Daily Market Review - 03/25/2014

US Stock Market

US indices closed the trading day negative following the release of worse than expected Chinese and European data. The uncertainty between Russia and Ukraine is also adding to the negative impact. The NASDAQ fell by 0.98%, the S&P 500 by 0.49%, and the Dow Jones lost 0.16% from its value. Technically, according to the 4-hour chart, the S&P 500 has strong support at 1,840, and yesterday the index failed to break it. Should the index maintain this support level today, we might see a rise to around 1,860, and breaching 1,860 could lead the index to1,875. If the index crosses below the 1,840 support level, this will signal the end of the bullish momentum and there could be a further drop with the target at 1,805.

Gold

Gold fell, continuing its bearish momentum, reaching the 38.20% Fibonacci Retracement level on the daily chart. $1,305 is a strong support level for gold and breaking this could mean a straight drop to around $1,290. If gold maintains this support, it may rise to $1,340 or even $1,360.

Crude Oil

Crude Oil is moving between $99 to $100.25 a barrel. Last Friday it succeeded in hitting the resistance level, while yesterday it almost reached the support – all of which indicates that the uncertainty over Russia and Ukraine is making it difficult to know where oil is headed. The commodity is also affected by Wall Street, because any rise or fall in stocks will see a corresponding movement in oil. The Crude Oil Inventories are due for release on Wednesday.

Euro (EUR)

The euro rose sharply against the US Dollar after maintaining the support at 1.3750. This seems more like automatic purchasing due to speculation that Russia will not use military force against Ukraine. Yesterday, if the pair had kept 1.3850 as the support level for at least another day, then the trend may have turned bullish. Now the EUR/USD is trading around 1.3835. According to the 8-hour chart, this price is below the trend line. We anticipate another attempt to breach 1.3850. However, maintaining this resistance level could lead the pair to around 1.3550. Today, the German Ifo Business Climate is expected at 110.9 vs. 111.3 previously.

Chinese Yuan (CNY)

The Chinese Yuan rose against the US Dollar from its low of 6.2100 to reach 6.1810, after the central bank strengthened the reference rate for the local currency. The HSBC Flash Manufacturing PMI came out worse than expected, which also pushed the USD/CNY lower. Technically, the pair could drop to 6.1600 today if it maintains the current resistance level of 6.2100. Should the central bank strengthen the Yuan again, then it might even reach 6.1000, as this looks like a strong support level for the pair.

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