LiteForex Analytics

[MikhailLF]

Brent Crude Oil: pending OPEC+ decision

Current trend

Brent crude oil prices continue to be in an uptrend, trading at 57.80.

Oil quotes are slightly adjusted after active growth the day before, the main reason for which was the OPEC+ report on the results of compliance with the agreement in January 2021.

Before today's meeting, at which the duration of the plan to curb world oil production will be discussed, the monitoring committee reported on the results of the implementation of the agreement in January. According to the report, the participating countries fulfilled the terms of the deal by 99%, and the total volume of the reduction fell from 7.7 million barrels per day to 7.2 million barrels. The current agreements are expected to remain in place in February, with a total cut of 7.125 million barrels per day, and given that Saudi Arabia and several other members of the deal agreed to a larger cut, this figure could be just over 7 million barrels.

Support and resistance

On the local chart, the asset left the correction channel and consolidated above the resistance line with high prospects for continued growth. Technical indicators are in a global buy signal state. The range of EMA fluctuations on the Alligator indicator continues to expand, and the histogram of the AO oscillator is trading in the positive zone.

Resistance levels: 58.20, 59.30.
Support levels: 57.40, 56.30.

[MikhailLF]

AUD/USD: wave analysis

The pair is in a correction and may grow.

On the daily chart, the first wave of the higher level (1) of C develops, within which the third wave 3 of (1) formed. Now, a local correction is developing as the fourth wave 4 of (1), within which the wave c of 4 forms. If the assumption is correct, after the end of the correction, the pair will grow to the levels of 0.7900–0.8100. In this scenario, critical stop loss level is 0.7503.

[MikhailLF]

XAU/USD: wave analysis

The correction ends, the pair may grow.

On the daily chart, the third wave of the higher level (3) formed, a downward correction developed as the wave (4), and the wave (5) forms. Now, the first entry wave of the lower level 1 of (5) has formed, and a local correction is ending to develop as the wave 2 of (5), within which the wave c of 2 has formed. If the assumption is correct, the pair will grow to the levels of 1959.38–2075.45. In this scenario, critical stop loss level is 1763.20.

[MikhailLF]

EUR/USD: wave analysis

The pair may fall.

On the daily chart, the first wave of the higher level 1 of (3) developed, and a downward correction forms as the second wave 2 of (3). Now, the wave a of 2 is developing, within which the third wave of the lower level (iii) of a has formed, and a local correction is developing as the wave (iv) of a. If the assumption is correct, after the end of the correction, the pair will fall to the levels of 1.1880–1.1684. In this scenario, critical stop loss level is 1.2191.

[MikhailLF]

XAG/USD: wave analysis

The pair may grow.

On the daily chart, the first wave of the higher level 1 of (3) formed, and a downward correction developed as the wave 2 of (3). Now, the third wave 3 of (3) is forming, within which a local correction has developed as the wave ii of 3, and the wave iii of 3 is forming. If the assumption is correct, the price will grow to the levels of 33.00–35.00. In this scenario, critical stop loss level is 25.82.

[MikhailLF]

EUR/USD: local trend reversal

Current trend

The EUR/USD pair is correcting upward, trading around the level of 1.2125. EUR is trading neutral against other major competitors but is significantly strengthening against USD.

The main topic of discussion in Europe remains the consequences of the COVID-19 pandemic. Yesterday, the Austrian authorities said that a large outbreak of the South African strain of the virus was recorded in the Tyrol region. 400 cases of the suspected virus have been reported, of which 293 have been confirmed. Due to a sharp increase in the number of new cases, the Greek authorities have decided to close schools and non-grocery stores for at least 2 weeks. The number of new cases in the country in the past day alone amounted to 1526.

USD Index continues to decline, trading at 90.300. Yesterday, the US Senate decided that the impeachment procedure of former President Donald Trump is not contrary to the constitution. 56 senators voted for this, and 44 against. However, to recognize the impeachment itself, at least 67 votes of members of the Senate are required.

Support and resistance

Locally, the price has broken the resistance line of the local downtrend and consolidated above it. Technical indicators gave a buy signal. Fast EMAs on the Alligator indicator crossed the signal one upwards, and the AO oscillator histogram moved into the positive zone.

Resistance levels: 1.2173, 1.2340.
Support levels: 1.2062, 1.1958.

[MikhailLF]

EUR/USD: consolidation at local highs

Current trend

EUR shows the flat dynamics of trading against USD during today's morning session, consolidating after another renewal of local highs the day before. The reason for the emergence of multidirectional dynamics was the correctional sentiment for USD, which received support after the disclosure of some details of the previously announced plan to stimulate the US economy in the amount of USD 1.9 trillion. At the same time, published macroeconomic statistics from the USA often exert moderate pressure on USD positions, as, for example, in the case of data on consumer inflation, which appeared on Wednesday.

In turn, the macroeconomic statistics from Europe, published on Wednesday, turned out to be neutral. The Consumer Price Index in Germany in January rose by 0.8% MoM and 1% YoY, which coincided with market expectations and data for the previous period.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly changing, being spacious enough for the current activity level in the market. MACD indicator is growing preserving a stable buy signal (located above the signal line). The indicator is about to test the zero line for a breakout. Stochastic retains upward direction but is located near its highs, which indicates the risks of overbought EUR in the ultra-short term.

Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 1.2150, 1.2200, 1.2234, 1.2271.
Support levels: 1.2087, 1.2052, 1.2000, 1.1951.

[MikhailLF]

Brent Crude Oil: wave analysis

The price may rise.

On the daily chart, the development of a downward correction of the higher level as wave B was completed and the formation of the ascending wave C began, as part of which the first wave 1 of (1) of C is developing. At the moment, the third wave of the lower level iii of 1 is forming, within which wave (iii) of iii is developing. If the assumption is correct, one may expect the growth of the price of the asset to 65.00–70.00. The level of 57.20 is critical and stop-loss for this scenario.

[MikhailLF]

XAG/USD: wave analysis

The pair may grow.

On the daily chart, the first wave of the higher level 1 of (3) formed, and a downward correction developed as the wave 2 of (3). Now, the third wave 3 of (3) is forming, within which a local correction has developed as the wave ii of 3, and the wave of the lower level (i) of iii of 3 is forming. If the assumption is correct, the price will grow to the levels of 33.00–35.00. In this scenario, critical stop loss level is 25.82.

[MikhailLF]

 Brent Crude Oil: trading near record highs

Current trend

Today, during the Asian session, oil prices change slightly, holding near record highs at $64 per barrel.

The instrument is supported by an improvement in the global epidemiological situation amid the rapid spread of vaccines. Markets are hoping that there will be no new restrictions this year, although it is clear that it will not be possible to complete vaccination campaigns completely. Additional support for the quotes is provided by the restrictive OPEC+ policy. Despite the gradual recovery of the energy market, many countries are in no hurry to return to the previous production volumes, which positively affects the supply.

Friday’s US Baker Hughes' report on active oil platforms reflected another rise in the number of rigs from 299 to 306 units, indicating a gradual recovery in the US oil sector.

Support and resistance

Bollinger bands are growing steadily on the daily chart. The price range is narrowing from the bottom, reflecting the ambiguous nature of recent trading. The MACD indicator is growing, maintaining a relatively strong buy signal (the histogram is above the signal line). Stochastic reversed upwards; however, it is near its highs. The indicator readings indicate that the instrument is strongly overbought in the nearest time intervals.

Development of a corrective decline is possible in the short and/or super-short term.

Resistance levels: 64.00, 65.00, 66.00.
Support levels: 63.00, 62.00, 61.00, 60.00.

[MikhailLF]

EUR/USD: US yield rising supports the dollar

Current trend

Yesterday, with the opening of trading on the New York Stock Exchange, the EUR/USD pair sharply changed its direction of moving. US Treasury yields renewed annual highs, reaching the level of 1.292% on 10-year notes and 2.095% on 30-year notes. Meanwhile, the stock market corrected downward from local highs, closing below the opening level.

The EU Q4 2020 GDP decreased by 0.6% and by 5.0% YoY. Employment is recovering but slowly, rising only by 0.3% QoQ. The February index of economic sentiment from the ZEW rose to 69.6 points from the previous reading of 58.3.

In general, the greenback is expected to strengthen further before the adoption of the US $1.9 trillion financial stimulus bill. The correction of the euro towards a long-term uptrend is likely to continue but investors should pay attention to the ECB monetary policy statement at 10:00 (GMT+2) today.

Support and resistance

Initially, the instrument was in a strong resistance area of 1.2175–1.2160 but after the release of news on the EU and the US, the rate dropped to 1.2110.

The RSI indicator is in the neutral zone. The instrument is moving within a medium-term downtrend, the key resistance of which is the margin zone 1.2128–1.2112. While this area is held, it is worth opening short positions with a target in the area of the February low.

Resistance levels: 1.2175, 1.2320.
Support levels: 1.1975, 1.1925.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows flat dynamics of trading against USD during today's Asian session, consolidating after an active decline the day before, as a result of which the instrument has updated local lows since February 8. USD was supported yesterday by strong macroeconomic data from the US on the dynamics of retail sales. In January, sales volumes increased by 5.3% MoM after a decline of 1% MoM in the previous month. Analysts had expected "bullish" trend to appear, but counted only on +1.1% MoM. Excluding car sales, the indicator in January increased by 5.9% MoM, which is also significantly better than the market forecasts of +1% MoM. Industrial production data for the same period was not so optimistic. In January, production slowed down from +1.3% MoM (revised from +1.6% MoM) to +0.9% MoM. However, the real dynamics again turned out to be noticeably better than market expectations at +0.5% MoM.

GBP/USD

GBP is trading ambiguously against USD during today's morning session. The day before, the instrument retreated from its record highs, responding to the strengthening of USD in response to the publication of strong macroeconomic statistics on retail sales in the US. In turn, the British statistics were not so optimistic. The Consumer Price Index in the UK in January fell by 0.2% MoM after growing by 0.3% MoM in December. Analysts, however, had expected a twice as strong fall. On an annualized basis, the index accelerated from +0.6% YoY to +0.7% YoY, beating the forecasts of +0.5% YoY. The Retail Price Index for the same period fell by 0.3% MoM after rising 0.6% MoM at the end of last year. Analysts had expected decline by 0.4% MoM.

AUD/USD

AUD is relatively stable against USD in Asia today. The instrument is consolidating near 0.7750, recovering slightly after the decline at the beginning of the week. The focus is on macroeconomic statistics on the labor market from Australia. The Unemployment Rate in Australia in January fell from 6.6% to 6.4% against the forecast of 6.5%. At the same time, the Employment Change increased by only 29.1K after an increase of 50K in December. Analysts expected growth of 40K. Curiously, the growth in employment as a whole is due to an increase in the level of Fulltime Employment, while Part-Time Employment in January fell by 29.8K jobs. The Participation Rate in January fell slightly from 66.2% to 66.1%.

USD/JPY

USD is showing a slight increase against JPY in trading this morning session, trying to win back some of the losses suffered the day before. USD is still supported by the positive macroeconomic data from the US on the dynamics of retail sales, released on Wednesday, and many analysts associate the appearance of negative dynamics only with technical factors. Today, investors are focused on the statistics on the dynamics of jobless claims in the US. The indicator is expected to continue its moderate decline, reflecting the gradual recovery in the US labor market after the pandemic. It is also worth paying attention to the publication of data on the dynamics of building permits in January and the Philadelphia Fed Manufacturing Survey for February. Interesting statistics from Japan will appear only on Friday with the release of the inflation cut in January-February and Jibun Bank Manufacturing PMI for February.

XAU/USD

Gold prices are showing quite active growth during today's morning trading session, offsetting the no less active decline the day before, which led to the renewal of local lows since November 30. The uptrend was triggered by technical factors, while USD gained additional support in the form of strong US retail sales data for January. In turn, investors are still expecting the development of the situation with the stimulus package for the US economy at USD 1.9 trillion. It is predicted that the approval of such an expensive program, taking into account the current situation in the US domestic market, will lead to a noticeable increase in inflationary pressures. In the meantime, traders are more interested in the yield of US Treasury securities, which are breaking new local records.

[MikhailLF]

EUR/USD: ambiguous trading

Current trend

EUR is showing ambiguous trading during today's Asian session, consolidating near 1.2100 after the instrument retraced the day before. The reason for yesterday's resumption of "bullish" trend was the disappointing data from the US. Initial Jobless Claims for the week ending February 12 again showed an increase from 848K to 861K, while analysts expected their reduction to 765K. Continuing Jobless Claims for the week ending February 5 fell from 4.558M to 4.494M, which fell short of the most optimistic forecasts of 4.413M. Thus, investors are again convinced that it is still somewhat premature to talk about the beginning of a confident recovery of the American economy. As Jerome Powell said, it will take years for the labor market to return to its previous levels.

The focus of European investors today is statistics on business activity in the manufacturing and services sectors in Germany and the eurozone for February.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD has reversed towards growth without forming a buy signal (located below the signal line). Stochastic shows similar dynamics, reversing upwards near the level of "20". Current readings of the indicator signal in favor of a corrective growth in the ultra-short term.

Resistance levels: 1.2100, 1.2150, 1.2200.
Support levels: 1.2052, 1.2022, 1.2000, 1.1951.

[MikhailLF]

BTC/USD: growth prospects remain

Current trend

Last week, the pair has continued growing. The price reached new all-time highs, rising above 58000.00 and adding about 17.4%.

The growth in quotes was due to the growing popularity of BTC among large institutional players. Tesla Inc. investment into Bitcoin encouraged other large global companies to enter the digital assets market. German SynBiotic SE has officially announced the transfer of part of its liquidity to BTC, as it fears a serious devaluation of world fiat currencies.

The price increase is supported by the launch in Canada of the first Bitcoin ETF in North America. Its shares began trading on the Toronto Stock Exchange on February 18. According to Bloomberg, in the first two days, the fund managed to attract investments in the amount of USD 421M, which is several times higher than the capitalization of the average Canadian ETF. Bitcoin ETF trading may be allowed in the US in the near term, providing new support for the entire cryptocurrency sector.

Support and resistance

The price maintains an uptrend, which is confirmed by upward reversal of the Bollinger Bands and an increase in the MACD histogram in the positive zone. Now the price is trying to consolidate above 56250.00 (Murrey [+1/8]). If successful, the growth of quotations will continue to 62500.00 (Murrey [+2/8]) and 65600.00 (Murrey [+5/8], H4). A downward reversal of Stochastic in the overbought zone does not exclude a price rollback to 50000.00 (Murrey [8/8]), but is unlikely to lead to the uptrend reversal.

Resistance levels: 56250.00, 62500.00, 65600.00.
Support levels: 53900.00, 50000.00, 43750.00.

 

[MikhailLF]

WTI Crude Oil: oil prices are consolidating

Current trend

Yesterday oil prices hit record highs since January 2020. Today during the Asian session, the price moves flat, trading near $61 per barrel. It is supported by the optimistic market’s mood, expecting a further easing of quarantine restrictions and the restoration of oil demand to previous levels. However, the speech of the head of the US Fed Jerome Powell in Congress alarmed investors, as he noted that it would take "some time" for the economy to recover.

Yesterday’s API report on oil reserves also contributed to the development of corrective dynamics. For the week of February 19, stocks in the country rose by 1.026 million barrels after falling by 5.8 million barrels in the previous period. On Wednesday, traders are focused on the second Powell’s speech and the publication of a report on oil reserves from the US Department of Energy.

Support and resistance

Bollinger bands grow steadily on the daily chart. The price range narrows from above, reflecting the ambiguous nature of trading at the beginning of the week. MACD falls, maintaining a poor sell signal (the histogram is below the signal line). Stochastic reversed upwards after the flat dynamics and indicates the remaining “bullish” potential after the active growth at the beginning of the week.

To open new trading positions, it is better to wait until the signals from technical indicators are clarified.

Resistance levels: 62.18, 63.00, 64.00, 64.71.
Support levels: 60.50, 58.51, 57.25, 55.00.

[MikhailLF]

 USD/CAD: wave analysis

The pair may fall.

On the daily chart, the downward wave of the higher level (C) of 4 develops, within which the fifth wave 5 of (C) forms. Now, the third wave of the lower level iii of 5 has formed, a local correction has formed as the wave iv of 5, and the wave v of 5 is developing. If the assumption is correct, the pair will fall to the levels of 1.2450–1.2300. In this scenario, critical stop loss level is 1.2750.

 

[MikhailLF]

XAU/USD: wave analysis

The pair is in a correction, a fall is possible.

On the daily chart, the third wave of the higher level (3) formed, and a downward correction develops as the fourth wave (4). Now, the wave C of (4) is forming, within which the wave iii of C is developing. If the assumption is correct, the pair will fall to the levels of 1728.61–1622.21. In this scenario, critical stop loss level is 1876.65.

[MikhailLF]

GBP/USD: recovery after correction

Current trend

GBP is correcting against USD in the trading session this morning, recovering from a confident decline at the end of the previous trading week. The weakening of GBP was facilitated by a large-scale correction in the bond market, which provoked a decrease in demand for risky assets. GBP was also under pressure from the comments of the Bank of England officials. Last Friday, the chief economist of the regulator, Andy Haldane, made a speech in which he pointed to the risks of inflation, noting that it will be extremely difficult to contain it as the global economy recovers from the effects of the pandemic.

Meanwhile, investors continue to praise the effectiveness of the UK coronavirus vaccination campaign, expecting the latest travel restrictions to be fully lifted by summer or fall 2021. Today, traders are awaiting the release of February UK Manufacturing PMI from Markit. Also, data on the dynamics of consumer credit in January will be released.

Support and resistance

On the D1 chart, Bollinger Bands demonstrate a tendency to reverse into a horizontal plane. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic demonstrates similar dynamics but its line is rapidly approaching its lows, pointing at risks of oversold GBP in the ultra-short term.

Resistance levels: 1.4000, 1.4050, 1.4100, 1.4150.
Support levels: 1.3950, 1.3900, 1.3861, 1.3800.

 

[MikhailLF]

USD/CAD: recovery after a minor correction

Current trend

Today during the Asian session, the USD/CAD pair grows moderately, recovering from Monday's decline, which did not allow it to renew local highs.

Yesterday’s USD weakening was largely technical since the fundamental picture did not change significantly. Some pressure on the price was exerted by the decline in the yield of American bonds, however, positive US macroeconomic statistics helped to smooth out this negative effect. Thus, ISM Manufacturing PMI for February rose from 58.7 to 60.8 points, while the forecasts assumed growth only to 58.8 points. Markit Manufacturing PMI rose from 58.5 to 58.6 points, in line with market expectations.

On Tuesday, investors are focused on a block of statistics on the dynamics of Canada's GDP for December and the fourth quarter of 2020. According to preliminary data, the country's economy slowed significantly at the end of last year, which is associated with continuing restrictions due to the coronavirus pandemic.

Support and resistance

On the daily chart, Bollinger Bands reverse horizontally. The price range tries to consolidate but remains spacious enough for the current level of activity in the market. MACD grows, maintaining a strong buy signal (the histogram is above the signal line). Stochastic grows but rapidly approaches its highs, signaling that the instrument may become overbought in the ultra-short term.

It is better to keep the current long positions until the signals from technical indicators are clarified.

Resistance levels: 1.2700, 1.2746, 1.2800, 1.2850.
Support levels: 1.2637, 1.2570, 1.2540, 1.2500.

[MikhailLF]

WTI Crude Oil: prices remain under pressure

Current trend

Today, during the Asian session, oil prices are slightly increasing, correcting after a three-day decline, which led to the consolidation of the instrument below the psychological level of $60 per barrel.

Investors expect the emergence of new drivers on the market, which may be the results of tomorrow's OPEC+ meeting. Analysts expect that the cartel may decide to ease restrictions on oil supplies, which could put additional pressure on quotes.

The American Petroleum Institute's report on energy reserves released yesterday had a negative impact on the instrument. For the week of February 26, the figure rose sharply by 7.356 million barrels after increasing by 1.026 million in the previous period. On Wednesday, traders await the publication of the final report from the US Department of Energy. Forecasts assume a decrease in inventories for the week of February 26 by 1.85 million barrels after rising by 1.285 barrels in the previous period.

Support and resistance

On the daily chart, Bollinger Bands reverse into a horizontal plane. The price range is narrowing slightly, reflecting the emergence of multidirectional dynamics in the past few weeks. The MACD indicator is going down, maintaining a strong sell signal (the histogram is below the signal line). Stochastic is also directed downwards but it is near its lows, which indicates that the instrument may become oversold in the ultra-short term.

Resistance levels: 60.50, 62.18, 63.00, 64.00.
Support levels: 58.51, 57.25, 55.00, 53.00.

 

[MikhailLF]

USD/CAD: US macro statistics restrain the “bullish” activity

Current trend

Today during the Asian session, the USD/CAD pair trades ambiguously, consolidating near the level of 1.2650.

The US dollar retains its upward momentum, formed yesterday. However, the American macroeconomic statistics slightly restrain the “bullish” activity on the instrument. In particular, investors reacted negatively to the release of the ADP Nonfarm Payrolls for February and are eagerly awaiting the publication of the final data on the US labor market at the end of the week.

The data from Canada were slightly better but did not significantly affect the instrument. Building permits for January rose sharply by 8.2% MoM after declining by 4.4% MoM for the previous period.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range is trying to consolidate but remains wide enough for the current level of market activity. The MACD indicator is growing, maintaining a poor buy signal (the histogram is above the signal line). Stochastic, having not reached the border of the overbought area, reversed into a downward plane, responding to strong "bearish" pressure at the beginning of the week.

To open new trading positions, it is better to wait for the signals from technical indicators to be clarified.

Resistance levels: 1.2650, 1.2700, 1.2746, 1.2800.
Support levels: 1.2600, 1.2570, 1.2540, 1.2500.

[MikhailLF]

EUR/USD: strong USD hinders the growth of the pair

Current trend

The day before, the EUR/USD pair fell by 93 points, which was catalyzed by the speech of the US Fed Chair Jerome Powell.

Investors began to get rid of US stocks and bonds after the head of the regulator disappointed the markets, refraining from decisive action against the growth of Treasury bond yields, considering the fears of the traders far-fetched. He made it clear that at the moment no steps are being prepared to contain the rise in interest rates. The rhetoric of the Fed also contributed to the fall in quotes of the indices: the S&P 500 closed at its lowest level in five weeks, losing 1.3%, while rates on 10-year bonds exceeded 1.5%. Further downtrend in stock indices is likely to lead to the movement of investor capital to more reliable assets such as USD and gold.

The European Central Bank also does not see the need for decisive action to combat the rise in bond yields, believing that the risk to the economy can be managed through verbal intervention and the flexibility of quantitative easing programs. In turn, high yields on government bonds pose a problem for the eurozone as they are used by banks as a benchmark for lending. According to the ECB representatives, at the moment there is no need to expand the emergency bond purchase program, which is EUR 1.85 trillion. If at the next meeting the regulator voices its concerns about the high rate of EUR, this may negatively affect the quotes in the near future.

Support and resistance

After holding resistance at 1.2175 last month, EUR rate dropped to the support area of 1.1975–1.1925, in case of a breakdown of which, the instrument will continue to fall with the target at 1.1740.

This week, the medium-term trend changed to a downtrend (the target zone 1.2082–1.2066 was broken down). The next target is at support at 1.1922–1.1906. The border of the new trend is shifting to the levels of 1.2127–1.2111.

Resistance levels: 1.2066, 1.2127.
Support levels: 1.1906, 1.1780.

[MikhailLF]

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is growing as part of the correction, recovering after a confident "bearish" rally, which led to the renewal of local minimums of November 24, 2020. The current growth of EUR is caused only by technical factors, while the fundamental picture on the market changes insignificantly. Monday’s macroeconomic data from Germany put additional pressure on the instrument. Industrial production fell by 2.5% MoM for January after rising by 1.9% MoM for the previous month. Analysts had expected the index to rise by 0.2% MoM. Also, it declined by 3.9% YoY after rising by 1.0% YoY for the previous period. The markets were slightly supported only by the indicator of investor confidence for March from Sentix, which rose from –0.2 to 5 points against the forecast of +1.9 points. On Tuesday, European investors are focusing on the renewed data on the dynamics of GDP in the euro area for the fourth quarter of 2020.

GBP/USD

Today during the Asian session, the GBP/USD pair is growing slightly, developing the “bullish” signal formed yesterday. Now the activity of buyers in the market has not changed the balance of power for the instrument, even in the short term but new drivers are expected soon. USD is in demand after the publication of a strong report on the US labor market, as well as in anticipation of the approval of a program to support the national economy of $1.9 trillion. The bill passed a vote in the Senate, having undergone several amendments. Now it will be returned to the House of Representatives, after which he will go for approval of US President Joe Biden, who hopes to complete the process this week. In turn, on Tuesday, GBP was supported by statistics on the dynamics of retail sales from the Confederation of British Industrialists. In February, the indicator accelerated from +7.1% YoY to +9.5% YoY, beating the forecasts of +7.0% YoY.

