TitanTrade Daily Market Review- 10/03/15

Facebook Downtrend Prolongs; GBPUSD Decline Likely



GBPUSD Ready to Test 1.5000 | Potential Break of Key Support

GBPUSD has been on a steady decline recently and is on its way to test the major support level at the 1.5000 mark, which hasn’t been broken in years. Another bounce off this floor might mean a move back up to the 1.5500 major psychological resistance area.

On the other hand, a downside break might mean more longer-term losses for the pair, especially since the US economy is doing well and the Fed is expected to tighten monetary policy by June this year. Stochastic on the daily time frame is already indicating oversold conditions, which suggests that a bounce might take place.

The path of least resistance is to the downside though, as the Fed is more likely to hike rates before the BOE does. Although Governor Carney and some hawkish MPC members have been saying that their next move is likely to be a rate hike, recent economic data haven’t reflected much strength in the economy just yet

Event risks for this setup include a speech by Governor Carney and MPC member Ian McCafferty in today’s London trading session. Later in the week, US retail sales data is up for release and strong readings might eventually trigger a downside break of 1.5000.


NZDUSD Major Support at .7200 | Breakdown Below .7300

NZDUSD is showing increased downside momentum, after price broke below the .7300 major psychological support and appears to be headed for the longer-term floor around .7200. A bounce off this area might take place, as stochastic is already indicating oversold conditions.

However, fundamentals suggest further declines for the pair, as the US economy has printed an upbeat jobs report and is leading many to speculate that the Fed could hike rates in June. Data from New Zealand has also turned out relatively well, but the RBNZ isn’t likely to tighten yet.

The main event risk for this setup is the upcoming RBNZ interest rate decision, during which policymakers could give more clues on their economic assessment and outlook. Upbeat forecasts could lead to a strong bounce for the Kiwi, possibly back until the .7600 levels or higher.

On the other hand, dovish comments could set off a breakdown of .7200 and more losses, possibly until the .7000 major psychological support. US retail sales figures are also due later this week and might be a catalyst for this trade setup.


Facebook Shares Turn Lower | Approaching SMA Suppor 

Facebook shares failed in their latest attempt to break above the near-term resistance and seem to be headed back towards the middle of the range again. This is close to the simple moving averages, which have been crossing back and forth, indicating range-bound movement.

Risk aversion has been keeping equity gains in check, particularly for Facebook which hasn’t announced any company developments so far. Investors are still doubtful that the social media company could monetize its recent acquisitions, as they are waiting to see how Facebook could make more revenue.

With that, another test of support at $77.50/share or the 50 SMA might be seen in the near term. A drop below this level could lead to a test of the range support closer to the 200 SMA or the $74/share area.

For now, the shorter-term SMA is slightly above the longer-term SMA, indicating that a bounce is likely to take place. MACD is pointing down though, suggesting that selling pressure is building up. Meanwhile, RSI is on middle ground, barely offering any clues for now. Risk sentiment could continue to drive price action, as the US retail sales report could pose an event risk for this setup.