Macro Morning: EU up, US down

By Chris Becker

Friday night saw two important economic releases surprise to the upside plus another Chinese surprise over the weekend. First, in Europe, the German CPI print for February ticked up which dragged the year-on-year up out of deflation at 0.1%, sending the DAX up nearly 0.9%:

Chart DAX30, D1, 2015.03.01 21:46 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Momentum is clearly accelerating here for the German market, but the technical pictures is different for the UK FTSE, which had a scratch day on Friday and is meeting resistance overhead on the dailies:

Chart DAX30, D1, 2015.03.01 21:46 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

In the US, the 4Q GDP print came in at 2.2%, beating expectations of a 2% growth rate, although it was the downside in pending home sales and very hawkish talk by Fed Governor Fisher expecting rate hikes sooner rather than later that dragged the S&P500 down. The S&P500 remains on trend but is poised to breakdown here on lack of buying torque from the buy the dip crowd:

Chart SP500, H4, 2015.03.01 21:52 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

SPI futures are pointing to only a few extra points on the open this morning on the ASX200, which is trying its hardest to get through the 6000 point barrier (definitely not on fundamentals).

The oil complex keeps paying the bills for intra-session traders, as both markers rallied on sell-side talk that a price recovery is imminent. Brent was up 4% to just over $62 per barrel while WTI jumped just over 3% to just below $50USD per barrel:

Chart CL-OIL, H4, 2015.03.01 21:56 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

It’s still a range bound trapped market with short term opportunities and clear levels of support and resistance for traders to push it around for a bit longer, although its tending to the short side with no positive momentum prints.

Gold put on a few dollars up to $1213USD per ounce with the bullish falling wedge pattern firming but not yet confirmed with a proper breakout, but this looks interesting:

Chart XAUUSD, D1, 2015.03.01 21:58 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

After the 1% breakout on Thursday, the US Dollar Index (DXY) was steady on Friday night with the falls in Euro offset by rises in USDJPY pair, while the Aussie and Cable tread ground.

Euro continues to weaken as expected, a weak rally throughout the Asian session slammed on the London open, taking the union currency back down below the 1.12 handle:

Chart EURUSD, H4, 2015.03.01 22:03 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Cable (GBPUSD) shuffled around its point of control at 1.5340, which is where I’m looking for confirmation of a reversal below 1.5340 on the four hourly charts.

After that nice reversal on Thursday, we’ve seen some tentative resistance build at the 78.30 level for AUDUSD in the short term:

Chart AUDUSD, H1, 2015.03.01 22:06 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

While a medium term bottom might be in at around the 78 cent level, there has been a distinct lack of buying torque and a tendency for Aussie to sell off at the slightest whiff of bad news, so to be long here on a longer timeframe is brave.

We start the data cycle this week with some mid tier releases in Australia, namely the manufacturing PMI and home sales prints, then its Eurozone CPI final print for February followed by the US personal income and closely watched ISM manufacturing index reports.

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