Capital Trust Markets Daily Market Commentary

[CapitalTrustMarkets]

Mixed US Durable Goods sends USDCAD lower, GDP next

Yesterday at GMT 12:30 PM, US durable goods orders data was published by the US Census Bureau. The report suggested that durable goods orders increased $5.0 billion or 2.2 percent to $229.4 billion in February, exceeding the expectations of 1.0% rise. The outcome was encouraging as this upturn is after two consecutive declines. The setback was that the previous readings were revised further lower, pointing a mixed outcome. USDCAD traded lower after the data release, and challenged 1.1080 support level.

US Services PMI
The headline Flash U.S. Services PMI published by Markit Economics came better than expectations at 55.5 vs 54.2 estimate. Service sector recovered in March picking up sharply from February’s four-month low of 53.3. Other side of the story was that expansion in new business was the slowest for almost a year-and-a-half.

Technical Analysis
USDCAD after finding sellers around 1.1280 resistance zone fell sharply to register consecutive daily declines. The pair moved lower towards 1.1080 after the economic releases in the US. There is a rising channel forming on the daily timeframe for USDCAD. The pair is heading towards the channel support trend line, which might play a key role for further downside in the sessions ahead, as it also coincides with 50.0% Fibonacci retracement level of the last swing high. If channel breaks, then it might put a lot of pressure on USDCAD buyers. As of writing, USDCAD sellers are trying to push the pair below the 50-day simple moving average.

Any further downside acceleration would call for a test of next bullish trend line coinciding with the 61.8% Fib level. There is a divergence noted on the RSI between the last two highs, which suggests that recent high might be a false break. The most critical support level is seen around the confluence zone of 1.618 extension of last swing and 200 SMA. If USDCAD bounces from the channel or trend line support, then the pair can again challenge 1.1280 high.

US GDP (QoQ)
Today at GMT 12:30 PM, US Gross Domestic Product Annualized reading for fourth quarter will be released by the US Bureau of Economic Analysis. The growth rate is expected to improve from 2.4% to 2.7%. If the outcome beats the consensus, then US dollar could rebound against Canadian dollar in the NY session. On the other hand, any downside revision could encourage a downside shift for the US dollar in near term.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

GBP/USD: Trading the UK Retail Sales (Mar 27, 2014)

The UK economy is set to print its retail sales figure for the month of February in today’s London trading session. After previously showing a 1.5% decline in consumer spending, retail sales could rebound by 0.5% this time. Analysts are pricing in positive expectations since the UK economy showed a strong recovery in the jobs sector for the same month.

A review of the price reaction to the previous release in February 21, which showed a worse than expected reading, reveals that the pound price reaction tends to last by as much as 50 pips or until the next psychological support level.

A stronger than expected result might lead to more gains for GBP/USD, as the pair just came off a test of the rising trend line on longer-term time frames. Positive economic data from the UK could put the BOE back on track to tighten monetary policy ahead of other major central banks, which would then provide strong buying support for this pair.

Bear in mind that the US dollar is also under selling pressure for now, as the latest bond auction showed a flattening yield curve. Longer-term investors are foreseeing weak growth and inflation while short-term traders began pricing in a rate hike from the Fed. After all, Fed Chairperson Yellen hinted that a rate hike might take place around six months after the asset purchases end.

On the other hand, a weak reading might trigger a sharp pound selloff back to its previous lows near the 1.6500 major psychological support level. On shorter-term time frames, it can be seen that GBP/USD is stalling at a 50% Fib resistance on the latest swing high and low.

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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

AUDNZD fails to hold critical level after New Zealand trade data

Earlier in Asian session, New Zealand’s imports, exports and trade balance data was published by the Statistics New Zealand. The report suggested that total goods exports rose in February 2014. This boosted New Zealand dollar against most of the counterparts, including the Australian dollar, as AUDNZD moved lower after the release.

Release details
The trade balance registered highest-ever trade surplus ($818 million) for any February month, and the value of exported goods rose $663 million with goods exported to China rising to $388 million. The labour statistics manager Louise Holmes-Oliver mentioned in the report that “the rise in dairy this month was supported by logs and meat, with much of the increase in these commodities destined for China”. The outcome exceeded the expectation by a fair margin, which is helping the New Zealand dollar to gain strength Intraday.

Technical Analysis
AUDNZD is set to register a major failure at around 50.0% Fibonacci retracement level of the last major bear leg from the 1.0940 top to 1.0530 low. This level also coincides with a major trend line, which has acted as a resistance numerous times. However, the pair is approaching a critical channel support zone where buyers are expected to return. If the pair pushes one more time higher and succeeds in piercing the bearish trend line, then a move towards the 61.8% Fib retracement level is possible in the short term.