NZD/USD

Today, during the Asian session, the NZD/USD pair is declining, developing a “bearish” trend in the short term and trading near local lows since mid-January 2021. The demand for commodity assets remains moderate, especially against the backdrop of positive macroeconomic signals from the US economy and the readiness of congressmen to approve a new package of large-scale support measures. The New Zealand dollar reacted positively to the data block from China on the dynamics of imports and exports, which indicates a further recovery in trade activity around the world. However, last week, the PRC set a GDP growth target at +6%, which was worse than market expectations of +8%. Macroeconomic statistics from New Zealand put additional pressure on the instrument on Tuesday. There, the volume of sales in the industrial sector for the fourth quarter of 2020 slowed down from +17.3% QoQ to +0.5% QoQ. The index of business optimism from the RBNZ for March fell sharply from 7 to 0 points.

USD/JPY

Today during the Asian session, the USD/JPY pair is steadily growing, developing a powerful “bullish” rally since February 23 and renewing record highs since June 2020. USD is in strong demand against the backdrop of positive macroeconomic publications from the United States, as well as anticipating a new impetus for the recovery of the American economy after the approval of the stimulus bill of $1.9 trillion. JPY, in turn, is retreating after the release of statistics from Japan. Thus, the revised data reflected a slowdown in GDP for the fourth quarter of 2020 from +3% QoQ to +2.8% QoQ. In annual terms, the growth rate of the Japanese economy was revised from +12.7% YoY to +11.7% YoY.

XAU/USD

Today, during the Asian session, gold prices are rising within a correction, recovering from another decline yesterday, which led to the renewal of record lows since June 2020. The reason for the next sales at the beginning of the week was the strong position of the US currency and the yield on American securities, which remains quite high and attractive. Gold is supported only by expectations of the final approval of a new package of measures to support the US economy of $1.9 trillion, which is expected to lead to a jump in inflationary pressures within the country

Resistance levels: 1.2066, 1.2127.
Support levels: 1.1906, 1.1780.

[MikhailLF]

Brent Crude Oil: oil prices decline

Current trend

Today during the Asian session, oil prices slightly decline, developing the corrective momentum that was formed earlier when the instrument was trading at record highs since January 2020.

Earlier this week, the instrument was supported by attacks by Yemeni Houthi forces on oil production facilities in Saudi Arabia. Also, investors expect a fairly restrained OPEC+ policy, which does not provide for a sharp increase in supply volumes.

In turn, the growing dollar, which received a positive impulse after the decline in the yield of American bonds, exerts pressure on the quotes. An additional negative signal was another API report on US energy reserves. For the week of March 5, the figure again rose sharply by 12.792 million barrels after increasing by 7.356 million barrels in the previous period. On Wednesday, the focus of investors' attention is the report on the oil reserves from the US Department of Energy.

Support and resistance

Bollinger bands grow steadily on the daily chart. The price range narrows from the bottom, reflecting the ambiguous nature of trading in the short term. MACD falls, maintaining a fairly strong sell signal (the histogram is below the signal line). Stochastic falls, reversed at the level of 80, which reflects that the instrument is overbought in the ultra-short term.

It is better to keep the current short positions and open new ones in the short and/or super short term.

Resistance levels: 68.00, 68.63, 70.00, 71.80.
Support levels: 67.00, 66.00, 65.00, 64.00.

[MikhailLF]

WTI Crude Oil: US Department of Energy predicts a decline in prices

Current trend

Oil quotes are declining within the correction, trading at 64.90.

Yesterday, the US Department of Energy released a renewed forecast for energy prices for the near term. According to the report, this year, the average oil price will be $60.67 per barrel, and in 2022 it will decrease to an average value of $58.51 per barrel. The forecast deals with Brent Crude Oil, therefore, WTI Crude Oil will cost 2–3 dollars cheaper, which is significantly lower than the current level.

Another factor putting pressure on the instrument is the reports of the American Petroleum Institute (API) and the Energy Information Administration (EIA). For the second week in a row, they report a significant increase in oil stocks. According to the API, the figure rose by 12.792M barrels, and according to the EIA, the increase was 13.798M. The US oil industry continues to experience an oversupply after the freeze, which temporarily paralyzed refining.

Support and resistance

Locally, the price moves within the Expanding formation pattern, forming another wave of decline. Technical indicators are in a state of uncertainty. Alligator indicator’s EMA fluctuations range narrowed, and the histogram of the AO oscillator reached the transition level.

Resistance levels: 65.70, 68.00.
Support levels: 63.40, 59.50.