EUR/USD: technical view for 28/03/18

The pair could not gain a foothold above the level of 1.2425 and again returned to the range 1.2270-1.2425. This behavior is due to the release of weak data on the economy of Germany and the eurozone, which indicate a weakening of economic growth in the region.
The price is located above the middle line of the Bollinger bands, above EMA 5 and EMA 13. RSI is above the level of 50% and slightly increases. Stoch are turned up. MACD is above the zero mark and is decreasing. Indicators do not confirm each other.
If the pair does not rise above the level of 1.2425, it could, on the wave of strong data on US GDP, drop to 1.2350.

High volatility in the markets will continue in the foreseeable future

The European economy against the backdrop of strong post-crisis economic growth continues to demonstrate a slowdown in inflationary pressures, as well as a noticeable decline in business activity, consumer and business confidence.
Published Tuesday data on the import price index in Germany indicate that after a fairly significant surge last year, and then the same decline in the current rate continued to fall and, according to the information provided, for the first time since November 2016 moved to negative territory.
It was assumed that the price index for imports in Germany in annual terms will fall in February by 0.3% against the increase of the previous year by 0.7%, but it fell by 0.6%. The monthly value of the indicator also showed negative dynamics in February, having decreased by 0.6% with a 0.3% decline forecast and a 0.6% increase in January.
As for the British pound, it is also possible to speak about its probable local decline, if the arrangements for the UK's exit from the European Union slow down. While the expectation of an early resolution of Brexit supports an undervalued pound, and still high inflation stimulates hopes that the Bank of England will raise interest rates already at the May meeting.
In general, observing the world markets and for the currency one in particular, we can state the fact that uncertainty remains, which does not allow investors to concentrate and trade both for raising and lowering. We continue to believe that high volatility in the markets will continue.

Copper - the first victim of the trade war between the US and China?

Last week, the most serious sale took place in two years, as investors were increasingly concerned about the prospects for a trade war. After this sale, the metals seem to have calmed down. However, copper along with other non-noble metals fell again at the auction in Shanghai this week.
This decline seems to have occurred because of the events of Friday. China finally responded to Trump's tariffs referring to section 232 on steel and aluminum imports, announcing plans to introduce reverse tariffs of up to $3 billion on US goods, including seamless steel pipes and aluminum scrap, which threatens to slow global economic growth.
After this announcement, the price of copper fell 1.15%, and non-precious metals showed the worst weekly decline since early February. Quotes fell below the level of the September consolidation, breaking the level of the 200-period moving average, signaling a target at 2.83.

Gold is guided by the dollar, but it is bullish

By the last decade of March, the value of gold recovered and returned to the target range of $1,350- $1,400 per troy ounce. On Monday, March 26, the precious metal was trading at $1,346.20 and slightly declining, but observing the behavior of the foreign exchange market, gold has a chance to continue the rising channel.
The main driver for the precious metal is the behavior of the US dollar. If the greenback continues to fall, gold will rush to the highs of last winter to levels $1364- $1365 per troy ounce. If for the greenback there are options to stabilize in the euro/dollar pair, gold will consolidate in a wide range of $1330- $1345. The nearest significant resistance levels are at $1354 and $1360, and support levels at $1,330 and $1305.

The ECB is moving towards the end of its quantitative easing. What follows?

The European Central Bank is slowly moving towards completing its four-year program of quantitative easing. And that may be the easier side compared to what is ahead, according to market observers.
And while the members of the ECB feel comfortable about the end of the bond repurchase at the end of the year, it could be much more complicated in 2019.
It is then expected that the ECB would pull out of the bond markets for the first time as a source of liquidity. In addition, we may witness one or two interest rises, in an environment where Mario Draghi paves the way for his successor.

GS: Brutal inflation and a Brent price of $82 in a few months

According to the US investment bank, investors must target the shares of dividend companies... because unpredictable inflation is forthcoming.
And it is very possible that the new Fed leader will resort to four interest rises this year and much more in the next year.
The bank does not recommend investors to close their long positions, but warn them to be extremely careful.
Here are some suggestions of the bank's letter to its clients:
There is inflationary pressure on wage growth for Americans, with average hourly wages rising by 3% on an annual basis.
The gradual rise in expectations for interest rates hikes by the Fed, which can still be defined as not very aggressive, given the dangers of rising inflation.
The bank expects a price increase for Brent to $82.50 a barrel, by the middle of the year.

The decline of US markets has scent of panic

Yesterday the US indices closed strongly on negative territory. The bad part is that during the over-the-counter market, the US and other world indices continued to fall.
Earlier this morning, the S&P 500 futures fell to 2,630 points, momentarily reaching 2,625 points.
Dow Jones and Nasdaq also had serious losses.
Even more were the losses of the European indexes, with the German DAX30 falling to 11 900 points, or nearly 3% below its yesterday's levels.
The blue-chip index Dow Jones Industrial Average lost 492 points, or 2% of its value yesterday, same happened with the S&P 500.
According to a number of analysts, the sell-offs of the US indices that were triggered by the imposed duties of Trump against China are very much resembling "panic selling".
Investors, however, must have such a kind of "panic selling" not always precede and determine a forthcoming raises.
Such opinions are imposed by the appreciation of gold and other precious metals. Gold returned to $1,340, while silver rose to more than $16.50 per ounce.

ING predicts oil price of $ 57 by the end of the year

Dutch bank ING forecasts a barrel price of $57 in the second half of this year. According to the financial institution, there is a risk that oil will fall below $60 a barrel as a result of an increase in exports from the US to Asia.
It is very likely to initiate a split between the OPEC agreement to cut production, experts from the Dutch bank said.
The fact that, in an environment of decline in production by OPEC and Russia, the US is increasing its production and exports to Asia, it may lead to some OPEC countries starting to retreat from the agreed production constraints.
And this could lead to a depreciation of oil, which added more than 40% since June last year.

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Bitcoin left in the middle of the corridor last weeks

The bitcoin is now close to the mid-line of the range of fluctuations of the last one and a half months (about 7-12 thousand dollars). The outset, perhaps in a narrower corridor, will still be preserved.
Why the price of bitcoin can't make a breakthru for several days in a row? The answer is very simple: the problem of scaling in bitcoin remains unresolved for the last three months. Therefore, from the point of view of fundamental analysis, while the bitcoin system can process an average of a maximum of 300,000 transactions a day, the fair price of bitcoin is estimated at between $5,000 and $7,500 per unit. Anything above this range can be considered overbought for bitcoin.
With the unresolved problem of scaling, if the price of bitcoin is above $7,500, then at any time it may drop even in the absence of any significant news. Therefore, we should not be surprised that in recent days the price of crypto currency has been adjusted.

Oil prices are stabilizing after the sharp drop

Oil prices stabilized on Tuesday morning after a strong decline in the previous trading session, prompted by expectations of further growth in the extraction of raw materials in the US. Futures for the North Sea Brent blend dropped 0.05 percent to $64.92 per barrel.
Futures contracts for US light oil WTI by this time traded at $61.33 per barrel, which is 0.05 percent lower than the previous closing.
On Monday, both benchmarks fell by about one percent.
Oil prices fell due to fears that the increase in production in the US could lead to an increase in the stock of raw materials in the country, analysts of the ANZ bank believe.
The Energy Information Administration (EIA) in its March review raised the forecast for oil production in the US in 2018. The Office expects that the volume of production of raw material in the US on average will grow by more than 120,000 barrels per day to 11.17 million barrels per day by the fourth quarter of this year. The previous forecast assumed growth to 11.04 million barrels per day.
Moreover, the production of shale oil resources in the US in April will increase by 131,000 barrels per day by March to 6.95 million barrels per day - a fresh maximum, according to the EIA.
The focus of investors' attention is data on weekly stocks of oil and petroleum products in the US from the American Petroleum Institute (API) and official EIA statistics.

Gold still falling

Quotations of gold futures fell during Asian trade on Tuesday. At COMEX, the division of the New York Mercantile Exchange, gold futures for April delivery are traded at a price of $1.321.70 per troy ounce. The support now is at $1.313.20 and resistance is at $1.329.80.
Futures on the USD index, showing the ratio of the US dollar to the basket of the six major currencies, rose by 0.06% and is trading at around $89.94. As for other commodities traded on COMEX, silver futures for delivery in May decreased by 0.01%, reaching $16.535 per troy ounce, while copper futures for delivery in May decreased by 0.03%, reaching the level of $3.120 per pound.

J. Gundlah: The spirit of volatility may not have come back to the bottle

Jeffrey Gundlach, the founder and CEO of DoubleLine Capital, has bad news for investors - the volatility index does not give clear signals to investors.
Markets are at an important crossroads, according to Gundlach.
The fall in the index was below the highest closing level since last year - at 16.04 on 10 August.
This year, of course, the story was far different, as the index rose momentarily during the day to levels of over 50 during the February crash.
The S&P 500 index has returned over its 50-day moving average, and technology stocks have returned to record levels. Still, it remains to be seen whether US stocks will have the strength to keep up.
It is very likely that the S&P 500 blue chip will try to get back above the psychological limit of 2,800 points, considering its closing on Friday.

Beware of the technology sector

The investor who ruled the world's largest technology fund during the "technological boom", again warned investors to keep themselves from the technology sector at the moment.
Paul Meeks, managing director of Sloy, Dahl & Holst, predicted that a new turbulence approaching the markets, given the rising asset prices.
Because they are so volatile and high beta, in correction, they will not adjust just by 2%. They will be down 20%, Meeks commented before the CNBC financial magazine at the end of last week.
This does not mean that Meeks abandons technology companies. The investor who holds in his portfolio shares of Apple and other technology companies believes that the sector is strong.
According to him, he has been watching the technology industry for a long time, and he claims that the foundation behind technology companies and compared to the other 10 sectors of the broad index is stronger than ever.
The expert's warning became a reality in celebrating new historical records for the Nasdaq technology company index, which rose by more than 7 percent from its bottom, with the February correction.
Facebook's is the top company in the FANG group according to the expert, as well as chip makers.

Draghi pushed the dollar up, dragged the gold down

Gold has fallen, and the dollar has risen since its three-week minimum against the euro after ECB chief Mario Draghi signaled that any normalization of monetary policy would be very "smooth" and "gradual".
The single currency recorded a significant decline over all major currencies, following Draggy's comments.
Draghi also said that inflation is still weak, which is likely to predict a slight change in ECB policy.
The spot price of gold fell 0.3 percent to $ 1 321.09 per ounce. It reached a one-week high of $ 1,340.42 an ounce on Wednesday before closing 0.6% down. Gold futures fell 0.4 percent to $ 1,321.80.
According to Georgette Boyle, an analyst at ABN Amro, the dollar will remain a key driver of the gold price. The only reason the gold price rose to $ 1,340 per ounce was the weakness of the US currency last week, the analyst said.

The dollar is a warning of a serious economic slowdown

The value of the dollar has yet to be lowered, according to some analysts who believe that there is still room for adjustment before the dollar gets better. And this downturn can be predetermined by fears for global economic recovery, analysts say.
President Trump's tariffs risk launching a global trade war that could hurt global growth, market observers say.
The dollar lost 7 percent against the yen from its peak on January 8 this year. This is interpreted as an annual loss of 34%, according to Bloomberg.
At a time when the world economy is just beginning to emerge from the crisis, one thing that could hurt this cycle is a trade war, and we are in the first phase of it, said Boris Schlossberg, Managing Director of BK Asset Management. According to him, the yen reflects this threat better, faster and stronger than other instruments.
The IMF head, Christine Lagarde, also warned of the negative impact of a potential trade war. If we witness a trade war, it will affect trade volumes and reduce global growth, Lagarde said.
Historically, the dollar has weakened as a result of fears of protectionism and trade wars. When former presidents like George Bush and Bill Clinton presented a wide range of import taxes in 2002 and 1995, the markets were selling the dollar as its value declined by 15% overall.

Gold fell on Wednesday

Gold also fell on Wednesday, due to fears of a trade war and the resignation of Trump's economic adviser. Since its rise from the previous days, as a result of political instability, the noble metal has fallen to trade levels from $ 1,325 per ounce.

This happened despite the observed decline in dollar levels compared to other major currencies. The euro, for example, rose to levels above 1.2400 this week, staying permanently above this limit, and seems likely to attack the next key level at 1.2500.

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Oil with a fall

Oil prices dropped on Wednesday after data suggest US stock growth, and financial markets have fallen as a result of fears of a trade war and the resignation of Trump's economic adviser.
US crude oil futures lost 1.28 dollars of value to a level of $ 61.10 a barrel, or a decline of nearly 2% a day.
Brent futures declined by 1.3 dollars to 64.40 dollars a barrel.
US oil inventories rose 2.4 million barrels last week, which was slightly below the analysts' average expectations of 2.7 million barrels.
Investors, however, sold the raw material as a result of concerns about the state of the world economy, in an environment of increased danger of a world trade war, which is unclear how it will affect the growth of the world economy.
Additional political tensions were also brought after the resignation of President Donald Trump's Chief Economic Adviser.

GS: Decline between 20 and 25% for US indices with 10-year interest rates at 4.5%

If 10-year interest rates reach 4.5 percent by the end of the year, stocks may see a sharp decline, according to the US investment bank Goldman Sachs Group Inc.
Stress tests made by the bank indicate that raising interest rates to 4.5 percent would trigger a serious fall in indices, according to analyst Danuan Sturvenen. He also commented that under such a scenario, the US economy would likely be seriously delaying, but would hardly get into recession.
An increase in interest rates to 4.5% by the end of the year would result in a 20 to 25% decline in stock prices, the analysis said.
While the recent decline and correction of the indexes are largely predetermined by the rise in 10-year bond yields, interest rates are expected to continue rising to 3.5 or 4%.
A drop between 20% and 25% in indices, from their peak at 2 872.87 points, would mean a drop to around 2 155-2 298 points. The indices ended last week at 2,747.30 points.
The broad US index, however, reached the lowest value of 2 581 points on 8 February.
If Goldman's scenario materializes, that would mean a long way down for the US indices.