound. However, the price retreated following a natural tone from Fed’s statement which suggested that there are no much changes in the US monetary policy. Technically, the 61.8% retracement barrier of 1.3384-1.2993 decline at 1.2635 acted to contain the daily rally swing which foiled the bullish breakout after the cross cleared the previous weekly high at 1.3223. This mentioned level should serve currently as the main resistance line in the short term which a break above is needed to expose higher prices, particularly at 1.3300. On the other hand, the immediate support is offered by 20&200 4H-MA around 1.3175, below which we have bull trendline off monthly lows at 1.3165, then 38.2% retracement at 1.3140, with a loss here to reverse bias and favors sideways moves ahead of turning into bearish while opens up 1.3100 key barrier.

GBP/USD

The Cable managed to erase early losses that came following disappointing UK GDP reading of the first quarter which missed previous estimates of 0.1% expansion while surprisingly showed -0.2% contraction. The data confirmed the double-dip recession in British economy and for the first time in more than four decades. However, a key BOE member suggested that recent growth data won’t change the policymakers’ stance and further liquidation still ruled out through next MPC meeting. In spite of Wednesday’s volatility, the technical picture is largely unchanged. The cross rose to a fresh yearly high but failed to confirm the clearance above Oct high of 1.6165 which also represents 61.8% retracement for the wider downtrend off past year’s peak. Additional bull traps would remain expected inside 1.6160-1.6200 range, therefore binary traders better to buy call options only with a sustained breakout along with convincing closes. In other words, in the case of a renewed upside push above current highs, we advise to await a throwback that respects broken resistances as emerging supports.

AUD/USD

The pair attempted strongly higher on Wednesday’s session, buoyed mainly by a weaker US dollar and strengthened European majors especially during early American trades as downbeat US economic data suggested a dovish action ahead of Fed’s key meeting. Nonetheless, the cross retraced lower later on the day as FOMC outcome was widely seen disappointing as the central bank didn’t show readiness to add further stimulus measures in the near future. Technically, the bullish view gained some momentum after successful basing attempt above 1.0300. The 61.8% retracement of 1.0450-1.0246 down-leg along with falling trendline connecting to the mentioned high, serves currently as an immediate resistance that managed to cap upside so far around 1.0375. Break here could signal further strength toward testing double high pattern around 1.0416, then 1.0450 and 1.0465 monthly highs.

USD/CHF

The pair traded lower yesterday to hit its lowest levels since early April at Wednesday’s low of 0.9077 but the bearish wave was contained as the greenback gained some ground following Federal Reserve’s meeting that disappointed the dollar bears. Looking at the 1H chart, we can see a clear lower highs pattern while declining trendline off 0.9250 remain depressing along with 100 MA. Adding to the bearish outlook the previous support/low of 0.9124 turned to offer resistance after capped the daily bullish attempt and forced the price to dip below 0.9100 barrier as well as 20 HMA. If the market managed to push beyond the mentioned resistance and stayed above, it may ease immediate bear pressures, at least could favor another upswing toward 200 HMA at 0.9145, then 38.2% retracement at 0.9155, with a break here to weaken bearish structure and risk a return to sideways mood. On the other hand, below 0.9080 would require a sustained close to turn the price south toward attacking the 0.9050-0.900 zone as renewed rallies from this level may suggest a bottoming attempt.

Commodities: Precious metals stayed in range Wednesday though dipped earlier amid European woes with Spanish borrowing cost almost doubled in recent debt auctions. Gold prices sank to test weekly lows at $1623 before bounced back as downbeat American data lifted QE forecasts ahead of FOMC meeting. However, upside attempt was capped below $1650 as Federal Reserve’s officials maintained their upbeat assessment for economic recovery through coming quarters. The accompanying statement suggested better growth rates though expected gradual rises, also inflation risks were revised slightly up while unemployment rate was speculated to edge lower more than previously projected. Binary traders reassess the Fed’s stance as unchanged or marginally hawkish, hence the estimated support form a dovish action wasn’t there. Physical demand outlook remained bearish somewhat as Indian imports still unchanged while some rises were expected along with marriages session. The technical picture remains sideways in the short-term while maintains the downward bias in a longer run. The double low pattern at $1623 should act as a main support and a break here would signal fresh easing initially toward $1612 monthly bottom.

Gold for June delivery retreated $1.50, or 0.1%, to settle at $1,642.30 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery retreated 39 cents, or 1.3%, to end at $30.36 per ounce.

Oil prices spiked to fresh weekly highs above $104.50 a barrel in the spot market as an optimistic view for US economy growth by the Federal Reserve offsets partially the sharp drop in durable goods figures in March. The highly anticipated FOMC’s outcome raised previous projections of economy expansion and suggested to pick up gradually, also maintained a positive outlook on labor market conditions. Additionally, Fed’s statement kept interest rates unchanged and projected to remain at recent historical lows till late 2014. Better growth rates and lower unemployment typically offer an upbeat insight into the crude demand prospects in the future. On the other hand, EIA said yesterday that the US crude inventories rose nearly 4M barrels in the last week, versus expectations of a 2.7M increase. The weekly report affirmed its bearish impact that lasted over recent months after kept showing sharp increases, sparking further worries over consumption strength in the world’s largest economy. Adding to pressures on oil, Iranian officials said that they consider the Russian plan aiming at easing tensions between the Islamic republic and the West by halting part of its nuclear activities in exchange for suspending European plans to adopt an embargo for petroleum dealing with Iran which could lead to a sharp decrease of its oil exports.

WTI Crude oil for June delivery advanced 57 cents, or 0.6%, to end at $104.12 a barrel on the New York Mercantile Exchange. Brent oil for June settlement increased 96 cents, or 0.8 percent, to end the session at $119.12 a barrel on the London- based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks closed higher Wednesday for the second consecutive day with the tech-heavy NASDAQ outperformed other main indexes as investors cheered the strong quarterly earnings of Apple Inc. Though durable goods report came massively negative but inventors’ focuses was towards FOMC key meeting and while the central bank left monetary policy unchanged including interest rates and bond purchases, but remained positive on economic outlook. The absence of further simulative measures especially with no reliable hints over a fresh third round of QE was offset by the upbeat assessment over recovery pace, unemployment rate and inflationary pressures. Shares of Apple rose nearly 9%, snapping a prolonged phase of steep losses which pushed the share to ease off its all time highs by more than 12 percent. The solid gains came after the giant company reported wonderful revenues and earnings in the first quarter, propelled by a spike in sales of the iPhone and iPad products. On Thursday’s session, binary traders would digest initial jobless claims for the past week along with pending home sales while Friday’s GDP release is expected to be a key driver before the week-end.

The Dow Jones industrial average ended up 89.16 points, or 0.7%, to 13,090.72.

The S&P 500 index added 18.72 points, or 1.4%, to 1,390.69.

The NASDAQ composite Index surged 68.03 points, or 2.3%, to 3,029.63.

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