Technical Analysis

Several words about the EUR/USD future.
Resistance (daily close) : 1.3182, 1.3364, 1.3590 and 1.3778. After that 1.3958, 1.4186 and 1.4400. Break of the latter will give 1.4490, 1.4692

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EURUSD is facing the resistance of the upper line of the price channel on 4-hour chart, a clear break above the channel resistance will indicate that the fall from 1.3201 had completed at 1.2955 already, then the following upward movement could bring price to 1.3500 area. However, as long as the channel resistance holds, the downtrend from 1.3201 could be expected to resume, and one more fall to 1.2900 area to complete the downward movement is still possible.





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EUR/USD Current price: 1.3088

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The EUR/USD reached key resistance area at 1.3115, retracing from the top of these last two weeks range, helped by an overall optimism across the boards. *The hourly chart shows 20 SMA heading strongly up below current price, while indicators stand in positive territory, although with no strength at the time being. In the 4 hours chart there’s a slightly bullish tone as indicators head higher above their midlines, yet holding near their midlines, reflecting not much buying interest around. A break above 1.3115 should signal an upward continuation up to 1.3150 price zone, probable top for today, while a retracement back below 1.3070 will likely see the pair addressing back towards the 1.3010/40 price zone.
Support levels: 1.3075 1.3040 1.3000*
Resistance levels: 1.3115 1.3150 13200
GBP/USD Current price: 1.5514*

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The GBP/USD retraces from 1.5545 daily high although holds above 20 SMA in the hourly chart, that offers short term support, while indicators head slightly higher, still above their midlines. In the 4 hours chart technical readings hold in overbought territory, aiming slightly lower and pointing for a correction: 1.5490 stands as immediate support, ahead of stronger one around 1.5420, Fibonacci level.
Support levels: *1.5490 1.5450 1.5420*
Resistance levels: 1.5540 1.5585 1.5610
USD/JPY Current price: 97.81

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The USD/JPY hovers around the daily opening, maintaining the bearish tone seen on previous update: the pair has extended its slide to 97.43 overnight, fresh 2-week low, while technical readings in the hourly chart retrace from their midlines and head back south. Mostly flat, further bearish momentum may be seen on a break below 97.20 support, while the upside remains capped now by 98.20.
Support levels: 97.50 97.20 96.80
Resistance levels: 98.20 98.60 99.10 *
AUD/USD: Current price: 1.0329

View Live Chart for the AUD/USD (select the currency)

The AUD/USD gathered upward momentum, reaching 1.0350 where hourly indicators reached overbought readings. Ahead of Central Banks later this week, investors maintain the ranges and rush to take profits outside the table, main reason of latest short term fall rather than selling interest. In the 4 hours chart a limited upward momentum persists, although a break below 1.0310 will expose the 1.260/80 lows today.
Support levels: 1.0310 1.0260 1.0220*
Resistance levels: 1.0350 1.0380 1.0410
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Analysis for April 30th, 2013
GBP/USD

GBPUSD, Time Frame H4 – Indicator signals: Tenkan-Sen and Kijun-Sen intersected inside Kumo Cloud and formed “Golden Cross” (1); Kijun-Sen and Senkou Span A are directed upwards, other lines are horizontal.
Ichimoku Cloud is going up (2), Chinkou Lagging Span is above the chart, and the price is in the channel between Tenkan-Sen and Kijun-Sen. Short

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Precious metals surge on physical demand, weaker greenback

Precious metals rebounded on Monday as lower prices lured more buyers in China, India and Turkey. Moreover, weaker greenback coupled with speculation the Fed will keep its policy loose in wake of recent GDP data pushed the commodity sector higher. Meanwhile, ETPs holdings continued to decline.
Gold soared on talks about large number of people buying the bullion, especially in Turkey, India, Thailand and China. Central banks also continued to buy the yellow metal, with Russia and Kazakhstan boosting reserves for the sixth month in a row, reported the IMF. Meanwhile, assets in ETPs declined 168.22 metric tonnes to 2,281.62 tonnes on Monday, the biggest-ever monthly drop.
Silver jumped amid strong physical demand from Asia. Silver Bullion Pte, one of the largest Singapore producers of coins and bars, reported that its holdings of bars dropped to 54 ounces from 60,000 ounces about two weeks ago.
Platinum and Palladium also joined the rally amid weaker U.S. Dollar and hopes the Fed will continue its growth-boosting measures. However, a recent decline in automobile demand in Europe as well as easing supply worries in South Africa limited gains of the platinum group metals.
Industrial metals climbed after Italian bond sale

Industrial metals were bullish on Monday after the borrowing costs of Italy declined to a several-year low at the government bond auction, signaling investors are more optimistic about economic prospects of the region. Meanwhile, market players were cautious ahead of key data releases from all over the world due on Tuesday.
Aluminum climbed as LME inventories continued to decline last week. Stocks at the LME dropped 37,450 tonnes in the week ended April 26. Adding to gains, the International Aluminum Institute reported global aluminum inventories dipped 2,000 metric tonnes last month.
Copper rebounded despite weak industrial output numbers from South Korea and Japan. The red metal also was pressurized by expectations of a global surplus this year and a 5,250-tonne jump in LME inventories last week.
Nickel rose, tracking performance of other base metals. However, the upswing was restricted by a 3,270-tonne increase in LME supplies last week.
Zinc traded in the positive area as the data revealed LME stocks fell 30,174 tonnes last week, while those at SHFE declined 5,248 tonnes.
Energy futures jump ahead of API and EIA supply reports

Energy futures except for heating oil moved higher on Monday despite speculation that U.S. inventories increased last week to climb above a 22-year high. Lower yields on Italian bonds coupled with weaker U.S. Dollar and ideas the Fed will stick to its ultra-easy policy were supportive for the commodity group.
Crude and Brent oil advanced ahead of the EIA report due on Wednesday. The U.S. stockpiles are expected to have climbed 0.8-million-barrels last week compared to a 0.9-million-barrel increase in the preceding week. Currently, U.S. inventories hover near the highest level since July 1990. Meanwhile, the EIA reported U.S. exports of the commodity soared to a 10-year high in February.
Natural gas skyrocketed on easing concerns over elevated U.S. inventories. Natural gas stocks rose less than expected last week, according to the EIA data. Moreover, natural gas gained inspiration from forecasts pointing to warmer weather next week, which may boost consumption of cooling fuel.
Heating oil was steady on speculation U.S. distillate fuel inventories rose 250,000 barrels last week. Moreover, traders were cautious ahead of the supply data from the API and EIA due on Tuesday and Wednesday.
Farm commodities bullish as U.S. weather slows planting

Farm commodities apart from coffee ended Monday’s session on the positive note as cold and wet weather in the U.S. Great Plains created a supply risk premium for grains. Supporting softs, Unica crop forecasts came smaller-than-expected.
Wheat surged on concerns over freeze damage to U.S. hard winter wheat. Experts predict U.S. winter wheat production to decline 6-7 million tonnes. However, the support may vanish as weather forecasting models call for more favorable weather in Kansas, Texas and Oklahoma.
Corn soared the most in 10 months as rains and cold temperatures are delaying planting in the U.S. According to the latest USDA data, U.S. farmers sowed only 5% of crops last week compared to a five-year average of 31%. Adding to gains, hedge funds closed a large number of short positions, buying 26,000 contracts.
Sugar extended gains after Unica reported cautious estimates for an increase in Brazil’s Centre South productions in 2013-14 season, citing rain delays in the first weeks of harvesting. Unica expects output to grow 4.1% this season.
Coffee retreated as Guatemala started to implement measures to combat with coffee leaf rust that has already caused a 15% crop loss this year.
EXPLANATIONS

Commodities

• Gold - spot 995 fine gold
  
• Silver - spot 999 fine silver
  
• Platinum - spot platinum with minimum purity 99.95%
  
• Palladium - spot palladium with minimum purity 99.95%
  
• Aluminium - three-month forward contract on the London Metal Exchange
  
• Copper - three-month forward contract on the London Metal Exchange
  
• Zinc - three-month forward contract on the London Metal Exchange
  
• Nickel - three-month forward contract on the London Metal Exchange
  
• Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange
  
• Brent oil - Brent oil active contract on the New York Mercantile Exchange
  
• Natural Gas - natural gas active contract on the New York Mercantile Exchange
  
• Heating oil - heating oil active contract on the New York Mercantile Exchange
  
• Sugar - white sugar active contract on the Chicago Board of Trade
  
• Wheat - wheat active contract on the Chicago Board of Trade
  
• Coffee - benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange
  
• Corn - corn active contract on the Chicago Board of Trade

Indices

• Dow Jones - UBS Precious Metals Subindex Total Return - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement
  
• Dow Jones - UBS Industry Metals Subindex Total Return - commodity group subindex composed of futures contracts on aluminium, copper, nickel and zinc; the index reflects return on fully collateralized futures positions
  
• Dow Jones - UBS Energy Subindex Total Return - commodity group subindex composed of futures contracts on crude oil, heating oil, unleaded gasoline and natural gas; the index reflects return on fully collateralized futures positions
  
• Dow Jones - UBS Agriculture Subindex Total Return - commodity group subindex composed of futures contracts on coffee, corn, cotton, soybeans, soybean oil, sugar and wheat; the index reflects return on fully collateralized futures positions

Chart

• SMA (20) - Simple Moving Average of 20 periods
  
• SMA (60) - Simple Moving Average of 60 periods
  
• Correlation - a statistical measure of the linear relationship of two random variables. It is defined as the covariance divided by the standard deviation of two variables

Indicators
Daily Ranked Price Moves - daily price changes in an ascending order for positive changes and in a descending order for negative or mixed changes
Monthly Ranked Price Moves - monthly price changes in an ascending order for positive changes and in a descending order for negative or mixed changes


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EUR/GBP: 4-hour
Here's a Fib play on EUR/GBP. The pair has just formed reversal candles around the 38.2% Fib level and Stochastic is sporting a bearish divergence by making higher highs while price is making lower highs. It might be a good idea to jump in on a short. But don't get too excited! A strong break above .8475 could be a sign that price is headed to .8600.

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Good Morning,
On the heels of last night's post, the USD is holding in against the CAD. But as we know, equity prices are trying to grind to higher levels which could drag the USD lower as oil prices continue their rise.
Keep an eye on these technical levels as the trading day goes on. But for now, I would like to preview this week's fundamentals:
**CHPM - a look at the manufacturing sector (which showed weakness in the form of Philly and NY). Look at the employment and new orders components as well
**Consumer confidence - follows the equity markets, so this should be at or above expectations
**FOMC Statement - this is the biggy for the week
**ISM Manufacturing - see if the regional indexes provide a clue for the national index - again - pay attention to the sub-indexes
**ADP Payrolls - a non-factor
**Weekly claims - will they continue to stay near the "healthy" 350k average?
**ECB Press Conference - another biggy!
**Employment Data - expectations around 150k. I believe 145k is reasonable, but hard to tell after last month's huge miss.
**ISM Services - should be better than any manufacturing number, but if it slips more than expected...
Overall, the Central Banks are still the focus and they are still in charge. Is there any reason to think that the statement could be more doveish or more hawkish than expected? More hawkish than expected is very, very hard to fathom.
Happy Trading and Be Environmentally Cool
Coach Brian


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Highlights

• Summary Outlook
• Market Forecast

Summary Outlook:

On Wednesday, May 1st at 14:00ET/18:00GMT, the FOMC will conclude their 2-day meeting and we do not anticipate any major changes to monetary policy or the Fed’s current $85B a month pace of Quantitative Easing – $45B of Treasuries and $40B of Mortgage-backed securities (MBS). Under this scenario, the markets will likely focus on the tone of the FOMC statement and for any potential indication on what may cause a change in the size, pace or composition of the Fed’s current asset purchases.
With weakness in the US economy reemerging, as witnessed by the March employment report, retail sales figures and 1Q GDP, it has prompted many market participants to back away from their calls of QE “tapering” within the imminent future. At the March FOMC press conference, Bernanke alluded to the fact that the Fed may adjust the “flow rate” of QE purchases, but it would not be changed frequently or at every meeting and most importantly not until the FOMC sees a meaningful improvement in the US economy. Consequently, the recent downturn in economic data has even sparked some to speculate that the Fed may even provide more accommodation via an increase in the $85B a month of QE, especially when we look at the Fed’s favorite inflation measure, core-PCE, which recently fell to 1.1% YoY and is nowhere near the FOMC’s highlighted 2.0% level. While we believe an increase to the monthly flow is highly improbable at present, it could see the FOMC lengthen the time period over which they perform Quantitative Easing – although it was already open-ended.
Strategically, it may be imprudent for the FOMC to alter their course at the current meeting. First, this meeting will not be associated with a summary of Economic Projections nor a press conference by Chairman Bernanke. This in itself could be a hint that the Fed is unlikely to take action since Bernanke cannot explain the committee’s rationale of any measures. Additionally, by keeping the status quo the Fed would actually gain not one, but two, looks at the U.S. employment report prior to their meeting in June – the April Employment report this Friday and the May report on June 7th. Furthermore, the ECB announces their interest rate decision on Thursday and while financial conditions are clearly not booming here in the United States, the economic situation in Europe is arguably the primary headwind facing the global economy. Consequently, it may be wise for the Fed to wait and see if the European Central Bank takes action, as the market has already priced in a 25bp rate cut to bring the ECB’s benchmark rate to 0.50%. Altogether, this makes it increasingly unlikely for the FOMC to take decisive action at the upcoming meeting.
Market Forecast:

Our primary scenario is for the Fed to remain on the sidelines, and as such it may see a rather limited reaction in risk assets and the dollar. Likewise, the recent US data deterioration has nearly extinguished all talk of Fed “tapering” and the market has already responded to this by selling the USD prior to the FOMC meeting over the past few days.
Technically, many of the FX majors are either nearing or testing their respective 100-day sma’s – EURUSD: 1.3160, GBPUSD: 1.5565, AUDUSD: 1.0395 and USDCAD: 1.0075; consequently the outcome over the next few sessions could mark a key turning point for the USD longer-term. Additionally, it may also be prudent to keep an eye on other U.S. market bellwethers for a potential indication of the direction of the dollar, as the S&P500 is nearing its all-time high of 1597.35 and the US 10-year yield remains near the April lows around 1.63/64%. Traditionally, a move higher in US equities and treasury yields would elicit a further decline in the USD and vice versa, though this is not always a certainty.


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USDJPY continues its sideways movement in a range between 95.83 and 99.94. As long as 95.83 support holds, the price action in the range is treated as consolidation of the uptrend from 77.14 (Sep 13, 2012 low), one more rise towards 105.00 could be expected after consolidation, and a break above 99.94 could signal resumption of the uptrend. On the downside, a breakdown below 95.83 support will indicate that the uptrend from 77.14 had completed at 99.94 already, then pullback to 90.00 area could be seen to follow.




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GBP/USD: 4-hour



Is Cable finally running out of fuel?! On the 4-hourtimeframe we see that a couple of reversal candlesticks have just materializedand Stochastic is showing a bearish divergence (it's making higher highs whileprice is making lower highs). If you're looking for a chance to jump in on therally, this may just be your chance! We could see a pullback to 1.5400 wherethe 50% Fibonacci retracement level, trend line, and previous resistance areacoincide. Would you take it?


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