Any further downside acceleration, and break of the channel support region could open the doors for a move back towards 1.0600 support zone. There is a minor divergence noted on the RSI between the last two highs (1.0760 and 1.0740), which paints a mixed scenario on 4 hour timeframe. Considering that NZDUSD is reaching critical resistance levels and AUDUSD has more room on the upside, one can anticipate swing moves in AUDNZD in the sessions ahead.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

Technical analysis for March 28, 2014

EURUSD

Technical outlook and chart setups:

1.The EURUSD breaks down finally below the 1.3750 levels and bears are back in control. This could be just the beginning of a larger correction into the 1.36 and 1.34 as seen here. It is recommended to short 50% at market and remaining 50% on a pullback towards 1.3800. Risk remains above 1.3950 for now.

2.Immediate support is at 1.3700 (the bears would want to take this out first), followed by 1.3600, 1.3500 and lower, while resistance is at 1.3960/70 levels respectively.

3.The structure reveals that bears are beginning to come into play again. We need to see a break of 1.3700 to confirm the same. The pair maybe poised to resume its longer term bearish trend deep into the 1.2’s.

Trading recommendations:

Remain 50% short now, and remaining at 1.3800, stop at 1.3950, target open.




GBPUSD

Technical outlook and chart setups:

1.The GBPUSD is bouncing between the support and resistance, trapped between the two trend lines for now. The pair reversed sharply from the 1.6650 handle which is trend line resistance zone now. It is quite possible that pair continues to drift lower towards the 1.6300 and 1.6200 handle. Recommendations are to exit long positions for now. Aggressive trade setup would be to go short, risk remains above 1.6750.

2.Immediate support is at 1.6450/60 (intermediary), followed by 1.6250, 1.5850 and lower, while resistances are spread through 1.6780 and above 1.6800 respectively.

3.The structure reveals that bears might want to take back control and drift prices lower towards the 1.6200 levels. The GBPUSD pair is finding difficult to sustain above 1.6650. One can initiate further short positions if prices drop below 1.6500/1.6460 levels.

Trading recommendations:

Exit longs. Aggressive trade setup is to go short, stop at 1.6750, target open.



AUDUSD

Technical outlook and chart setups:

1.The AUDUSD pair continues to push ahead towards the 0.9300/50 handle. The decision to flip trades has proven good till now, the pair is on its way towards higher highs for now. The minimum level to watch out on the top side is 0.9350, which is also the Fibonacci 0.618 resistance of the fall from 0.9750 to 0.8650 earlier. It is recommended to reduce risk on long positions taken and stay put.

2.The immediate support is at 0.9140/50, followed by 0.9000, 0.8900/30 and lower, while resistance is now at 0.9450, followed by 0.9530 and higher respectively on the daily chart.

3.The structure remains unchanged for now and reveals that bulls should remain in control till at least till 0.9350 levels. Please note that 0.9340/50 is also confluence of Fibonacci levels (retracement of larger downswing and extension of counter up trend).

Trading recommendations:

Remain long, move stop breakeven, target at 0.9350



USDCAD

Technical outlook and chart setups:

1.The USDCAD breaks down the immediate trend line support and also takes out the immediate support level at 1.1020/30 for now. We had reduced risk yesterday to 1.1010 levels and it is recommended to remain flat for now. The pair might be placing itself for a larger correction it seems.

2.Immediate support is at 1.0950, 1.0900 and lower, while resistance is at 1.1150/70, followed by 1.1280, the recent swing highs.

3.The structure reveals that the USDCAD might undergo a larger correction, though it is too early to confirm at the moment. It is safe to step aside and watch for further developments to confirm short positions.

Trading recommendations:

Flat for now.


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Prepared by Harsh Japee, Technical Analyst at Capital Trust Markets.

 

[CapitalTrustMarkets]

EUR/USD extends slide after US job data, eyes Germany’s inflation

Euro fell broadly against the greenback on Thursday after better than expected US economic reports. The pair is eyeing Germany’s inflation report and US consumer confidence figure for short term direction; both the reports are scheduled for release today.

Technical Analysis

The pair is being traded near 1.3743 at 2:50 GMT in Asia. Immediate resistance can be seen near the 1.3800 handle that is the channel resistance, 38.2% fib level as well as psychological level. A break above the channel resistance shall open doors for further rallies toward 1.3920.

On the downside, the pair is likely to find support near 1.3717, 50% fib level, ahead of 1.3670 that is the channel support as well as 61.8% fib level. A daily close below the narrow downward slope should push the pair into stronger bearish trend, threatening the 1.3500 handle.

Reuters Consumer Sentiment Report

Today Reuters and the University of Michigan are going to release their joint US consumer sentiment report for March. The monthly report, prepared on the basis of thousands of surveys and questionnaires, shows the level of confidence among the US consumers. Generally speaking, the high consumer confidence is taken as positive for the US economy and vice versa. The report is scheduled for release at 14:55 GMT.

The consumer confidence in the US declined to 80.6 points in March as compared to 81.6 points in the previous month, says the median projection of different economists. Better than expected actual outcome will be considered bullish for the US Dollar (USD) and vice versa.

Germany Inflation

Statistiches Bundesamt Deutschland is due to release Germany’s inflation report today. According to forecast, the Consumer Price Index (CPI) declined in March to 1.1% as compared to 1.2% in the same month of the year before. Better than expected actual outcome will be bullish for EUR/USD and vice versa.

US Job Data

The number of people who claimed unemployment benefits, during the week ended on March 21, declined unexpectedly to 311K as compared to 321K in the week before, analysts had predicted an increase to 325K, a report by the US labor department revealed yesterday. Similarly, the total number of people claiming jobless benefits declined to 2.823 million during the week ended on March 15 as compared to 2.876 million in the week before, a separate report by the labor department said.

Conclusion

EUR/USD is being traded in a narrow downward slope channel; a breakout will provide clear direction to the pair.

 

[CapitalTrustMarkets]

AUDUSD challenges 0.9300 on China stimulus expectations

AUDUSD has continued to trade higher post US pending home sales data. AUDUSD buyers pushed the pair towards the key 0.9300 resistance zone in the late Asian session. The pair has managed to register four back-to-back daily gains and looks set to record fifth one.

Weak US pending home sales
Yesterday, US pending home sales data was published by the National Association of Realtors in the NY session. The outcome was slated to register 0.3 percent gain, but the report suggested that US pending home sales dipped 0.8 percent to 93.9 in February from a downwardly revised 94.7 in January. This is one of the worst performances, as it is 10.5 percent below February 2013 reading. However, the sales market appears to be steadying, according to Lawrence Yun, NAR chief economist. He mentioned in the report that “contract signings for the past three months have been little changed, implying the market appears to be stabilizing”.

China hints Stimulus
Chinese PM Li Keqiang in a statement mentioned that the government is ready to act if required and if the current slowdown deteriorates. Chinese stimulus talks mostly help the AUDUSD pair to sustain the bullish move.

Technical Analysis
AUDUSD successfully managed to close above the 200-day simple moving average, as the sellers failed to defend the 50% retracement level of the down move from October 2013 top to the recent 0.8668 low. There pair also managed to climb above a trend line. After the break, bullish move gathered pace, as the pair challenged the 0.9300 level and traded as high as 0.9294 in the Asian session. There are several resistances around the 0.9300-9360 range. One of the most critical resistance levels is 61.8% Fibonacci retracement level. This resistance zone might well act as a crucial barrier for the pair.

The broken trend line and 200-day SMA might act as support in the short term. Most indicators on the daily timeframe suggesting overbought conditions, which can result in a pullback. However, there is a bullish trend line forming on the RSI waiting to act as a support for the pair.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

USDJPY stuck in a narrow range

USDJPY is trading sideways after a failed attempt to break the 200-month moving average. The pair is stuck in a narrow range for the quite some time now. US dollar is struggling to gain traction against the Japanese yen as crisis fear in the market is far from over.

Japan’s CPI
Earlier in the Asian session, consumer price index (CPI) for Japan was released by the Statistics Bureau. The outcome was mostly in line with the expectations, as CPI for Japan in February 2014 was up 1.5% over the year to 100.7, the same level as the previous month. On the other hand, there was a surprise in the consumer price index for Ku-area of Tokyo. CPI for Ku-area of Tokyo was up 0.4% from the previous month, and up 1.3% over the year, beating the expectations of 1.2%.

US GDP
Yesterday, US Gross Domestic Product Annualized data was published by the Bureau of Economic Analysis. The report suggested that goods and services produced by labor and property increased at an annual rate of 2.6 percent in the fourth quarter of 2013, up from a previous official estimate of 2.4%. However, the outcome missed the expectations of 2.7 percent rise. This weighed on the USDJJPY bulls in the short term.

Technical Analysis
There is a triangle forming on the 4 hour time frame for the USDJPY pair. There is a monster resistance marked by the horizontal line, which also coincides with the triangle resistance zone. The highlighted multi-day resistance level is also around the 50.0% Fibonacci expansion of last leg lower from the month high to 101.20 low.

The triangle formed is bearish with support around 101.80 level. A break and close below the mentioned level might call for further downside acceleration. The pair could even challenge the previous low (101.20) in the short term. As of writing, the RSI is struggling to take over the 50 level, which is an early-warning sign.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

USDJPY broadly unchanged after Japanese Industrial Production data

USDJPY broke an important triangle last Friday, and spiked higher. The pair traded sideways for some time before buyers jumped in order to push the pair above 102.40 and 102.60 resistance levels. Earlier during the Asian session, Japanese industrial production data was published by the Ministry of Economy, Trade and Industry. The outcome was mixed, and as a result USDJPY mostly consolidated in a range.

Japan’s Industrial Production
Japan’s industrial production in February decreased 2.3% from the previous month, missing the expectations of a 0.3% gain, and IP increased by 6.9% from the previous year. Transport equipment, business oriented machinery, information and communication electronics equipment were the main industries contributing to the decrease. The report suggests that industrial production continues to show an upward movement. However, the recent slide for the first time in three months might put some pressure on the Japanese Yen in the short term.

Upcoming events: Yellen’s speech and Chicago PMI
Fed’s chairman, Yellen speech is scheduled later during the day, which might act as a catalyst for USDJPY pair. Chicago’s Purchasing Managers Index (PMI) will also be released, which is expected to register a decline of 1.3 points from 59.8 to 58.5.

Technical Analysis
USDJPY successfully managed to break the triangle formed on the 4 hour time frame. The sellers failed to defend 50% and 61.8% Fibonacci retracement levels of the last leg lower from the 103.77 high to 101.20 low. 103.40 can be seen as the next major hurdle for the bulls, followed by 103.77, which also represents the March 2014 high.

The broken triangle resistance zone might act as a support for the pair. There was a trend line break noted in the RSI as well. After the break, RSI stopped right around extreme levels. The triple confluence support zone of 200, 100 and 50 moving averages could act as a pivot zone for the pair in the sessions to come.

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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

EUR/USD: Trading Guide for Euro Zone CPI (March 31, 2014)

The euro zone is scheduled to release its CPI flash estimate for March in today’s London trading session. Analysts are projecting a 0.6% gain in consumer price levels, although the February figure already suffered a slight downward revision from 0.8% to 0.7%.

Remember that deflation is one of the concerns in the euro region at the moment, with a few ECB officials already starting to talk about further easing options. Last week, the euro underwent a sharp selloff when an ECB member hinted that the central bank might look into implementing negative deposit rates. This could keep the euro’s gains at bay while keeping price levels supported in the coming months.

A weaker than expected CPI reading would enforce the view that the euro zone is seeing weaker price gains recently, which would lead traders to price in expectations of further easing or dovish remarks in this week’s ECB interest rate statement. Although Draghi hasn’t really spoken about negative deposit rates so far, he might touch upon this issue in the ECB press conference later on.

On the other hand, a stronger than expected CPI reading might convince some traders that the ECB isn’t ready to implement more easing just yet. Draghi might simply mention that the recent slowdown in the region is merely a pullback and not a cause for concern.

EUR/USD is currently testing an area of interest around the 1.3750 minor psychological level at the moment and today’s CPI release might set the tone for its movement until the middle of the week or the actual ECB rate announcement. A bounce could take the pair back to the 1.3800 area or higher while a selloff could be indicative of more longer-term losses.

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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

GBP/USD threatens channel resistance before key economic releases

GBP/USD threatens channel resistance before key economic releases
Great Britain Pound (GBP) jumped broadly against the US Dollar (USD) last week amid better than expected Core CPI report, the pair is expected to continue the upside movement during the current week, as per technical analysis.

Technical Analysis

GBP/USD is being traded around 1.6630 at 4:15 GMT in Asia. The pair is likely to find support near the 1.6600 handle that is 38.2% fib level and psychological level, ahead of 1.6515 which is the channel support as demonstrated in the following daily chart. A break and daily closing below the channel support could push the pair into deeper correction, exposing 1.6383 and then 1.6250.

On the upside, the pair is likely to face hurdle near 1.6685, 23.6% fib level, before the channel resistance which is currently sitting in near 1.6738. A daily closing above the channel is required for further rallies above the double top pattern.

UK Consumer Credit

The Bank of England (BoE) is going to release the consumer credit report today. According to forecast, the volume of consumer credit rose to 0.70 billion pound in February as compared to 0.66 billion pound in the month before. Better than expected actual outcome will be seen as bullish for GBP/USD and vice versa.

Mortgage Approvals

BoE’s Mortgage Approvals report is also due today. The number of approvals declined to 75.000K in February as compared to 76.947K in the month before, the median projection of different analysts says. Generally speaking, high number of mortgage approvals is considered positive for the housing sector and the overall economy.

Conclusion

An upside breakout through the rising wedge formation might be in play this week if the UK comes better than expectations. In long term, the pair is headed to the pre-recession levels; fresh highs above the 1.6850 are very likely in the near future.

 

[CapitalTrustMarkets]

Technical Analysis for March 31, 2014

EURUSD

Technical outlook and chart setups:

1.The EURUSD 4H chart view has been presented here. The support trend line has been broken already and prices are clearly in the sell zone for now. Furthermore, the 1.3700/20 level has been breached on Friday, before rallying higher up. The fall from 1.3960 to 1.3700/20 could be an impulse wave. A counter trend rally can be expected towards 1.3850/60 before prices continue to move lower.

2.Immediate support is at 1.3640/50 followed by 1.3600, 1.3500 and lower, while resistance is at 1.3960/70 levels respectively.

3.The structure reveals that a counter rally is possible towards 1.3850/60 levels now. Fresh short positions can be initiated there. Bears would want to target the 1.35’s and 1.33’s.

Trading recommendations:

Remain 50% short now, and remaining at 1.3850/60, stop at 1.3950, target open.





GBPUSD

Technical outlook and chart setups:

1.The GBPUSD pair is facing resistance at the back side of the support line as seen here. A bearish trade signal here would drag prices lower towards 1.6200 levels. The 1.6650 handle is providing good resistance at the moment. A push through it higher, would be discouraging to the bears.

2.Immediate support is at 1.6450/60 (intermediary), followed by 1.6250, 1.5850 and lower, while resistances are spread through 1.6780 and above 1.6800 respectively.

3.The structure reveals that bears might want to take back control and drift prices lower towards the 1.6200 levels. The GBPUSD pair is finding difficult to sustain above 1.6650. One can initiate further short positions if prices drop below 1.6500/1.6460 levels.

Trading recommendations:

Remain short from last weeks’ setup; stop at 1.6750, target open.





AUDUSD

Technical outlook and chart setups:

1.The AUDUSD pair seems to be reversing before 0.9350 levels (the 0.618 Fibonacci resistance). Prices are putting up an evening star bearish trade signal at the moment. It is recommended to exit long positions and initiate 50% short positions now. The pair could possibly continue to drift lower from here on.

2.The immediate support is at 0.9140/50(past resistance turned support), followed by 0.9000, 0.8900/30 and lower, while resistance is now at 0.9450, followed by 0.9530 and higher respectively on the daily chart.

3.The structure is beginning to show up a possible reversal here. Please note that 0.7950/0.8000 is the handle where bottom formation is likely. The counter trend line needs to break for acceleration.

Trading recommendations:

Exit long positions. Enter 50% short now (0.9230), stop at 0.9370/80, target is open.





USDCAD

Technical outlook and chart setups:

1.The USDCAD pair seems to be preparing for a bounce back at least towards 1.1170 levels. As seen here, the immediate support at 1.1020 has been taken out by bears for now. It is recommended to sell rallies into 1.1150/70 levels for further down side extensions.

2.Supports are spread through 1.0950, 1.0900 and lower, while resistance is at 1.1150/70, followed by 1.1280, the recent swing high.

3.The structure reveals that USDCAD should stage a counter trend rally after taking out support at 1.1020 levels last week. The broken support trend line should provide resistance towards the 1.1100 region.

Trading recommendations:

Remain flat for now.



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Prepared by Harsh Japee, Technical Analyst at Capital Trust Markets

 

[CapitalTrustMarkets]

Technical Updates for April 01, 2014

EURUSD

Technical outlook and chart setups:

1.The EURUSD rallied to the immediate fibonacci resistance into 1.3800 areas yesterday before pulling back again as seen here. Bears seem to be inclined to take out 1.3650/40 levels for now. A break there would open up further downside for the pair towards 1.35 and 1.32 respectively.

2.Immediate support is at 1.3640/50 followed by 1.3600, 1.3500 and lower, while resistance is at 1.3875, followed by 1.3960/70 levels respectively.

3.The structure reveals that a counter rally is possible towards 1.3850/60 levels now. Before that if 1.3640/50 support is taken out, the bearish setup confirms further downside for the pair. Bears would want to target the 1.35’s and 1.33’s later.

Trading recommendations:

Remain 50% short now, and remaining at 1.3850/60, stop at 1.3950, target open.





GBPUSD

Technical outlook and chart setups:

1.The GBPUSD remains locked between trend lines for now. Probability remains both sides for now, and prices need to either break lower towards 1.63/1.62 or higher towards the 1.6750 region to instil directional confidence. The 1.6600/50 handle is providing resistance for now at the same time, prices have bounced off from the trend line and fibonacci support from 1.6460/70 levels last week.

2.Immediate support is at 1.6450/60 (intermediary), followed by 1.6250, 1.5850 and lower, while resistances are spread through 1.6780 and above 1.6800 respectively.

3.The structure reveals that 1.6200 handle or the 1.6700/80 handle needs to be taken out to confirm further direction movement in GBPUSD. Short positions can be held though, for now.

Trading recommendations:

Remain short; stop at 1.6750, target open.





AUDUSD

Technical outlook and chart setups:

1.The AUDUSD turn from the 0.5% fibonacci retracement might still be a bit premature to materialize further. Prices need to push higher. Probably into the 0.9350 handle before reversing. 50% short positions can be held and remaining can be initiated around 0.9350 regions.

2.The immediate support is at 0.9140/50(past resistance turned support), followed by 0.9000, 0.8900/30 and lower, while resistance is now at 0.9450, followed by 0.9530 and higher respectively on the daily chart.

3.The structure reveals that bulls might want to push prices higher towards 0.9350 levels at least before giving up. The weekly chart setups indicate that a final downswing still remains for bottom formation into the 0.8000 region.

Trading recommendations:

Enter 50% short now (0.9230), stop at 0.9450, target is open.





USDCAD

Technical outlook and chart setups:

1.After breaking down the immediate trend line support, the USDCAD pair seems to be readying itself for a pullback rally into the 1.1150/70 handle at least. Short term trade setup is to go long and then reverse on a bearish bounce.

2.Supports are spread through 1.0950, 1.0900 and lower, while resistance is at 1.1150/70, followed by 1.1280, the recent swing high.

3.The structure reveals that a counter trend rally could resume any moment now. Medium term support at 1.0950 is intact for now, and that should hold if bulls want to remain in control further.

Trading recommendations:

1.Initiate ling positions now at 1.1050 levels, stop at 1.0950, target is open.
2.Reverse positions only on a bearish setup higher up.




Prepared by Harsh Japee, Technical Analyst at Capital Trust Markets

 

[CapitalTrustMarkets]

Upside breakout keeps EUR/JPY higher, 145.00 eyed

EUR/JPY yesterday closed above the channel resistance and 61.8% fib level, breaking a key resistance zone, the pair is now all set to extend the upside movement above the 143.00 handle.

Technical Analysis

The Pair is being traded around 142.17 at 1:50 GMT in the Asian session. Support may be noted near 142.00, the psychological level and 61.8% fib extension, ahead of the channel resistance turned support which is currently sitting in around 141.65. A break and daily close below the channel might push the pair again into bearish trend, exposing the 140.00 handle.

On the upside, hurdle can be seen near 143.37, 76.4% fib level, and then 143.78, the swing high of the previous wave. A break above 143.78 will result in the fresh 2014 high, opening doors for the 145.00 handle.

Germany Unemployment

Germany’s unemployment report is scheduled for release today. The rate of unemployment remained unchanged at 6.8% last month compared with the same rate in March 2013, the average projection of different economists suggests. Better than anticipated jobless rate will be considered bullish for EUR/JPY.

US Manufacturing Activity

Markit Economics is going to release the US manufacturing report today. The manufacturing activity in the World’s largest economy was seen standing 57.1 points in February; a higher reading will be seen as bullish for both the USD/JPY as well as EUR/JPY.

Japan Industrial Data

The manufacturing activity in the World’s third largest economy rose slower than expectations in the first quarter of the year 2013, a report by the Tankan Group revealed today. The manufacturing index increased to 17 points in the first quarter compared with 16 points in the month before, analysts had predicted an increase to 18 points hence the data downbeat the expectations. EUR/JPY extended the upside movement following the manufacturing data and the same trend is likely to last in the near future.

Conclusion

An upside breakout through the daily triangle will keep the pair into bullish momentum, exposing the 145.00 handle in medium term unless the price breaks and once again closes below the trendline.

 

[CapitalTrustMarkets]

Silver halts slide around decisive support area before US manufacturing PMI

Silver halts slide around decisive support area before US manufacturing PMI
Silver held off the critical support area around $19.70 yesterday and the same the same trend is being observed on Tuesday despite the manufecturing slowdown in China, the largest consumer of the white metal.

Technical Analysis

Silver is being traded near $19.70 at 5:30 GMT in Asia. Support can be noticed near $19.65 which is the trendline support and 23.6% fib extention. A break and daily closing below the channel could push the metal into deeper correction, threatening the double bottom support area.

On the upside, the precious metal could face the hurdle near $20.25-$20.35 an ounce which is a confluence of some major levels like 38.2% fib extension, 100 Daily Moving Average (DMA) and 55 DMA. The metal is bullish in long term due to Higher High (HH) and Higher Low (HL) in the previous wave.

Yellen Remarks

Silver could not gain bullish momentum yesterday despite dovish remarks from the Fed chair Janet Yellen. She said the US economy still requires the stimulus, opposite to her previous stance which we saw during the monetary policy press conference on March 19. The dollar weakened and the stock markets rallied after the speech.

US Manufacturing PMI

Today, the Institute of Supply Management (ISM) is scheduled to release the Manufacturing PMI report for the US. The industrial activity increased to 54 points this month compared with 53.2 points in February, the average forecast of different economists says.

Conclusion

Silver is battling a decisive support area; a breakout will provide clear direction to the precious metal. Keeping in view the ongoing Russia-West crisis and supply concerns about Silver, the metal might end the correction phase around the current levels.

 

[CapitalTrustMarkets]

EURUSD jumps after improved German Unemployment data

EURUSD buyers were unfazed by the preliminary inflation report for the Euro zone released yesterday. The report suggested that Euro area annual inflation is expected to be 0.5% in March 2014, down from 0.7% in February. The outcome was on the negative side, as it might weigh on the ECB to act in the coming meetings. EURUSD spiked lower towards 1.3710, and then traded back above 1.3780 level.

German Unemployment report
About an hour ago, German unemployment data was published by the German Statistics Office. The outcome was surprising, as roughly 41.7 million persons resident in Germany were in employment in February 2014, and German unemployment rate now stands at 6.7%, beating the expectations of 6.8%. The previous reading was also revised lower from 6.8% to 6.7%. Overall, data was impressive, and as a result EURUSD jumped higher to overtake the 1.3780 level again.

Technical Analysis
EURUSD is approaching 38.2% Fibonacci retracement level of the last leg lower from 1.3972 high to recent 1.3710 low. The pair has breached the 50 and 200 simple moving average on the 4 hour timeframe. There is a channel forming, which can act as a catalyst for the pair in the coming days. On the upside, 1.3840 level might act as a hurdle for the pair. It represents triple confluence zone of 50% Fibonacci retracement level, channel resistance zone and 100 SMA. A break above this resistance zone might open the doors for a test of 61.8% Fib level.

On the downside, 50 simple moving average is seen as immediate support, followed by 1.3750, where buyers have appeared time and again. Any further bearish momentum might take the pair towards the channel trend line and previous swing support zone at around 1.3700 level.

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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

AUDNZD under pressure post RBA rate decision

During the previous Asian session, the Reserve Bank of Australia announced the cash rate. The central bank kept the cash rate at a record low of 2.5 percent. AUDUSD pair traded higher after the release, but fell back to test 0.9250 support level. Comparatively, the New Zealand dollar is trading higher, which has added pressure on AUDNZD pair.

Highlights of RBA Statement
The official statement from the RBA was mostly unchanged from the last meeting. In terms of economy, the central bank mentioned that global economy was a bit below trend in 2013, and China's growth remains generally in line with policymakers' objectives. They highlighted that “continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years”

Technical Analysis
AUDNZD is flirting with an important bullish trend line, which has acted as a support a number of times. 1.0650 level is the support to monitor, as a break lower might trigger further losses towards the 50.0% Fibonacci retracement level of the last bull wave from 1.0537 low. The sellers have managed to take the pair below all three important moving averages (200, 100 and 50) on the 4 hour timeframe. There is also a trend line break noted in the RSI, which is an early-warning sign of a break.

AUDNZD buyers struggled to take the pair higher above the 1.0700 figure, which might again act as a barrier if the pair bounces from the current levels. On the downside, 61.8% Fib retracement level must hold to prevent further bearish momentum in the pair.

Australia’s Building Permits
During next Asian session, Australia’s building permits data will be published, which is expected to register a decline. If the outcome manages to surprise, then it might help AUDNZD pair to recover some ground.

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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

AUD/USD confirms 0.9300 resistance with double top formation

The Reserve Bank of Australia once again left the cash rates at 2.5%, as expected by the market. This decision is neutral, so USD will remain the main driver today. ISM Manufacturing PMI will be the report carrying the most impact for the market. If the is near expectations or exceeds it, we might see an accelerated dip in search of a strong low in the uptrend.

Since crossing above the 200-Day Moving Average, AUD/USD quickly covered the ground to 0.9300. This price pivot zone dates back to the middle of 2013, providing resistance and support for quite a number of major swings.

Technical Analysis

The pair was unable to close above the 0.9300 pivot zone in the last business days. The second failed attempt lead to the formation of a short term double top, a reversal pattern also confirmed by a bearish engulfing 4H bar. Stochastic is in overbought territory on the Daily timeframe, while the daily range for the last three business days has been below the average, with buying pressure slowly decreasing.

The reversal based on the double top formation will be further confirmed if AUD/USD drops below 0.9217. This move would open the way towards 0.9137 in the coming days, where the uptrend could find a strong low before continuing upwards.

A break-out above 0.9300 will invalidate further take profit and correction scenarios, in which case the uptrend will aim directly towards 0.9530.

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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

Technical Updates for April 02, 2014

EURUSD

Technical outlook and chart setups:

1.The EURUSD pair is facing resistance around the 1.3800/20 region. Please note, this is backside of the support line as well. More probable direction from here is lower towards 1.3640/50 levels. The outer trend line support line is also seen to be passing through the 1.3620/30 handle for now. A more bearish formation could possibly be on its way, remain short for now.

2.Immediate support is at 1.3640/50 followed by 1.3600, 1.3500 and lower, while resistance is at 1.3875, followed by 1.3960/70 levels respectively.

3.The structure reveals that a counter rally might be running out of steam ahead of 1.3850/60 levels now. The 1.3640/50 support should remain immediate target for bears to remain in control here.

Trading recommendations:
Remain 50% short now, and remaining at 1.3850/60, stop at 1.3950, target open.





GBPUSD

Technical outlook and chart setups:

1.The GBPUSD pair is facing resistance at 1.6650/70 levels as seen here. Prices are seen reversing, by forming an engulfing bearish candlestick signal from the 1.6670 levels. The intermediary support at 1.6460 should be taken off to confirm further bearish setup into the 1.6200 handle. It is still recommended to hold short positions, risk remains around 1.6750 levels.

2.Immediate support is at 1.6450/60 (intermediary), followed by 1.6250, 1.5850 and lower, while resistances are spread through 1.6780 and above 1.6800 respectively.

3.The structure reveals that GBPUSD bears might be inclined to drag prices towards 1.6200 from here. 1.6460 remains the key for now. Short positions can be held though.

Trading recommendations:
Remain short; stop at 1.6750, target open.





AUDUSD

Technical outlook and chart setups:

1.The AUDUSD re-tests the 0.9300 handle before reversing yesterday. Please note that past support turned resistance zone is coming into play here. A push below the 0.9200 handle would confirm that a lower top is in place for now and the pair is headed lower towards at least the 0.9100 levels from here on. It is recommended to remain 50% short for now, risk remains at 0.9450 levels.

2.The immediate support is at 0.9140/50(past resistance turned support), followed by 0.9000, 0.8900/30 and lower, while resistance is now at 0.9450, followed by 0.9530 and higher respectively on the daily chart.

