Daily Outlook - Stocks Falls in US on Obama Debt Plan

By @ibtimes on

U.S. Dollar Trading (USD) stocks in the US fell and this helped the USD to strengthen late in New York. Obama revealed a plan to cut the US deficit by 4trn over the next 12 years. US Retail Sales were broadly in line with expectations falling to 0.4% vs. 1.0% previously m/m. In US stocks, DJIA +7 points closing at 12271, S&P +1 points closing at 1315 and NASDAQ +16 points closing at 2761. Looking ahead, March PPI is forecast at 6.2% vs. 5.6% y/y. Weekly Jobless Claims forecast at 380k vs. 382k previously.

The Euro (EUR) tested resistance above 1.4500 but this was rejected and the market tracked US stocks lower in the New York session. February Industrial Production rose 0.4% vs. 0.7% forecast m/m. The Euro outlook will be closely tied with risk appetite given many markets near year highs and questions over whether we can continue to move higher. Overall the EUR/USD traded with a low of 1.4413 and a high of 1.4522 before closing the day around 1.4440 in the New York session.

The Japanese Yen (JPY) the USD/JPY move to day highs at the start of the US session on some EUR/JPY buying but this was reversed later as analysts downgraded US GDP forecasts and US Bond yields fell in response. USD/JPY moves are closely linked with US bonds yields which are used by traders to predict the timing of US FOMC Rate Hikes. Overall the USD/JPY traded with a low of 83.55 and a high of 84.28 before closing the day around 83.80 in the New York session.

The Sterling (GBP) was extremely contained against the USD and Yen but made gains against the Euro as the markets waited for fresh catalysts. UK March Claimant count was +0.7k vs. -10k previously. The Jobless Rate fared better dropping to 7.8% vs. 8.0% previously. Overall the GBP/USD traded with a low of 1.6225 and a high of 1.6346 before closing the day at 1.6260 in the New York session.

The Australian Dollar (AUD) bounced off trend line support to move above 1.0500 once again before easing slightly into the US Close. April Consumer Sentiment picked up +1.2% and general economic data has been quite strong out of Australia lately helping push the commodity currency higher. Overall the AUD/USD traded with a low of 1.0427 and a high of 1.0541 before closing the day at 1.0490 in the New York session.

Oil & Gold (XAU) regained composure and grinded higher for most of the day to test resistance at $1460. Overall trading with a low of USD$1450 and high of USD $1463 before ending the New York session at USD$1456 an ounce. Oil consolidated losses and bounced to $107 a barrel. WTI Oil Closed +$0.86 at $107.11 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4291

1.4377

1.4420

1.4561

1.4579

USD/JPY

82.37

83.13

83.70

85.16

85.53

GBP/USD

1.6091

1.6183

1.6260

1.6428

1.6516

AUD/USD

1.0315

1.0390

1.0460

1.0580

1.0600

XAU/USD

1430.00

1436

1455

1477

1480

OIL/USD

103.00

105.00

107.20

108.00

110.00

Euro - 1.4420

Initial support at 1.4377 (Apr 12 low) followed by 1.4291 (Apr 8 low). Initial resistance is now located at 1.4561 (1.2867 plus 1.2588-1.4282) followed by 1.4579 (Jan 13, 2010 high)

Yen - 83.70

Initial support is located at 83.13 (Apr 1 low) followed by 82.37 (Mar 30 low). Initial resistance is now at 85.16 (Apr 11 high) followed by 85.53 (Apr 6 High).

Pound - 1.6260

Initial support at 1.6183 (50% retrace of 1.5937-1.6428) followed by 1.6091 (Apr 5 low). Initial resistance is now at 1.6428 (Apr 8 high) followed by 1.6516 (Dec 7 2009 high).

Australian Dollar - 1.0460

Initial support at 1.0390 (Apr 12 low) followed by the 1.0315 (Apr 6 low). Initial resistance is now at 1.0584 (Apr 8 high) followed by 1.0600 (1.0412 plus 1.0289-1.0508).

Gold - 1455

Initial support at 1436 (61.8% retrace of 1410.19-1478.18) followed by 1430 (Apr 5 low). Initial resistance is now at 1477 (1308.25 plus 0.618 of 1157.03-1431.25) followed by 1480 (Big Figure).

Oil - 107.20

Initial support at 105.00 (Intraday Support) followed by 103.00 (Intraday Support). Initial resistance is now at 108.00 (Intraday resistance) followed by 110.00 (Intraday Resistance).

Written by Anthony Darvall

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