Monthly Archive: February 2016

Oil advances and ends the month higher

Crude oil prices advanced on Monday, supported by news that Saudi Arabia pledged to work with other crude producers to limit market volatility.

Brent futures were trading at $35.98 per barrel by London’s close, up 88 cents, or 2.5%. WTI futures nearer $34.00 a barrel during the American afternoon, and trades a handful of cents below it by the end of the day, maintaining a generally positive tone.

WTI futures settled 3% up at $33.80 on Monday and posted a 1% gain in February.

WTI technical view

“The daily chart shows that the price remains well above its 20 SMA, while the RSI indicator resumed its advance and heads north around 56. In the same chart, the Momentum indicator has lost upward steam and turned lower, but remains near overbought territory, far from anticipating an upcoming decline,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical tone is clearly bullish, given that the price bounced sharply from around a bullish 20 SMA, while the technical indicators head north well into positive territory. Last week high at 34.65 is the level to take to confirm a more sustainable recovery beyond the 35.00 mark during the upcoming sessions.”

Support levels: 33.10 32.55 31.90. Resistance levels: 34.65 35.20 36.00.

Crude oil prices advanced on Monday, supported by news that Saudi Arabia pledged to work with other crude producers to limit market volatility.

(Market News Provided by FXstreet)

EUR/USD holds near 4-week lows sub-1.0900

The American dollar fell against most of its major rivals, main exception made by the euro, as investors struggled to stay positive following disappointing US data. However, weak Eurozone inflation readings kept the shared currency undermined throughout the day.

The common currency was on its back foot ever since the day started, advancing briefly towards 1.0960 at the London opening before falling to fresh lows at 1.0858. Despite broad dollar’s weakness, the pair consolidates near its daily low by the end of the day, maintaining a generally negative technical tone. At time of writing, EUR/USD is trading at 1.0886, down 0.45% on Monday.

EUR/USD technical perspective

“Short term, the 1 hour chart shows that the price remains below a bearish 20 SMA, while the indicators head south within bearish territory, indicating the risk remains towards the downside,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical picture also favors additional declines, although the technical indicators have lost bearish strength around oversold levels. Some consolidation could be expected, with strong buying interest aligned around 1.0810, and large stops below it that if triggered, could see the pair approaching 1.0700 next Tuesday.”

Support levels: 1.0850 1.0810 1.0770. Resistance levels: 1.0920 1.0960 1.1000.

The American dollar fell against most of its major rivals, main exception made by the euro, as investors struggled to stay positive following disappointing US data. However, weak Eurozone inflation readings kept the shared currency undermined throughout the day.

(Market News Provided by FXstreet)

Gold ends higher and posts monthly gain

Gold recovered its shine, with spot erasing all of its Friday’s losses and advancing up to a daily high of $1,235.87 a troy ounce. The decline in stocks favored the commodity, with strong buying interest coming from China, in the form of bargain hunting. Also, supporting the bright metal was dollar’s weakness, which traded lower against most of its major rivals.

Gold spot ended the day around $1,237 an ounce, recording a 1.19% gain on Monday and over 10% over the month.

Gold technical outlook

“From a technical point of view, the bullish stance prevails, as the price recovered strongly after testing a bullish 20 SMA early Monday, currently a strong dynamic support at 1,216.50. In the same chart, the technical indicators have erased all of their overbought readings, and the Momentum indicator turned lower around its mid-line, still unable to confirm further gains,” said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, the 4 hours chart, the technical picture is neutral, given that the price is hovering around a horizontal 20 SMA and the technical indicators head nowhere around their mid-lines”.

Support levels: 1,226.10 1,216.50 1,202.05. Resistance levels: 1,242.30 1,251.90 1,260.00.

Gold recovered its shine, with spot erasing all of its Friday’s losses and advancing up to a daily high of $1,235.87 a troy ounce. The decline in stocks favored the commodity, with strong buying interest coming from China, in the form of bargain hunting. Also, supporting the bright metal was dollar’s weakness, which traded lower against most of its major rivals.

(Market News Provided by FXstreet)

USD/JPY consolidates below 113.00

USD/JPY lost around 100 pips from its Friday’s close, as the G20 meeting that took place in Shanghai during the weekend, failed to boost market sentiment.

The Group committed to go beyond easy-money monetary policy to pursue structural reforms in their respective countries to strengthen the global economy, but as usual, no actual decision was made.

The pair’s decline stalled during the American afternoon, as local share markets turned positive, but poor US data maintained the upside limited. At time of writing, USD/JPY is trading at 112.89, 0.91% below its opening price.

USD/JPY technical perspective

“From a technical point of view, the 1 hour chart shows that the price is struggling around the 200 SMA, while the 100 SMA heads slightly higher around 112.55, providing an immediate intraday support,” said Valeria Bednarik, chief analyst at FXStreet. “In the same chart, the Momentum indicator aims higher, but remains below its 100 level, while the RSI indicator resumed its decline around 43, in line with further declines. In the 4 hours chart, the price retreated from a bearish 100 SMA, while the Momentum indicator heads south and nears its 100 level, and the RSI stand flat around 50.”

Support levels: 112.45 112.00 111.65. Resistance levels: 113.20 113.70 114.10.

The USD/JPY pair lost around 100 pips from its Friday’s close, as the G20 meeting that took place in Shanghai during the weekend, failed to boost market sentiment.

(Market News Provided by FXstreet)

GBP/CAD recovers from 8-month lows

The GBP/CAD cross was led by pound’s movements, recovering some ground as the UK currency corrected higher.

The loonie on the other hand, strengthened briefly tracking higher oil prices but then retreated. Oil prices traded flat below $30.00 a barrel, with the Canadian dollar was left practically unchanged intraday. GBP/CAD is currently trading at 1.8810, up 0.46% on the day, having posted a fresh 8-month low of 1.8721 at the weekly opening.

GBP/CAD technical view

The cross is still far from signaling a reversal in its dominant bearish trend, as in the daily chart, the technical indicators remain in oversold territory.

“The 1 hour chart shows that the price is a few pips above a horizontal 20 SMA, whilst the technical indicators have turned south, but remain above their mid-lines,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, an intraday recovery met selling interest around a bullish 20 SMA, currently at 1.8900, while the technical indicators have corrected extreme oversold readings, but lost upward steam well below their mid-lines, suggesting the latest upward move was barely corrective, and that the pair may resume its decline during the upcoming sessions”.

Support levels: 1.8780 1.8730 1.8680. Resistance levels: 1.8840 1.8900 1.8960.

The GBP/CAD cross was led by pound’s movements, recovering some ground as the UK currency corrected higher.

(Market News Provided by FXstreet)

USD/CHF back to square one

USD/CHF completed a round trip to above the parity level as the dollar weakened versus the franc following disappointing Chicago PMI and pending home sales data.

USD/CHF came under pressure and dropped all the way back to the 0.9965 zone, where it trades virtually unchanged on the day, after being rejected from a peak of 1.0037.

On the data front, Chicago PMI came in at 47.6, below the 53.0 expected while pending home sales fell 2.5% in January, below the 0.5% increase of forecast.

USD/CHF technical levels

In terms of technical levels, USD/CHF could find next resistances at 1.0037 (Feb 29 high), 1.0073 (Feb 4 high) and 1.1100 (psychological level). On the other hand, supports are seen at 0.9870 (Feb 26 low), 0.9852 (Feb 24 & 17 lows) and 0.9757 (200-day SMA).

USD/CHF completed a round trip to above the parity level as the dollar weakened versus the franc following disappointing Chicago PMI and pending home sales data.

(Market News Provided by FXstreet)

European stocks close: stocks closed mixed on higher oil prices

Stock indices closed mixed as oil prices rose. Oil prices increased on news about the supply disruption in Nigeria due to a leak.

Meanwhile, market participants eyed the economic data from the Eurozone. Eurostat released its consumer price inflation data for the Eurozone on Monday. The preliminary consumer price inflation in the Eurozone declined to -0.2% year-on-year in February from 0.3% in January, missing expectations for a flat reading.

The preliminary consumer price inflation excluding food, energy, alcohol, and tobacco fell to an annual rate of 0.7% in February from 1.0% in January. Analysts had expected the index to decrease to 0.9%.

Food, alcohol and tobacco prices were up 0.7% in February, non-energy industrial goods prices gained 0.3%, and services prices climbed 1.0%, while energy prices dropped 8.0%.

The Bank of England (BoE) released its number of mortgages approvals for the U.K. on Monday. The number of mortgages approvals in the U.K. was up to 74,581 in January from 71,335 in December, exceeding expectations for an increase to 73,600. December’s figure was revised up from 70,837.

Net lending to individuals in the U.K. increased by £5.3 billion in January, after a £4.3 billion gain in December. December’s figure was revised down from a £4.4 rise.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,097.09 +1.08 +0.02 %

DAX 9,495.4 -17.90 -0.19 %

CAC 40 4,353.55 +38.98 +0.90 %