3.The structure reveals that bulls now need to clear 0.9300 handle to remain in control. The recent fall could still be considered as a retracement but a break below the counter trend line support at 0.9000/50 level would confirm that AUDUSD is set to print lower lows and lower highs.

Trading recommendations:
Remain 50% short now, stop at 0.9450, target is open.





USDCAD

Technical outlook and chart setups:

1.The USDCAD has still not begun its counter trend rally as it was expected and discussed yesterday. The trend line resistance is around 1.1110/20 region for now and rising with each passing day. Long positions can be held (counter trend rally can still materialize), risk remains at 1.0950.

2.Supports are spread through 1.0950, 1.0900 and lower, while resistance is at 1.1150/70, followed by 1.1280, the recent swing high.

3.The structure reveals that USDCAD could resume rally towards at least the backside of the trend line around 1.1120 levels. Please note that upside potential still remains. Medium term support at 1.0950 is intact for now, and that should hold if bulls want to remain in control further.

Trading recommendations:
1.Aggressive setup, would be to remain long at 1.1050 levels, stop at 1.0950, target is open.

2.Reverse positions only on a bearish setup higher up.





Prepared by Harsh Japee, Technical Analyst at Capital Trust Markets

 

[CapitalTrustMarkets]

GBPUSD continues to hold 50-day SMA

Cable managed to pop higher and close above 50-day simple moving average during last week. GBPUSD dipped yesterday after disappointing UK manufacturing PMI figures, and fell close to 50-day SMA where buyers reemerged. In the short term, it looks like GBPUSD pair is heading towards a critical break.

UK Manufacturing PMI
During the yesterday’s European session, UK Manufacturing Purchasing Managers Index (PMI) was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The outcome was disappointing, as Manufacturing PMI was down from 56.2 to 55.3, missing the forecast of 56.7. The previous reading was also revised lower from 56.9 to 56.2. This is lowest seasonally adjusted Markit/CIPS PMI in the last eight months. However, the report mentioned that “the PMI nonetheless remains well above its long run average of 51.4 and has highlighted an improvement in operating conditions in each of the past 12 months”. GBPUSD dived towards 1.6620 level in an early reaction, but later managed to recover some ground.

UK Nationwide HPI
Today at GMT 06:00 AM, UK’s Nationwide Housing Price Index (HPI) data will be published. The forecast is slated for an improvement, and if outcome does not disappoint, then GBPUSD might find buyers Intraday.

Technical Analysis
GBPUSD has managed to hold 50-day SMA after yesterday’s decline. There is a triangle forming on the 4 hour timeframe, and GBPUSD is testing triangle support as of writing. It’s important to note that recent rally failed around a critical juncture. The buyers failed to take the pair higher above 61.8% Fibonacci retracement level of the last leg lower from 1.6828 high to 1.6462 low. There is a confluence of two trend lines meeting around the same level, which increases the significance of resistance. A break above this zone might encourage buyers to take the pair higher.

On the downside, triangle support area holds a lot of importance, as a break below might take the pair lower. 50 and 100 SMA confluence zone on 4 hour timeframe might act as a barrier for sellers after the break. There are divergence noted on RSI between last three highs, which is a negative sign.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets

 

[CapitalTrustMarkets]

EUR/USD Fundamental Analysis: US Jobs Market

Price action for EUR/USD has been driven partly by monetary policy expectations for the US Federal Reserve. In recent interest rate statements, the US central bank has repeatedly emphasized the importance of seeing a recovery in the labor market, as jobs indicators have been part of their consideration when it comes to adjusting policy.

With that, the non-farm payrolls release tends to influence long-term price action on most dollar pairs, including EUR/USD. A stronger than expected labor report has led to dollar buying, as it has put the Fed closer to achieving its unemployment rate target, while a weaker than expected NFP reading typically spurs a dollar selloff because it hints of a longer period of easy monetary policy.

Just recently though, Federal Reserve Chairperson Janet Yellen announced that the Fed would no longer be looking solely at the unemployment rate when it comes to figuring out when to start hiking interest rates. While she mentioned that other labor indicators will also be scrutinized, she also said that a rate hike might take place around six months after asset purchases end. However, she took a more dovish stance when she also pointed out that the labor market is still weak and that it could use more support from continued stimulus.

Jobs data should then have a strong impact on directing dollar direction in the long-term and recent data has reflected a bit of a pick-up. Recall that hiring conditions turned bleak a few months back when extreme weather conditions weighed on overall economic activity and it remains to be seen whether the US economy has been able to recover from this rut or not.

A strong non-farm payrolls figure would mark the second consecutive month of upbeat labor market gains, which would convince several market participants that the Fed is on track to tightening monetary policy ahead of several major central banks. Bear in mind that the issue of negative deposit rates has recently popped up from a few ECB officials, along with the suggestion of increasing LTRO operations.

The EUR/USD chart for this year so far shows how the pair usually starts a trend based on the jobs data released by the US economy. Notice that the pair is stalling at an area of interest lately, as traders sit tight ahead of the top-tier release which could dictate the dollar’s trend for the next few weeks or months.


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Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets