FOREX: EUR Trades the Range Headed into ECB
- The single currency is rangebound ahead of the ECB meeting, with EUR/USD holding the late rally Wednesday to consolidate above 1.1400. For EUR/GBP, the price remains inside the broad downtrend drawn off the mid-April highs, however S/T momentum has stalled slightly, with the price gravitating toward the 100-dma.
- The JPY is softer against all others in G10 as the USD/JPY rate mean reverts. EUR/JPY continues to trade just above the 50-dma of 162.63, a key level of support that should remain in focus into the ECB decision. Meanwhile, the trend structure in GBPUSD is unchanged, it remains bullish and the pair continues to trade closer to its recent highs. Initial support to watch lies at 1.3431, the 20-day EMA.
- The carry profile across G10 remains a key driver as low levels of vol pervade across spot markets. This continues to favour the relative high yielders in G10 FX, namely AUD and NZD which are higher intraday, and aiding AUD/USD toward recent cycle highs at 0.6537.
- The ECB rate decision takes focus going forward, and anything other than a 25bps rate cut to all three major rates would be a surprise for markets. Focus for the press conference will be on the unanimity (or lack thereof) of the governing council toward their decision on rates, particularly as the benchmark deposit heads toward the midpoint of the bank's assessment of 'neutral'.
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EQUITIES: Large Longer Dated Commerzbank Option trade
CBKE (18/12/26) 18c, bought for 8.15 in 35k.
COMMODITIES: Short-Term Gains for WTI Futures Considered Technically Corrective
A medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a Fibonacci projection. Resistance to watch is $64.32, the 50-day EMA. Gold has recovered from its recent lows and this suggests the correction between Apr 22 - May 1, is over. A continuation higher would refocus attention on key resistance and the bull trigger at $3500.1, the Apr 22 high. Clearance of this level would confirm a resumption of the primary uptrend. Key short-term support has been defined at $3202.0, the May 1 low. A break of this level is required to signal scope for a deeper retracement.
- WTI Crude up $1.46 or +2.56% at $58.49
- Natural Gas up $0.08 or +2.37% at $3.632
- Gold spot up $43.23 or +1.3% at $3377.06
- Copper down $1.15 or -0.24% at $468.85
- Silver up $0.56 or +1.73% at $33.0628
- Platinum up $14.78 or +1.53% at $979.36
EQUITIES: Eurostoxx 50 Futures Holding Onto Latest Gains
Eurostoxx 50 futures maintain a positive tone and the contract is holding on to its latest gains. Price has recently cleared both the 20- and 50-day EMAs, and attention is on 5263.01, 76.4% of the Mar 3 - Apr 7 bear leg. It has been pierced, a clear break of it would pave the way for a climb towards 5341.00, the Mar 27 high. Initial support to watch lies at 5067.15, the 20-day EMA. Clearance of this level would signal a possible reversal. The latest recovery in the e-mini S&P reinforces current bullish conditions.The contract has breached the 50-day EMA, at 5622.87. A continuation of the bull phase would expose 5837.25 next, the Mar 25 high and a bull trigger. It is still possible that the entire rally since Apr 7 is a correction. A reversal lower would signal the end of this corrective phase and expose initially, support at 5127.25, the Apr 21 low.
- In China the SHANGHAI closed higher by 37.083 pts or +1.13% at 3316.114 and the HANG SENG ended 158.03 pts higher or +0.7% at 22662.71.
- Across Europe, Germany's DAX trades lower by 260.12 pts or -1.11% at 23085.01, FTSE 100 higher by 3.66 pts or +0.04% at 8600.28, CAC 40 down 40.58 pts or -0.53% at 7687.35 and Euro Stoxx 50 down 34.91 pts or -0.66% at 5248.14.
- Dow Jones mini down 224 pts or -0.54% at 41093, S&P 500 mini down 37.25 pts or -0.66% at 5634.5, NASDAQ mini down 181.5 pts or -0.91% at 19874.
