Daily Outlook - Commodities Crash Again

By @ibtimes on

U.S. Dollar Trading (USD) Oil led the commodity sector lower and Equities also fell giving the Dollar a bullish tone. March Trade Balance weakened to a 48.2bn Deficit in March. Many analysts are cautioning the market correction could still have room to run and as such the USD will do well. In US stocks, DJIA -130 points closing at 12630, S&P -15 points closing at 1342 and NASDAQ -26 points closing at 2845. Looking ahead, April Retail Sales forecast at 0.6% vs. 0.4% previously. Also, Weekly Jobless Claims are forecast at 430k vs. 474k previously.

The Euro (EUR) the Euro reversal continued with new month lows back to 1.4200. General USD strength and ongoing concern about Greece the main catalyst but traders are cautious to call a new downtrend. Overall the EUR/USD traded with a low of 1.4171 and a high of 1.4425 before closing the day around 1.4205 in the New York session. Looking ahead, March Industrial Production is forecast at 0.3% vs. 0.4% previously.

The Japanese Yen (JPY) the USD/JPY actually did well breaking above Y81 even in risk aversion as the USD performed well and short's lost faith that Y80 would be broken. The outlook is mixed with crosses closely related to the performance of stocks which are also under pressure. Overall the USD/JPY traded with a low of 80.60 and a high of 81.34 before closing the day around 81.00 in the New York session.

The Sterling (GBP) gained against the Euro on the BOE inflation report which increased the short term expectation of inflation. Cable gains were reversed in the US session with the Dollar revival but the market was able to hold at opening levels. Overall the GBP/USD traded with a low of 1.6320 and a high of 1.6420 before closing the day at 1.6350 in the New York session. Looking ahead, March Industrial Output forecast at 0.8% vs. -1.2%.

The Australian Dollar (AUD) was pelted as commodities and stocks turned. Support was found eventually ahead of 1.0650 but the market will be concerned to buy too aggressively since the potential for a stampede to the exit with longs AUD is well known. Overall the AUD/USD traded with a low of 1.0662 and a high of 1.0890 before closing the day at 1.0695 in the New York session. Looking ahead, April Employment change is forecast at 18k vs. 37.8k previously. The Unemployment Rate is forecast remain at 4.9%.

Oil & Gold (XAU) Gold reversed sharply back under $1500 but found support to close just above the key level. Overall trading with a low of USD$1495 and high of USD $1527 before ending the New York session at USD$1507 an ounce. Crude Oil was once again on the move falling 5.5% back through $100 a barrel. WTI Oil Closed -$5.67 at $98.21 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4184

1.4205

1.4230

1.4442

1.4500

USD/JPY

78.83

80.00

81.20

81.69

82.28

GBP/USD

1.6246

1.6308

1.6375

1.6544

1.6661

AUD/USD

1.0443

1.0579

1.0700

1.0889

1.0953

XAU/USD

1471.00

1500

1506

1533

1551

OIL/USD

97.00

98.00

99.50

100.00

105.00

Euro - 1.4230

Initial support at 1.4205 (May 9 low) followed by 1.4184 (Apr 19 low). Initial resistance is now located at 1.4442 (May 9 high) followed by 1.4500 (Key level)

Yen - 81.20

Initial support is located at 80.00 (Big Figure support) followed by 78.83 (Mar 18 low). Initial resistance is now at 81.69 (May 2 low) followed by 82.28 (Apr 28 High).

Pound - 1.6375

Initial support at 1.6308 (Apr 20 low ) followed by 1.6246 ( low). Initial resistance is now at 1.6544 (May 5 high) followed by 1.6661 (May 3 high).

Australian Dollar - 1.0700

Initial support at 1.0579 (May 6 low) followed by the 1.0443 (Apr 19 low). Initial resistance is now at 1.0889 (May 11 high) followed by 1.0953 (May 3 high).

Gold - 1506

Initial support at 1500 (Big Figure support) followed by 1471 (May 6 low). Initial resistance is now at 1533 (May 22 high) followed by 1551 (May 3 high).

Oil - 99.50

Initial support at 98.00 (Intraday Support) followed by 97.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 105.00 (Intraday Resistance).

Written by Anthony Darvall

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