Key Economic Data - Coming Up Today (All Times GMT+3)
EURUSDThe EURUSD has declined from the weekly high of 1.2791 and is now trading down at 1.2680. The pair is still up from 1.2500 at the start of the week. Risk appetite rose on Wednesday helped by a dovish FOMC Meeting Minutes release, leading to sharp rises across equity markets and a USD sell off. Hopes that the Federal Reserve will maintain a near zero interest rate policy amidst slowing global growth gave all markets a boost but yesterday steep declines in Crude Oil led to big sell off in Oil company stocks and sunk global stock markets leading to a US Dollar recovery. The pair broke back below the key levels identified at 1.2700 and 1.2725, and the pair retains a downward bias as long as the price remains below 1.2700. This morning French Industrial Production came in better than expected and the Italian Industrial Production data will be released at 08:00 GMT. Today is also the second day of the G20 Meetings and the start of the IMF Meetings and any major announcements could impact financial markets. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish.
EURUSD Support areas include 1.2600 1.2500, 1.2425, 1.2300. Resistance levels above are at 1.2700, 1.2800, 1.2900,1.30 figure level, followed by 1.3165.
EURUSD 15 Min Chart
EURUSD 4 Hour Chart
Crude Oil fell heavily yesterday making an 18 month low and falling into bear market. A bear market is defined as a 20% decline from the highs of the bull market. Crude fell from $88.00 to $83.65, a decline of $4.35 and a round 5% in a day. In yesterday's report I noted that we were coming up towards this type of price break although there was still some way to go, see below:
"A break below $84 will set an 18 month low and if the market makes its way down below $74 this will be a level unseen since 2010. Last week Crude declined $7 dollars from high to low and posted a decline of $5 from open to close, ie 6% in a week. This week is already turning in to a similar picture with crude down as much as $3.00 and more than 3.5% coming towards the end of this week."
This week's US Crude Oil Inventories increased by 5.1 million barrels painting a worrying picture for Oil bulls. The large build in reserves keeps the pressure on the price of Crude Oil. This market remains volatile and could shift in either direction. The political conflicts and wars taking place in key regions could re-ignite a move higher, whilst slowing global growth could derail the price further.
Support levels for the Crude Oilcan be seen at $83.50, $83.00, $82.00, $80.00. Resistance to the upside at $85, $86.50 $88, $89, $90, $92.
Chart Crude Oil Weekly Chart