14/03/2014: Trading outlook for the start of the US session

The trading outlook for today continues to suggest that safe haven assets remain in favour. Equity indices are lower, whilst gold and the yen are trading higher, and investors are also turning to sovereign debt as bond yields continue to fall.

The dollar has yet to recover, with the strong performance of the Japanese yen suggesting that it remains the currency of choice today. The outperformance of the Euro versus Sterling also continues to be a feature of the majors, with the Euro rallying this morning, as Sterling remains under pressure.

EUR/USD has recovered nicely today, with a move above $1.3877 the outlook is improving and should ensure a move back above $1.3900. I would look for a correction to find support in the band $1.3860/$1.3877 as a chance to buy. Although with the geopolitical events still having an impact , this position would not be without its risks.

GBP/USD has spent the morning under pressure and this looks to be the case into the US session. Overhead supply is in place between $1.6600/$1.6625 which should act as an area to possibly sell into. With intraday hourly momentum turning lower a test of the low at $1.6566 should be seen.

USD/JPY the sell-off of yesterday evening consolidated but is now gathering momentum once more to the downside. Momentum remains very weak and a retest of 101.17 key low is increasingly on the cards. I am looking for an opportunity to sell a rally into the resistance band 101.60/101.70.

Gold remains firm and the hourly intraday momentum has renewed upside potential. A retreat to the support around $1370 would look to be a decent chance to buy as the $1376.02 resistance should be tested.

The DAX remains under pressure but the extreme position that the technicals are at (RSI at 31, daily range entirely outside the Bollinger Bands) now suggests that if the geopolitical situation begins to calm down then this could be another very good chance to buy again. There is a gap still open at 9017 which still needs to be filled.

The FTSE 100 broke below the 61.8% Fibonacci retracement of the 6417/6866 rally at 6588 yesterday, which increases the likelihood of a move back to test 6417 (the DAX has already broken its equivalent low). In a similar way to the DAX though, FTSE 100 is also trading entirely outside its Bollinger Bands which makes for extreme trading conditions currently. This could induce some support ultimately, but for now the outlook remains under pressure. There is little sign of any recovery yet as we moved into the US trading. Intraday hourly momentum indicators look very weak and for now the sellers remain in control.

Leave a Reply

Your email address will not be published. Required fields are marked *