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    Market Update – 03-05-2016

    Currencies

     

    EUR/USD – breached the 1.15 level for the first time since August 2015 and continued to move higher. We are currently trading close to the trend line which has proven over time to be important.

    EURUSD

     

    USD/JPY – appears to have only one direction and that is down, although we are nearing the first support level mentioned yesterday around the 105.3 level. As mentioned yesterday, the more the JPY strengthens, the more likely an intervention by the BOJ is. This comes as a stronger JPY could jeopardize the economic recovery, something that BOJ Governor Kuroda also mentioned. He also said that the BOJ would expand monetary measures in case its inflation target would not be met.

    usdjpy

     

    GBP/USD – is trading practically unchanged from where we were at the beginning of the year. This after seeing a serious drop in the first two month, due to bad data and mainly the fears of a Brexit. With a lot of the Brexit fears dissipating, we see the GBP recover, and quite fast. We are currently trading near the resistance around the 1.475 level.

    gbpusd

     

    AUD/USD – has moved sharply down as the RBA surprisingly cut the interest rate to an all-time low. The RBA also kept the door open for another cut later on, so this might not be the only cut we will see the RBA make this year. This comes only a week after we got some disappointing data out of Australia as well, so the RBA is trying to boost the economy with the latest interest rate cut and with it also for inflation to pick up.

     
     

    Indices

     

    DAX 30

    DAX30

     

    Dollar Index – continued with the pattern I have mentioned in the past with lower lows and lower highs, which is a clear bearish pattern. On Friday we broke below the last low, and currently have created a new low, with still a possibility for more to come.

    dollar index

     
     

    Comodities

     

    Gold – broke through the 1300 level amid continued weakness in the USD, but quickly moved back as there was some profit taking. Nevertheless, with the USD remaining weak, we are moving up again, and could well see another attempt to conquer this level.

     

    Oil

     
     

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