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COMMENTARY

• GBP/USD bearish trend could resume today
  Written by Fawad Razaqzada
  Last updated 3/26/2013 7:57:05 AM ET
  The Cable could resume its downward trajectory today if rates break yesterday’s low. Following the heavy selling from January to mid-March, the currency pair has stabilised somewhat, primarily due to short-side profit-taking. But with price pulling back to the key resistance range I have shaded in red, and creating a bearish engulfing candle, there is every chance that the bearish trend could resume now and rates head much lower from here. The first few targets on the downside could be 1.5070, followed by 1.5000 and then 1.4830. An eventual break below February’s low of 1.4830 cannot be ruled out. But as one of my like-minded friends on Twitter pointed out, shorting the pound could be risky if Cypriots move funds into the UK as the banking crisis unfolds there. Placing a stop loss above yesterday’s high could limit this risk.
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• Dijsselbloem Goes the Dynamite!
  Written by Neal Gilbert
  Last updated 3/25/2013 4:21:32 PM ET
  North American markets were in a bit of a funk today after both Asian and European markets seemed to indicate that the bailout deal struck by Cyprus this weekend to save their economy was the saving grace it was trumpeted to be. However, many of those feelings of good cheer and a job well done were replaced by fear, panic, and the drawing of a new line in the sand.
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• EUR/AUD at Fresh 2013 Lows, Room Toward 1.22 Next
  Written by Matthew Weller
  Last updated 3/25/2013 1:48:17 PM ET
  The euro is getting sold across the board as rumors of a possible downgrade of Italy circulate and comments by the head of the Eurogroup suggest that the usurious conditions on Cyprus’ bailout could be applied in other nations. As of writing, the single currency is testing its 2013 low against the U.S. Dollar, but a better way to take advantage of continued euro weakness may be through the EUR/AUD.
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• Precious metals mixed
  Written by Fawad Razaqzada
  Last updated 3/25/2013 1:29:31 PM ET
  Precious metals were initially lower this morning as investors sought out racier assets such as equities after Cyprus struck a last-minute bailout deal with the eurozone. But the relief-rally was short-lived as equities and the euro slid after Eurogroup's Dijsselbloem said Cyprus’s bank restructuring plan should be seen as a template for the rest of euro zone. This encouraged precious metals traders to reverse some of their bearish bets, causing prices to bounce sharply. By late afternoon, gold had relinquished nearly all of its earlier losses, while silver had turned higher for the day. Meanwhile speculators are slowly increasing their bullish bets in gold. Net long positions expanded for the second consecutive week according to data from the CFTC. But in a sign that gold may be decoupling from silver, investors decreased their long positions in the grey metal probably in response to traders’ attitude towards copper which saw a massive increase in net short positions. Gold faces resistance around $1625-$1630.
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• Crude off highs as Cyprus deal fails to soothe sentiment fully
  Written by Fawad Razaqzada
  Last updated 3/25/2013 11:48:13 AM ET
  Crude oil started the day and week brightly with both Brent and WTI rallying sharply. The bulls were taking full advantage of the last minute agreement to rescue Cyprus from bankruptcy that was brokered overnight. Investors were also encouraged by data from the ICE Futures Exchange which showed a net rise of 6,982 long Brent contracts during the week ending March 19. However, a sharp reversal occurred in the afternoon after Eurogroup's Dijsselbloem said Cyprus’s bank restructuring plan should be seen as a template for rest of euro zone. This so called “bail-in” approach would mark a radical departure for euro zone policy, which means taxpayers will no longer be the sole backers for failing financial institutions. Dijsselbloem’s comments sent investors scrambling to sell the euro and risk assets in general, causing the dollar to rally. As a result, crude oil came crashing down from its earlier highs. WTI was now trading around $94.50, after surpassing $95.50 earlier. A close below $94.40 would create a “fake breakout” which is a bearish reversal technical setup.
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• EUR/USD fills "Cyprus gap"
  Written by Fawad Razaqzada
  Last updated 3/25/2013 7:30:47 AM ET
  News of a bailout deal for Cyprus has led to a relief rally across all risk assets this morning. But aside from that, there is little stimulus to suggest the rally can be sustained, so may we may be in for some healthy profit-taking henceforth...
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• Precious metals lower but gold up on the week
  Written by Fawad Razaqzada
  Last updated 3/22/2013 11:50:07 AM ET
  Both gold and silver are trading lower today, weighed down by profit-taking ahead of the weekend. The metals have been creeping higher this week as uncertainty grew over Cyprus. But with the eurozone determined to stop contagion spreading, the feeling is that a deal will be reached on Cyprus before Tuesday next week when the ECB said it would suspend its provision of emergency liquidity. The metals remain range bound and until we see a clear breakout then it is anyone’s guess which direction the metals are likely to go in the near term. I think the odds favour the bulls at this stage. Time will tell.
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• Crude oil higher but Cyprus woes linger
  Written by Fawad Razaqzada
  Last updated 3/22/2013 11:06:42 AM ET
  Crude oil started the day flat, with Brent hovering around $107 and WTI $92.50. Cyprus was dominating the agenda once again after Russia refused to offer them a helping hand while the S&P cut the nation’s debt rating. But prices jumped on reports that Cyprus may have a deal “within hours,” while news that Greece has agreed to take over units of Cypriot banks also helped the cause. There was no US data scheduled to offer further direction and traders were just happy to sit on their hands ahead of the weekend. WTI is currently forming a possible Head and Shoulders pattern on the 1 hour chart, with the Right Shoulder coming in around $93.00/$93.50. The neckline is just below $92.00.The upside on Brent has been capped by a bearish trend line which is visible on the 1 hour chart.
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• DAX technical outlook
  Written by Fawad Razaqzada
  Last updated 3/22/2013 7:00:11 AM ET
  Things are not looking too bright for Cyprus at the moment, with Russia refusing to bail them out and S&P trimming their debt ratings. As the clock continues to count down for Cyprus to resolve its debt issue, investor sentiment turns more bearish. That said the DAX index has again bounced off that 7850/80 support area, technically suggesting equities remain in “buy the dips” mode despite the concerns. A close below this range would be very bearish, particularly as the MACD is clearly in the state of divergence. But the longer-term trend is intact as indicated by the trend line and the 50-day average, so it would be premature to say at this stage that the bull market has ended, even though it may feel that way. Intra-day resistance comes in around 7930/50, followed by 8000.
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• Gold & Silver Shine As Cyprus Handed ECB Ultimatum On Bailout
  Written by Fawad Razaqzada
  Last updated 3/21/2013 1:51:35 PM ET
  Precious metals rose today as concerns intensified over the future of the eurozone while mixed global economic data rekindled growth worries. The ECB issued an ultimatum to Cyprus to come up with a bailout plan by Monday or else it would suspend its provision of emergency liquidity. Underscoring the crisis, Cyprus’ Popular Bank had “hours” of liquidity left according several media reports. Meanwhile ratings agency S&P trimmed the credit worthiness of Hungry by one notch to BBB- from BBB. Gold is currently displaying a bullish engulfing candle on the daily chart with price holding comfortably above $1600 and staring towards potential resistance around $1625 to $1630. Silver has touched its own resistance area around $29.25/.30 and has not come down much from there, suggesting price is winding up for a potential breakout.
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• Demand concerns weigh on oil prices
  Written by Fawad Razaqzada
  Last updated 3/21/2013 12:46:14 PM ET
  Crude oil traded lower for most of the day before turning momentarily mixed in the afternoon. Both the Brent and WTI contracts started the day lower as concerns about demand for oil intensified ...
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• GBP/USD rally short-lived?
  Written by Fawad Razaqzada
  Last updated 3/21/2013 7:07:24 AM ET
  UK February Retail Sales came in much higher than expected this morning , while Public Sector Net Borrowing increased less than anticipated. As a result, the pound rallied...
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• EUR/GBP: .8600 Ceiling Holding Strong
  Written by Matthew Weller
  Last updated 3/20/2013 1:32:45 PM ET
  From a technical perspective, the failure to hold the break above .8600 bodes poorly for the bulls. The pair has just carved out a Bearish Pin Candle* on the 4hr chart, suggesting a shift from buying to selling pressure and foreshadowing more weakness moving forward. With the uncertainty in Cyprus and Italy continuing to stretch on, a continued drop toward .8500 would not be surprising by the end of this week.
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• Precious metals lower as investors await key data releases
  Written by Fawad Razaqzada
  Last updated 3/20/2013 1:27:24 PM ET
  Precious metals edged lower today as concerns eased over Cyprus and equities rallied. The buyers were mainly on the side lines ahead of the Fed’s policy decision this evening and a batch of data releases tomorrow. Gold is likely to find some support around $1600 while resistance is expected to come in around $1625. The medium-term bearish trend would only resume if and when price closes below $1565 on a weekly chart. At the moment the technical picture is looking a lot healthier than it did a month or so ago. Meanwhile it is a different story for silver. Investors must be bored holding the shiny metal which has been stuck in a tight consolidative range between $28.30 and $29.25 for several weeks now. While there is demand for its safe-haven appeal, the same cannot be said about its role as a commodity. The HSBC’s Chinese manufacturing PMI is thus very important for silver, especially if there is a big deference in the actual reading from expectations (51.2).
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• Crude oil off highs ahead of FOMC
  Written by Fawad Razaqzada
  Last updated 3/20/2013 11:39:27 AM ET
  Crude oil started the day higher, rising along with other risk assets, after Cyprus’s parliament overwhelmingly rejected the controversial bailout deal. But the move lacked momentum and seemed to be driven by short-side profit-taking rather than fresh buying interest. The buyers were largely on the side-lines ahead of the EIA’s crude oil inventories report and the FOMC decision this evening. Inventories showed a surprise drawdown of 1.3 million barrels last week against expectations of a build of 1.8 million. Although this suggests that demand had picked up a tad, prices failed to move much on the news. In fact by late afternoon, both the Brent and WTI contracts had lost a significant portion of their earlier gains. Tomorrow we will have a much better understanding of crude oil’s fundamental driving forces. There is a raft of data expected from around the world, starting with HSBC’s Chinese manufacturing PMI.
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