"Fort Financial Services"- fundamental and technical analysis.
27.02.2017
Euro
General overview
The currency pair EUR/USD grew taking advantage of the weak US dollar. The dollar was under pressure since the middle of the trading week amid the FOMC minutes and the new Finance Minister Steven Mnuchin's statements on tax reform.
Current situation
Despite the recent growth the EUR/USD pair remained in a downward channel. Buyers just managed to lead the price to its upper limit. The overnight’s recovery attempt stalled just under 1.0600 barrier in the early European hours. The pair’s upside lost some vigour finding fresh offers around the level. Buyers tried to break above 1.0600 ahead of the NY opening. The price broke the 50-EMA in the 4 hours chart and stayed above the moving average. 100-EMA crossed 200-EMA downwards. The 50 and 100 EMAs pointed lower while 200-EMA was neutral in the mentioned timeframe. The resistance is at 1.0650, the support comes in at 1.0600.
MACD grew which indicates the sellers’ positions weakening. RSI was neutral.
Trading recommendations
A move above 1.0600 will support buyers sending the market to 1.0630 – 1.0650. A return to 1.0550 may open the way for a move to 1.0500.
Pound
General overview
The British pound maintained its bid tone flirting with its recent highs. The British pound was able to strengthen amid positive BBA Mortgage Approvals and the US dollar retracement.
Current situation
GBP/USD did not have enough momentum to reach the 1.2600 resistance. Bulls stopped at the mark 1.2565 being unable to push the spot higher. The pair stayed in a tight range of 50 pips during the European session. A bout of fresh selling interest emerged in the European morning. The Cable declined against the dollar heading towards 1.2500. The pair rebounded from 200-EMA and broke 50 and 100-EMA upwards in the 4 hours chart. The British pound continued developing well above the moving averages. The 50 and 200 EMAs pointed higher while the 100-EMA maintained its bearish slope in the same chart. The resistance lies at 1.2600, the support comes in at 1.2500.
The MACD histogram grew which indicates buyers’ strength. The RSI indicator lost upward strength and moved downwards.
Trading recommendations
The bullish tone is likely to remain intact. A move above 1.2550 would revive bullishness towards 1.2600 – 1.2650.
Yen
General overview
USD/JPY continued its smooth slide on Friday. The current situation on the currency market is not good for the US dollar, as the Fed recent minutes indicated small chances of rate hike in March.
Current situation
The USD/JPY pair maintained its offered tone on Friday. Buyers reversed a minor portion of their losses in the night. Traders pushed the price to 113.00 but failed to break above the hurdle. Sellers returned control in the late Asian session, pushed the US dollar lower and erased all buyers' gains in the early European session. The 4 hours chart showed that the price broke the 100-EMA downwards and moved lower. The 100 and 200 EMAs maintained their bearish slope while 100-EMA turned neutral. The price continued developing well below the moving averages in the mentioned timeframe. The resistance is highlighted at 113.00, the support comes in at 112.00.
The MACD histogram decreased which indicates the sellers’ strength. The RSI indicator was holding near oversold levels, favoring a new move lower.
Trading recommendations
As the most probable scenario, we consider further moving downwards towards the level at 112.00.
AUD/USD
General overview
The Australian dollar fell after the Governor of the RBA Phillip Lowe made it clear that the Central Bank did not intend to raise interest rates in the nearest time.
Current situation
Despite the overall positive trend bulls seem have no desire to move higher. After posting recent highs at 0.7739 the price softened and returned to 0.7700 where remained in a consolidation stance during the night session. The rise in the dollar demand made the AUD break below 0.7700 pushing the Australian currency towards 0.7650. According to 4 hours chart the price tested the 50-EMA. All the moving averages pointed higher. The resistance is highlighted at 0.7700, the support comes in at 0.7650.
The histogram declined which is a sell signal. RSI was neutral.
Trading recommendations
In order to recover some strength, AUD/USD needs to rise back and hold above 0.7700. The current decline we consider corrective. It is a good opportunity to buy on dips. Only a break below 0.7650 will ease the upward pressure. A move below 0.7550 will be able to neutralize the buying pressure and open the way to further weakness.
XAU/USD
General overview
Gold reached three-month highs on Friday amid the dollar in the light of the latest FOMC minutes analysis. The world political instability increased the demand for risk-free assets as well.
Current situation
Spot gold remained on strong bullish footing on Friday. After an Asian flat the price got an upward impetus in the European morning. Strong bullish interest helped the price to break 1250 and drove the price towards 1260 afterwards. The 4 hours chart showed that the price continues developing well above the moving averages. The moving averages maintained their bullish slope in the same timeframe. The resistance exists at 1260, the support stands at 1250 dollars per ounce.
The MACD histogram grew which indicates buyers’ strength. RSI went upwards which confirms the strength of buyers.
Trading recommendations
If the bullish tone persists we expect a breakout of the level 1260 dollars per ounce.
Brent
General Overview
Black gold slightly declined amid the crude inventories report. According to the Kuwait business paper research, OPEC and non-OPEC countries kept their promise to reduce oil production only by 86% instead of promised 94%.
Current situation
The tone was negative in the oil market on Friday. The price reversed some losses in the night. Buyers returned the benchmark to 56.66 dollars per barrel where Brent caught fresh offers and moved lower. Sellers returned the price to 56.50 on European open and continued driving black gold lower during the day. Oil prices reached 56.00 ahead of the NY opening. According to 4 hours chart the price tested the 50 and 100 EMAs. The 50-EMA bounced off the 100-EMA upwards. The 50 and 100 EMAs pointed higher while 100-EMA turned neutral. The price was above the moving averages in the same chart. The resistance lies at 56.50, the support comes in at 55.50 dollars per barrel.
MACD decreased which indicates the buyers’ positions weakening. RSI remained within neutral territory.
Trading recommendations
A downtrend will start as soon, as the price drops below the support level 55.50 dollars per barrel.
DAX
General overview
European stocks dropped on Friday. Investors stayed focused on the earnings reports and political instability in Europe and the United States.
Current situation
The index gapped lower at the open on Friday. Sellers maintained control after the gap and pushed DAX lower. The index broke 11900 and 11800 in the mid-European session. The benchmark continued its slide afterwards and reached 11735 ahead of the NY opening. The price broke the 50-EMA and tested the 100-EMA in the 4 hours chart. The 50, 100 and 200 EMAs pointed higher in the same timeframe. The resistance exists at 11900, the support stands at 11800.
MACD decreased which indicates the buyers’ positions weakening. RSI remained within neutral territory.
Trading recommendations
After a daily close below the support at 11800 we could see the index extending its declines down to 11700.
NASDAQ
Current situation
NASDAQ turned bearish on Friday. The index was slowly declining in the night and accelerated its slide with European markets opening. Sellers drove the index to 5300 in the mid-European session. The benchmark tested the 50-EMA. The moving averages pointed higher in the in the 4 hours chart. The resistance is at 5340, the support comes in at 5300.
MACD decreased which indicates the buyers’ positions weakening. The RSI indicator lost upward strength and moved downwards.
Trading recommendations
The price eyes support at 5300 loss of which would trigger further weakness towards 5260.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman