"Fort Financial Services"- fundamental and technical analysis.
13.01.2017
Euro
General overview
The euro slowed down with its growth despite the positive EU data. Consumer Price index met traders' expectations in France while the EU's Industrial Production came in better than expected.
Current situation
The euro extended its near-term upward trajectory in the early trades on Thursday. The single European currency broke 1.0600 during the Asian night trade and advanced towards 1.0650 afterwards. The pair pierced the 1.0650 hurdle post-European open and immediately returned below the broken level. EUR/USD rally seems to have ran out of steam as we witnessed the price inability to reclaim 1.0650 in the late European session. The spot hovered above the moving averages in the 4 hours chart. The 200-EMA was neutral while the 50 and the 100-EMAS pointed higher in the mentioned timeframe. The resistance is at 1.0650, the support comes in at 1.0600.
The MACD histogram grew which indicates buyers’ strength. RSI oscillator left neutral territory and headed north.
Trading recommendations
Even though the technical picture presents a bullish tone we expect a correction based on profit taking which may start as soon as the price drops below the 1.0600 level. In this case the spot may reach 1.0550. A move below 1.0550 will neutralize the current buying sentiment.
Pound
General overview
There were no major economic releases in the UK on Thursday. Donald Trump failed to give investors details on his future economic policy. The traders' disappointment triggered a sharp dollar sell-off which helped the pound to reverse some ground. Later in the day we expect to hear some Fed's representatives including J.Yellen.
Current situation
The pound kept its upbeat tone unchanged vs. its US peer on Thursday. The Cable broke 1.2200 during the early hours and extended its bullishness afterwards. Buyers kept pushing the pair upwards and tested the resistance 1.2300 at the beginning of the European session. After touching the level the spot rolled back gathering steam for another leg higher. The short term upward momentum, however, seems to be fading as the Cable kept losing its upward strength during the late European hours. The price broke the 50-EMA upwards and pierced the 100-EMA in the 4 hours chart. The moving averages maintained bearish slope in the same chart. The resistance lies at 1.2300, the support comes in at 1.2200.
MACD grew which indicates the sellers’ positions weakening. The RSI indicator left the neutral area and headed upwards.
Trading recommendations
Despite the recent rally the pair remained in a descending channel. If the spot fails to retake 1.2300 the pound may fall to 1.2200 on profit-taking. A close above 1.2300 may extend the current bullishness towards 1.2400.
Yen
General overview
The yen strengthened after Trump's press-conference where the President-elect Donald Trump failed to provide investors with enough details regarding his future economic plans. Japanese Current Account came in better than expected supporting the national currency.
Current situation
The US dollar extended its sell off on Thursday. A fresh bout of selling pressure drove the USD/JPY pair below 115.00 at the open on Thursday. The US dollar kept losing its value afterwards and reached the 114.00 handle during European morning trade. Sellers failed to regain the level and continued struggling with the handle ahead of the NY session opening, According to the 4 hours chart the price continued staying below the moving averages which started turning downwards. The resistance is highlighted at 115.00, the support comes in at 114.00.
The MACD histogram decreased which indicates the sellers’ strength. The RSI remained within oversold readings favoring a new move downwards.
Trading recommendations
Inability to break below 114.00 may cause some profit-taking towards 115.00. If the pressure persists the next probable sellers target will become the level 113.00.
USD/CAD
General overview
The US dollar retracement after the president-elect Donald Trump helped the Canadian dollar to extend its gains. Moreover, the CAD received additional support from the recovery in crude oil prices. We expect to see fresh figures over New Housing Price later the day.
Current situation
Bears had the ball and kept pushing the pair lower on Thursday. The US dollar had a negative start to the day. The major found fresh offers around 1.3190 at the daily open and extended its bearishness afterwards. The USD/CAD pair broke 1.3120 at the early European trades and kept trending towards 1.3050 which it touched in the mid-European session. The downward move lost its momentum after touching the handle and the spot stayed around it till the North American session opening. The currency pair continued developing well below the moving averages in the 4 hours chart. The 50-EMA crossed the 100 and the 200 EMAs downwards. The moving averages maintained their bearish slope in the same chart. The resistance is highlighted at 1.3120, the support comes in at 1.3050.
The MACD histogram decreased which is a sell signal. The RSI indicator stayed within the negative territory and moved downwards.
Trading recommendations
If the USD/CAD fails to regain 1.3050 buyers may reverse some of their losses and push the pair back to 1.3120. A break below 1.3050 will revive bearishness towards 1.2980.
XAU/USD
General overview
Unclear Donald Trump's plans regarding his future economic/fiscal policies boosted gold prices towards 7-week highs.
Current situation
The gold held a bullish tone on Thursday. Traders pushed the metal higher and broke 1200 in the early European trades. The pair accelerated its rally after the hurdle break and advanced towards 1210 dollars per ounce afterwards. The gold spot hovered above the moving averages in the 4 hours chart. The 50-EMA headed north crossing the 200-EMA upwards. The 200-EMA stayed flat while the 100-EMA pointed higher. The resistance exists at 1210, the support stands at 1200 dollars per ounce.
MACD remained at the same level which confirms the strength of buyers. RSI indicator remained within undervalued territory favoring a new move higher.
Trading recommendations
Daily studies turned bullish and support further upside. A break above 1210 may open the way towards 1220. A downtrend will start as soon, as gold prices drop below the support level 1180 dollars per ounce. We do not exclude some profit-taking after the recent rally.
Brent
General overview
Oil prices received support from the US dollar retracement. However, its growth is limited amid crude inventories growth.
Current situation
Oil prices maintained their bid tone on Thursday. The 55.50 hurdle stopped buyers for a while. The benchmark rolled back after testing the level in the Asian session and made another attempt to reclaim the level during the European hours. Buyers succeeded to break higher in the mid-European session. The benchmark extended its gains towards 56.50 ahead of the NA session opening. The 4 hours chart showed that the price tested the 50 and 100 EMAs in the mid-European trades. The 100 and the 200-EMAs pointed higher while the 50-EMA was neutral. The resistance lies at 56.50, the support comes in at 56.50 dollars per barrel.
MACD grew which indicates the sellers’ positions weakening. The RSI indicator moved upwards.
Trading recommendations
The bullish trend remained intact. A break above 56.50 risks a growth towards the resistance at 57.50 dollars per barrel. A daily close below 55.50 will increase risks of a downside rejection.
DAX
General overview
European stocks moved lower following Pharmaceuticals & Healthcare sector decrease after Donald Trump’s press-conference where he took on drug prices.
Current situation
DAX gapped lower at the daily open and lost its strength further afterwards. Sellers pushed the price below 11600 during the early European hours on Thursday. However, all sellers’ attempts to extend their gains failed and the benchmark remained around 11600 ahead of the NY session opening. The price tested the 50 and the 100 EMAs in the 1 hour chart. The moving averages kept pointing higher in the same chart. The resistance exists at 11600, the support stands at 11500.
MACD decreased which indicates the buyers’ positions weakening. RSI remained within the neutral area.
Trading recommendations
The bullish scenario prevailed on Thursday. Once we break above 11600, we think that the 11700 level will be next.
SPX500
Current situation
The index suffered a short lived downward movement on Thursday. Traders led the price lower and touched the level 2260 in early European trades. The benchmark retracement was triggered by some profit taking after Wednesday's rally. The price broke the 50 and the 100-EMAs downwards and bounced off the 200-EMA in the 1 hour chat. The moving averages were neutral in the mentioned timeframe. The resistance is at 2280, the support comes in at 2260.
MACD indicator was at the centerline. If MACD returns into the positive area the buyers will take control over the market if the histogram enters the negative territory, that will indicate sellers’ growing strength. RSI was within the neutral territory.
Trading recommendations
We believe the index will remain neutral tending to move lower. The possible sellers' targets are the marks 2260 and 2254. A bounce off 2260 may extend the current bullishness towards 2280.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman