Markets continue to grieve; where higher yielders took a brutal hit today, after the latest development we mentioned in our previous updates regarding the Greek never-ending dilemma. The U.S. macroeconomic data just came to slightly ease the hyper tensioned markets, at least temporarily. The data showed the PPI measure of inflation inclined to 0.1% however it came below the median estimates of 0.3%. The housing sector showed as slight improvement as 0.70 million new residential buildings began construction adding 10,000 buildings to the previous numbers and above 0.68 million expectations. Most importantly, Unemployment claims unexpectedly dropped to 348k from 361k last month.
The EUR/USD off lows after the release, trading around 1.3000 after printing a low at 1.2974. The pair opened the day at 1.3066 to continue falling and breach the critical support at 1.3025 in addition to the 50-days SMA around the same level. Accordingly, unless we see a retreat above this level before the end of today's session, downside pressure could build up and continue within the upcoming sessions, where downside targets could extend to 1.2930 followed by 1.2870. Only a push above the breached support which turns into resistance now around 1.3025-1.0330 could revive the bullish possibilities towards 1.03075 while stability above 1.3075 shall signal further gains.
The AUD/USD fell as well today, however the pair tends to be more solid, less vulnerable and subject to rally after the surprising drop in unemployment rate from 5.2% to 5.1% against markets expectations of 0.1% incline. However the overall risk-off mood is pressuring higher yielders in general and tying the pair's upside potential. Some technical factors suggest that we may be heading towards a period of range trading, as the pair has breached the main ascending channel that carried price since weeks, levels to watch are 1.0780 to the upside and 1.0630 to the downside; a breach above or below these levels shall indicate the next direction for the pair. The pair is currently up few pips from opening price trading around 1.0702 after opening at 1.0694.
The USD/JPY maintain the rally, where it confirmed the breach of the triangle formation we mentioned previously, and currently heading to the main long term descending trend-line and the major post-intervention high around 79.50. Caution is advised at this critical juncture, as the continuation of the current rally won't be confirmed unless we see a clear breach of the high, and that would open the door to 81.60 and 82.30.
Gold dropped sharply today, currently down more than $17 trading around 1711.00 after starting the day at 1728.00. The metal printed a low while testing the critical support at 1705.00, which is the short term ascending trend line in addition to the support of the continuation flag pattern alongside a horizontal support level all around 1700.00-1705.00 taking down this level shall open the door to a deeper bearish move initially to 1680.00 followed by 1650.00. To the upside; 1727.00 is the first resistance followed by 1740.00, which is the resistance of the flag pattern, the penetration of 1740.00 will open the door to continuing the bullish wave initially to 1763.00 followed by 1800.00.