Key Economic Data - Coming Up Today(All Times GMT+3)
The EURUSD declined yesterday following primarily USD strength as well due to poor European economic data and the weakness in Gold. EU Services PMI was weaker than forecast and EUR Retail Sales contracted at a rate of -1.3% and this led the pair to fall as low as 1.2454 just above the 2year low of 1.2439. The USD had already rampaged against the YEN and Gold, which the Euro had withstood, until the poor data which sent the pair tumbling from 1.2550 to 1.2454. Following the US ADP Non-Farm Employment Change data the pair began to swing between 1.2460 and 1.2506. This morning the EURUSD rose as high as 1.2530 and is presently back to 1.2497. Coming up today are the UK and Euro interest rate decisions, as well as the ECB Press Conference, while on Friday markets will be preparing for the eagerly awaited US NFP and US Unemployment Rate. These are high impact releases that can create fluctuations and trends in the days leading up to the report as well as during and after the release.
The technical picture for the EURUSD is weak, as seen on the H1, the blue rising trendline for the pair has been broken in devastating fashion. This ends the hopes for the EURUSD targeting a move beyond 1.2890 and within range of the key 1.30 level. 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. - This has been our consistent outlook for two month now, although the picture had become more mixed as the pair had re-entered the lower end of the downtrend channel as seen in the H4 Chart. Overall the bias is sill negative for the EURUSD although there is slightly more hope for the bulls now due to the price action of the last three weeks. The pair had recently begun to re-enter into the lower end of the downtrend channel. The price has now collapsed and signaled this latest attempt to rebound in the EURUSD as a failure.
EURUSD Support areas include 1.2500, 1.2475, 1.2425, 1.2300. Resistance levels above are at 1.2600, 1.2700, 1.2845, 1.2800, 1.2900,1.30 figure level, followed by 1.3165.
EURUSD 15 Minute Chart
EURUSD 1 Hour Chart
EURUSD Pivot Point Table
Gold fought its way back from a four year low of $1137 reaching $1150 in the process. The price has now settled back to $1145 ahead of key economic events in the UK and EU today, and the US tomorrow. Gold has recovered around $10-12 of the $40 losses incurred since the beginning of the week. We have noted for several days that once Gold had fallen below the $1180 level and stayed below this level, the technical picture was weak for Gold. Gold prices have slumped from $1345 an ounce in August to just above $1100 today, declining 15% in a matter of months. Gold traders will hope that the price can begin to recover some of these heavy losses and hold firmly above $1000 an ounce. Technically Gold and Silver are both oversold with the RSI indicator reading at around 20.1, at the same time the USD is technically overbought esp versus the JPY with an RSI of 80.49 on the Daily Chart. Global investors have been more inclined to sell their Gold holdings rather than increase them as the precious metal is no longer seen as an attractive hedge or safe haven now that US interest rate markets are in the process of normalization. To take a longer term view of the gold market, if we look back since the start of the commodities bull market in 1999, Gold had risen from $245 an ounce in 1999 to $1921 in 2011 and is now down at $1147. After a 40% decline there could be increased volatility in both directions, both up and down.
Yesterday the healthy US ADP Non-Farm Employment Change data did not push Gold any lower and this may indicate some strength or resilience in Gold at these levels. Another key market event affecting the Gold trade is coming up on Friday with the US NFP and Unemployment Rate. Gold often reacts strongly during and after this report is released to markets.
Support levels for Gold can be seen at $1145, $1130, $1125, $1115, $1100. Resistance to the upside materializes at $118, $1195, $1205, $1215, $1225, $1235, $1240.
Gold 15 Minute Chart
Gold 1 Hour Chart
Gold Pivot Point Table