April 30 Weekly Market Review

Daily Market Analysis

EUR/USD

The pair recovered on Friday’s session from a fresh 3-day low of 1.3156 sparked earlier by Spanish credit downgrade, to peak its highest prices in more than three weeks at 1.3269, as disappointing American growth data overshadowed ongoing concerns over Eurozone’s debt troubles and triggered broad selling pressure on the greenback against its major counterparts. Technically, the 1.3200-1.3235 price zone currently offers important support in the short-term as comprises Fib 61.8% of 1.3384-1.2993 fall along with rising trendline connects to monthly lows. Dipping below these supports shouldn’t crack 200 HMA at 1.3170 mark to keep upside favored, otherwise, bears may regain some control to suggest some bearish corrections at lower levels. On the other hand, upside main target remains at 1.3300, major handle which a break above to indicate an end for a prolonged sideways phase that commanded the moves since early April.

GBP/USD

The Cable traded substantially higher during past week to print fresh multi-month highs above 1.5270 on Friday, supported by declining US currency that followed lower than anticipated growth pace in the first quarter while the pound managed to contain early pressures sparked by a disappointing reading of UK GDP that showed a contraction for a second quarter. Technically, the cross currently should meet the 200 MA on the weekly chart at 1.6290 and a sustained close above 1.6300 barrier should take upside risks through the running week to 78.6% retracement of broader downtrend projected from past year’s peak of 1.5744, down to 1.5232 yearly bottom around 1.6415, above which we have a key double high pattern connects to late July around 1.6470. On the other hand, keeping short-term bulls in play would require 1.6200 handle to hold to contain potential corrective dips that may be triggered by overbought conditions. Nonetheless, the main support barrier will be lying at 1.6165 which key pivot/high on the daily chart as well as represents 61.8% retracement of the aforementioned descend.

AUD/USD

The pair soared higher on Friday’s session to hit a fresh 1-month high at 1.0476 as the broadly weaker US dollar along with solid gains in commodity and stocks market lifted the Aussie sentiments modestly. However, we may expect that upside would remain limited somewhat ahead of RBA meeting as market participants are expecting to see a dovish action from the central bank amid lingering slowdown signals in the Chinese economy, also after inflation pressures eased according to last CPI data. Technically, the price currently is testing an important resistance zone in the near-term at 1.0450-1.0470 region which comprises the monthly highs coupled with 38.2% retracement of 1.0854-1.0224 decline. If the cross managed to sustain position above the latter it may signal fresh strength to target next conventional resistance between 1.0540-1.0555 which represents 50% retracement along with the key peak of late March and where the recent downleg projected from.

USD/CHF

The pair retreated to print fresh monthly lows on Friday at 0.9050, pressured mainly by the weakened US dollar that performed its worst in about four week in the wake of a straight batch of disappointing economic data while GDP of Q1 on Friday deepened the losses and sent investors away from the reserve currency after revived market’s hopes of a fresh QE round. Initial resistance is offered by 20,100 HMA along with descending trendline projected from 0.9250 monthly high and 61.8% retracement of 0.8930-0.9250 rally, between 0.9070-0.9100 price zone. Above the mentioned the cross should test 200 HMA and Fib 50% barrier around 0.9124, with a loss here to ease downward pressures and allow for a deeper corrective bounce. On the other hand, holding below the latter would leave 0.9000 psych ground as a conventional target/support.

Commodities

Precious metals closed the week on decent gains with gold prices ending steady above $1660 handle, marking its best closing level since 12th April and was propelled mainly by a weaker greenback and rising QE forecasts along with catching some safe haven flows from ongoing debt crisis in Eurozone. The yellow metal spiked higher following a batch of downbeat US data including jobless claims which maintained its bullish trend over past three weeks. Friday’s GDP of Q1, however, was a major supportive factor after showed lower than expected growth expansion which in turn suggested that Fed may provide further liquidation to maintain recent progress in economic recovery. Quantitative easing policy typically is supportive for gold and other dollar-priced instruments due to its inflationary impact which boosts the metal’s appeal as a store of value and hedge against prices pressures. Moreover, the disappointing data pressured the American currency across the board, hence it traditionally fueled buying interest in the commodity markets. Gold after reacted as a safe haven harbor on last European developments may regain its lost appeal as an alternative assets through uncertainty situations which in turn may speculate further gains in upcoming sessions.

Gold for June delivery added $4.30, or 0.3%, to $1,664.80 an ounce on the Comex division of the New York Mercantile Exchange.

Silver futures for July delivery were up 14 cents, or 0.5%, to $31.35 an ounce. Down 1% for the week.

Oil prices stayed in range on Friday’s session but managed to close the weekly dealings solidly higher as speculations of further easing measures from the Fed offset negative demand outlook triggered by weak US economic data. The initial impact was bearish in oil markets as downbeat release fueled worries over consumption strength in the largest economy across the globe. However, the same reading sparked strong selling pressures on the American currency which in turn buoyed buying demand in commodity markets broadly. Additionally, disappointing growth rate through past three months revived expectations for another round of economic stimulus by the Fed that already pledged to implement that if the recovery flattered. Meanwhile, European concern was at play as Spanish downgrade reduction added more worries over fiscal stability in the troubled region, also persistent debt troubles should lead to further austerity measures which in turn could deepen the recession and by extension weakens future demand outlook. Technically, breaching above recent high/resistance around $105 barrier may signal further strengthening during coming days as it should clear a key falling trendline off yearly highs as well as 61.8% retracement of the 4-week descend connecting to late March high of $107.69.

WTI Crude oil for June delivery rose 38 cents, or 0.4%, to settle at $104.93 a barrel on the New York Mercantile Exchange. Brent oil for June settlement was at 119.64 a barrel, advancing 0.69% over the week on the London-based ICE Futures Europe exchange.

Wall street & Equity Markets Review

U.S. stocks ended mildly higher on Friday’s trading session but trimmed most of early gains in the aftermath of Gross Domestic Product release which disappointed investors somewhat, after missed previous estimates that suggested a 2.5% growth while declined by more than 0.8% below preceding quarter pace which came at 3% in the Q4 of 2011. European woes was at play and added to gloomy environment after the ratings agency Standard & Poor’s cut Spain’s credit rating by two notches to BBB+, citing that the indebted nation is suffering from a recession which is deeper than previously estimated and may lead to a failure in meeting the planned deficit targets despite adopted austerity measures. On the positive side, major corporate earnings remain upbeat after Amazon.com Inc. reported a better than expected quarterly results. Also, QE prospects which were spurred by weak GDP data helped limit the initial bearish impact relatively. On the week ahead, binary stock traders will closely eye Friday’s report of non-farm payrolls in April which should offer more clarity over labor market conditions that is typically provide insight into the overall economic health, also it will be digested in confluence with speculations of additional monetary stimulus. The Dow Jones industrial average advanced 113.90 points to close at 13,204.62.

The S&P 500 index surged 9.29 points to 1,399.98.

The NASDAQ composite Index rose 20.98 points to 3,050.61.

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