"Fort Financial Services"- fundamental and technical analysis.
27.01.2017
Euro
General overview
Investors ignored positive Eurozone data: Consumer Confidence Survey in Germany showed better than expected results, Unemployment Survey in Spain declined more than expected. The immediate focus now remains on US GDP which is set for Friday.
Current situation
The EUR/USD remained in bulls' hands on Thursday. The market seemed fairly balanced amid lack of market mover. The euro remained in a tight range between 1.0720-1.0750 during the Asia session. European traders pushed the price lower. The common European currency dropped and touched 1.0700 in the mid-European session. The spot broke the 50-EMA and tested the 100-EMA in the 1 hour chart. The 100 and the 200-EMAs pointed higher while the 50-EMA remained neutral in the mentioned timeframe. The resistance is at 1.0700, the support comes in at 1.0650.
MACD decreased which indicates the buyers’ positions weakening. RSI left overvalued readings and moved south.
Trading recommendations
We prefer to stay bearish for now. A move below 1.7000 will signal the presence of sellers. The pair EURUSD may go downwards towards 1.0650 after the level break. If the price closes above 1.0750, the market may continue moving upwards.
Pound
General overview
The UK's Q4 GDP came in better-than-expected supporting the national currency. Moreover, the pound received extra support after Supreme Court decision which ruled that Article 50 requires parliamentary approval to be launched. We expect US Gross Domestic Product Price and Durable Goods Orders releases on Friday. We will also be keeping a close eye on Trump and May's meeting. Theresa May will become the first foreign leader to meet the new President.
Current situation
The pound surprised markets on Wednesday, having successfully climbed over the 1.26 hurdle. After reaching multi-month highs the GBP/USD pair slowed down. Buyers seem to have completed an upside impulse for now. Having run out of steam bulls stopped at 1.2650 in the mid-European session and gave way to sellers. Bears pushed the price lower and tested 1.2600 ahead of the NY session opening. The spot extended its losses in the early US trades. The 4 hours chart showed that the price hovered above its moving averages. The 50-EMA crossed the 200-EMA upwards. The 50 and the 100-EMAs maintained their bullish slope while the 200-EMA was neutral in the mentioned timeframe. The resistance lies at 1.2600, the support comes in at 1.2500.
The MACD histogram grew which indicates buyers’ strength. RSI indicator consolidated within overvalued readings.
Trading recommendations
Technically the GBP/USD pair is heavily overbought. We expect a correction move below 1.2600. If the spot fixates below the handle we could see GBPUSD extending its declines down to 1.2500.
Yen
General overview
The yen weakened despite existing risks towards world trade which keep supporting the safe-heaven yen. Japan will release CPI figures in the night.
Current situation
Bears lost the ball on Thursday. The pair stayed range-bound-to higher in the Asian session. An upward impetus emerged ahead of the European session opening. The US dollar bounced off 113.00 and moved towards 114.00 during the morning hours. The U.S dollar accelerated its recovery post-European open and jumped to fresh session peak above 114.00 level. The price broke the 50-EMA upwards in the 4 hours chart. The spot continued developing well below the 100 and the 200-EMAs afterwards. The 50 and the 100-EMAs pointed lower while the 200-EMA remained neutral in the same chart. The resistance is highlighted at 115.00, the support comes in at 114.00.
MACD grew which indicates the sellers’ positions weakening. The RSI left the neutral area and moved north.
Trading recommendations
Bulls keep focus at 114.50. If they start to challenge this area it is likely to break and the price may move towards the 115.00 hurdle.
AUD/USD
General overview
The Australian market was closed amid Australia Day. The Aussie softened on the back of the U.S. dollar recovery. Moreover, falling Chinese industrial profits weighed on the Australian dollar.
Current situation
The AUD/USD remained in an ascending channel. However, buyers have no strength to go higher any more. The Asian recovery stalled at 0.7583. The AUD dropped at the beginning of the European session and broke the 0.7550 handle. Sellers continued leading the price lower in the NY session. According to the 4 hours chart the pair tested the 50-EMA. The spot stayed above the moving averages during the day. The 50 and the 100-EMAs kept heading higher while the 200-EMA remained neutral in the same chart. The resistance is highlighted at 0.7550, the support comes in at 0.7500.
MACD indicator was at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. The RSI left the overvalued readings and entered the neutral area.
Trading recommendations
We prefer to put on hold bulls’ plans for now. A break below 0.7550 might force the AUD/USD pair to resume its downward trajectory towards 0.7500.
XAU/USD
General overview
Gold prices edged lower following European and EU stocks rally. However, concerns over Trump’s protectionism kept limiting the US dollar recovery especially after Donald Trump signed a set of immigration laws on Wednesday.
Current situation
Gold prices remained under heavy selling pressure on Thursday. Sellers failed to move the price below 1193 in the night. The XAU/USD pair bounced off the mark and reversed some losses. The upward impetus, however, lost its legs at 1202 dollars per ounce in the late Asian session. The price turned around and returned below the handle in the European hours. The yellow metal continued trading in negative ground during the day and broke 1190 ahead of the NY session opening. The price broke the 50 and the 100-EMAs downwards in the 4 hours chart. The 50 and the 100-EMA remained bullish, while the 200-EMA was flat. The resistance exists at 1190, the support stands at 1180 dollars per ounce.
MACD entered the negative area. If MACD remains in the negative territory, sellers’ positions will strengthen. RSI consolidated within oversold readings.
Trading recommendations
To maintain control sellers need to retake 1190 dollars per ounce. In light of this scenario sellers will drive gold spot to 1180. To revive bullishness the precious metal needs to return above 1205-1210 dollars per ounce.
Brent
General overview
Weaker dollar supported demand for oil. However, Brent growth was limited amid a large number of supplies and bulging inventories despite OPEC’s attempts to cut output.
Current situation
Brent extended its consolidation on Thursday. The price traded comfortably around 55.50 during the day. As we see the level is defended by sellers as any buyers' attempt to move the benchmark higher failed. The 50, 100 and 200-EMA were neutral in the 4 hours chart. The resistance lies at 55.50, the support comes in at 54.50 dollars per barrel.
MACD indicator was at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. The RSI remained within the neutral area.
Trading recommendations
The technical picture presented a bullish tone. Our next short-term target for the oil price is 56.50, after which we see Brent extending its rise over coming days towards the 57.50 dollars per barrel.
DAX
General overview
European stocks traded higher following the news that Johnson & Johnson is to buy Actelion for $30 billion. Meanwhile, mining stocks traded mixed while financial stocks were on upside.
Current situation
The tone was positive in the market on Thursday. The index gapped higher at the daily open. DAX continued moving higher after the gap and reached 11900 in the early European trades. Buyers failed to retake the level and stayed a few pips below the hurdle during the day. The benchmark hovered above its moving averages in the 4 hours chart. The moving averages maintained their bullish slope in the mentioned timeframe. The resistance exists at 11900, the support stands at 11800.
The MACD histogram grew which indicates buyers’ strength. The RSI indicator remained within overvalued readings favoring a new move higher.
Trading recommendations
The price maintained its bullish tone in the 4 hours chart. A close above 11800 will trigger gains towards 11900.
S&P500
General overview
U.S. stock posted fresh record highs amid upbeat corporate earnings reports.
Current situation
The bullish market structure remained in place on Thursday. S&P500 extended its vertical rise and tested the level 2300 in the early Asian trades. The hurdle limited the further bulls' advance and rejected the price downwards. The spot continued developing well above its moving averages in the 1 hour chart. The 50 and the 100-EMAs crossed the 200-EMA upwards. The moving averages maintained their bullish slope in the same chart. The resistance is at 2300, the support comes in at 2280.
The MACD histogram grew which indicates buyers’ strength. RSI oscillator consolidated within overbought levels.
Trading recommendations
If the bullish tone persists we expect a breakout of the level 2300. The next level to focus on is 2320.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman