"Fort Financial Services"- fundamental and technical analysis.
22.03.2017
Euro
General overview
The euro strengthened on Tuesday as tensions around the French election calmed down.
Current situation
The growing selling pressure around the US dollar allowed the euro to extend its gains. Buyers reversed their recent losses in the night and managed to break above 1.0750. Bulls kept pushing the price higher afterwards and reached 1.0800 in the European morning. The level did not stop the upward momentum and the single European currency extended its bullishness till the NY session opening. The 4 hours chart showed that the major continued developing well above the moving averages. The 50 and 100 EMAs maintained their bullish slope while the 200-EMA stayed neutral. The 100-EMA tested the 200-EMA in the same chart. The resistance is at 1.0800, the support comes in at 1.0750.
The MACD histogram grew which is a buy signal. The RSI indicator was near overvalued territory, favoring a new move higher.
Trading recommendations
We believe that this is essentially a “buy only” market at the moment. A sharp breakout above 1.0800 could spark a further incline towards 1.0850.
Pound
General overview
The pound grew when UK February CPI jumped beyond expectations. Mark Carney’s speech was in focus on Tuesday as well.
Current situation
After a directionless stance during the Asian session the pound became active in the morning. The price spiked in the European morning. Buyers broke 1.2400 and advanced further afterwards. The upward momentum lost steam a few pips below 1.2500. The major crossed the 200-EMA upwards in the 4 hours timeframe. The 100 and 200 EMAs kept heading lower while the 50-EMA maintained its bullish slope in the mentioned chart. The resistance lies at 1.2400, the support comes in at 1.2300.
MACD decreased which indicates the buyers’ positions weakening. The RSI oscillator moved upwards.
Trading recommendations
A further extension to 1.2500 is not ruled out. If buyers gather enough steam they can reach 1.2550 in the coming days.
Yen
Current situation
The US dollar managed to recover some ground during the night session on Tuesday. However, the recovery was short-lived, a selling pressure around the greenback emerged in the morning and returned the major to a downside. The spot edged lower and erased all its night gains during the European session. The pair reached opening prices ahead of the NY opening. The major continued developing well below the moving averages in the 4 hours chart. The 100 and 200 EMAs were neutral while the 50-EMA kept heading lower in the same chart. The resistance is highlighted at 113.00, the support comes in at 112.00.
MACD declined which indicates the sellers’ positions strength. RSI returned to the oversold readings.
Trading recommendations
In the 4 hours chart, the technical picture favors a downward extension. The nearest target remains the support level 112.00.
USD/CAD
General overview
The Canadian dollar strengthened ahead of Canadian Retail Sales report. Moreover, the overall US dollar weakness supported the major. Meanwhile, traders are looking forwards to Fed representative speeches on Thursday.
Current situation
The USD/CAD left its consolidation phase and edged lower on Tuesday. Sellers broke 1.3330 in the morning and continued pushing the spot lower afterwards. The major preserved its ask tone in the second part of the day. According to 4 hours chart the price was below the 100-EMA. The 100 and 200 EMAs kept pointed higher while the 50-EMA maintained its bearish slope in the same timeframe. The resistance is highlighted 1.3330, the support comes in at 1.3260.
MACD declined which indicates the sellers’ positions strengthening. RSI headed south.
Trading recommendations
A firm break below 1.3330 handle could trigger fresh weakness for attack at 1.3260.
XAU/USD
General overview
Gold remained bullish on Tuesday amid a broad based US dollar weakness. The precious metal received support from the uncertainty around French elections.
Current situation
Gold retained a neutral, short-term undertone on Tuesday. The precious metal was sandwiched between 1228 and 1235 during the night and day trades. The metal reversed some Monday's losses during the Asian hours. However, bulls just had enough strength to break 1230. The spot stayed around the level afterwards. The XAU/USD pair bounced off 200-EMA upwards in the 4 hours timeframe. The 100-EMA crossed the 200-EMA downwards. The 50-EMA and the 200-EMA pointed higher while the 100-EMA kept heading lower in the mentioned chart. The resistance is highlighted 1230, the support comes in at 1220 dollars per ounce.
MACD decreased which indicates the buyers’ positions weakening. RSI oscillator stayed near overbought levels, favoring a new move higher.
Trading recommendations
Should the gold recover ground and advance beyond the 1230 level, the rally can extend in the short term up to 1240 first.
Brent
General Overview
Oil prices remained positive on the news that OPEC may extend its supply cut. Investors waited for U.S. crude stocks figures late in the session to get fresh guidelines.
Current situation
Monday’s recovery stalled at 51.80 dollars per barrel in the night. Brent oil futures remained rather unchanged during the night trades. The European morning brought some buying interest. The benchmark left the Asian flat and climbed to 52.25 where the upward impetus lost its momentum. According to 4 hours chart black gold tested the 50-EMA upwards. The moving averages kept heading lower in the same timeframe. The resistance lies at 52.50, the support comes in at 51.50 dollars per barrel.
MACD grew which indicates the sellers’ positions weakening. RSI remained within neutral territory.
Trading recommendations
Buyers do not have enough strength to move Brent higher. Failure to hold above the 51.50 mark risks a slide to the support level of 50.50 dollars per barrel.
DAX
General overview
DAX remained positive on Tuesday following the growth of financial and Oil & Gas sectors.
Current situation
DAX remained flat on Tuesday. The index was confined to a well limited range between 12100 and 12050. The benchmark gapped higher at the open, however, the upward trajectory stalled at the upper limit of the range. The price pulled back afterwards but remained around 12100. The index continued developing well above its moving averages in the 4 hours timeframe. The 50, 100 and 200 EMAs maintained their bullish slope in the mentioned chart. The resistance exists at 12100, the support stands at 12000.
MACD decreased which indicates the buyers’ positions weakening. RSI remained within neutral territory.
Trading recommendations
If the price succeeds and fixes below the level of 12000, the market may start a new descending correction towards 11900 area. If the level stands DAX will aim at 12200.
NASDAQ
General overview
Wall Street maintained its positive mode on Tuesday awaiting for Fed speakers late in the American session.
Current situation
NASDAQ remained around its fresh highs on Tuesday. The index reversed its recent losses in the Asian session. Traders broke the 5420 level in the night and hovered above the handle in the morning and the first part of the day. According to 4 hours chart the benchmark remained above the moving averages which were all pointing higher. The resistance is at 5460, the support comes in at 5420.
The MACD histogram grew which indicates buyers’ strength. RSI oscillator stayed near overbought levels.
Trading recommendations
We expect a limited pull back to 5380 where the upward trend line lies. If the support level of 5420 breaks, the index may fall further that should send this market looking for the 5380 level. If the line stands the index will refresh its highs testing 5460.
*Analytical review is presented by the leading analyst of the broker Fort Financial Services, Alexander Kofman