"Fort Financial Services"- fundamental and technical analysis.
10.02.2017
Euro
General overview
The US dollar trades against the euro in a narrow range as the political and economic future of the United States became more uncertain. Inventors prefer risk-off sentiment. The market ignored the weak export and trade balance data in Germany. Moreover, Evans and Bullard’s reports (the FOMC representatives) will be under the spotlight later the day.
Current situation
The price was positive during the night trades. Having found fresh bids around 1.0670 the spot turned bullish and rallied to 1.0700. However, a bid tone sharply weakened in the European session. The spot failed to retake 1.0700 and retreated. The 4 hours chart showed that the price continued staying between the 100 and the 200-EMAs during the day. The 50 and the 100-EMAs were neutral while the 200-EMA pointed higher in the mentioned timeframe. The resistance is at 1.0700, the support comes in at 1.0650.
MACD grew which indicates the sellers’ positions weakening. RSI left the oversold readings and headed north.
Trading recommendations
The overall outlook remained bearish. Sellers need to regain 1.0650 to extend gains. A break below the handle will open the way to 1.0600. A move towards 1.0750 and break above the hurdle will neutralize the current downward scenario.
Pound
General overview
British Parliament approved bill without changes to start Brexit (494 votes to 122). The British PM will soon start parting with the European Union. The decision boosted the sterling's growth. Meanwhile, political uncertainty in Europe also contributed the cable growth. Investors’ attention now turns to the Mark Carney’ speech in the evening.
Current situation
The pound maintained its bullish bias in the early trades on Thursday. A fresh buying pressure around 1.2500 pushed the spot upwards. The Cable rallied and reached 1.2600 post London's open. However, the rally seems to have run out of steam ahead of the NY opening. The major slowed down and slightly moved back. The price bounced off the 100-EMA and broke the 50-EMA upwards in the 4 hours chart. The majors stayed above their moving averages afterwards. The 100-EMA was bullish, the 50 and the 200-EMAs remained neutral in the same chart. The resistance lies at 1.2600, the support comes in at 1.2500.
MACD entered the positive area. If MACD remains in the positive territory, buyers’ positions will strengthen. RSI left the neutral area and moved north.
Trading recommendations
In a wider perspective the GBPUSD pair could gain bullish momentum, if it recovers above the 1.2600 area, the spot will probably maintain bulls in the driver's seat towards the 1.2700 level.
Yen
General overview
The yen trades vs. the US dollar in a narrow range due to the meeting between Donald Trump and Japanese Prime Minister Shinzo Abe. The Japanese yen seem to benefit from the growing political uncertainty in Europe.
Current situation
The USD/JPY pair remained under pressure on Thursday. The price was flat out hovering above 112.00 during the morning hours. The rise in the dollar demand pushed the majors upwards post-European open. The price continued developing well below its moving averages in the 4 hours chart. The 50, 100 and the 200-EMAs kept pointing lower in the same chart. The resistance is highlighted at 113.00, the support comes in at 112.00.
MACD decreased which indicates the buyers’ positions weakening. RSI left the oversold territory and entered the neutral area.
Trading recommendations
We expect an upward correction which will start as soon as the pair rises above 112.50. The price may extend its rise towards the 113.00 area.
NZD/USD
General overview
The New Zealand dollar significantly fell following the Reserve Bank of New Zealand decision to leave the rate unchanged at 1.75 percent.
Current situation
The NZD/USD pair maintained its offered tone on Thursday. The kiwi found a solid support at 0.7200 in the night. The price faced upward rejection after touching the level and slightly rolled back staying close to three-week lows. A bout of NZD weakness pressured the spot ahead of the NY opening. The NZD/USD struggled to break below 0.7200 in the second part of the day. According to the 4 hours chart the price broke the 50 and the 100-EMAs downwards. The 50 and the100-EMAs were neutral while the 200-EMA kept pointing higher in the mentioned timeframe. The resistance is highlighted at 0.7250, the support comes in at 0.7200.
MACD entered the negative area. If MACD remains in the negative territory, sellers’ positions will strengthen. The RSI indicator left the neutral territory and headed south.
Trading recommendations
The NZDUSD pair eyes strong support at 0.7200 level now. However, the major may change its trajectory to bullish. The potential buyers’ targets are 0.7250 and 0.7300.
XAU/USD
General overview
Gold prices moderately strengthened, staying near the 3-month high due to the growing concerns around the political situation in Europe and the US economic uncertainty.
Current situation
The trend is clearly bullish for now. The price negated night losses and refreshed its highs in the European session. The XAU/USD bounced from 1240 and jumped to 1243 in the early European trades. After touching the mark a buying pressure ran out of steam and the spot sharply dropped below 1240 dollars per ounce. The XAU/USD pair remained in an upward channel. Meanwhile, the yellow metal tested its lower boundary ahead of the Wall Street opening. The gold price hovered above its moving averages in the 4 hours chart. The 50, 100 and the 200-EMAs maintained their bullish slope in the same chart. The resistance exists at 1240, the support stands at 1230 dollars per ounce.
MACD decreased which indicates the buyers’ positions weakening. RSI indicator left the overvalued area.
Trading recommendations
A bullish tone prevails in the 4 hours chart. After a close above 1240 the gold price may extend its bullishness to 1250. However, overbought daily studies point to a correction in the short term. In this potential scenario sellers may drive the precious metal to 1230 dollars per ounce.
Brent
General overview
Unexpected drop in US inventories supported oil prices, but the remaining supply glut limited its further growth.
Current situation
Brent kept the upbeat tone unchanged on Thursday. Fresh bids around 55.50 fueled the upward bias pushing the benchmark higher. Traders broke 55.50 post-European open. The advance lost upward momentum around 56.00. After posting a daily high black gold rolled back. The benchmark failed to retake the 50-EMA and bounced off it downwards in the 4 hours chart. The moving averages were flat in the same chart. The resistance lies at 56.50, the support comes in at 55.50 dollars per barrel.
MACD grew which indicates the sellers’ positions weakening. The RSI left the oversold area and moved upwards.
Trading recommendations
Bulls continue to control the market. We recommend placing buy orders if the benchmark stays above 55.50 dollars per barrel. The potential buyers’ target is 56.50. A failure here will indicate that our bullish expectation is wrong.
DAX
General overview
European stocks opened green on Thursday. The market has been growing the third session in a row. Societe Generale and the Total shares were getting stronger following their quarterly earnings.
Current situation
The index gapped higher at the open on Thursday. The bears appeared to have loosened grip allowing the benchmark to reverse its previous losses. DAX grew and tested 11600 in the American session. The 1 hour chart showed that the benchmark broke the 100-EMA and tested the 200-EMA. The 50 and the 100-EMAs were bearish while the 200-EMA was flat in the same chart. The resistance exists at 11600, the support stands at 11500.
MACD grew which indicates the sellers’ positions weakening. The RSI left the oversold area and entered the neutral territory.
Trading recommendations
We believe that the index might extend its recovery towards 11600 and 11700 levels.
S&P500
General overview
Wall Street edged higher amid oil prices rally. All eyes are on earnings reports.
Current situation
The index opened green on Thursday. S&P500 slightly grew in the Asian session. The benchmark maintained its bid tone during the European hours trending towards 2300. The price bounced off the 50-EMA upwards in the 4 hours chart. The index stayed above its moving averages during the day. The 50-EMA was flat while the 100 and the 200-EMAs 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 moved upwards.
Trading recommendations
The bullish trend remained intact. A break above 2300 may suggest a further growth towards 2320 area.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman