US equities dropped for the third straight day overnight with intensifying selling pressure. DJIA closed 292.6 pts, or -1.62% down at 17718.54 and is head back to 17620.49 near term support. S&P 500 also lost -30.45 pts, or -1.46% to close at 2061.05 and is having 2039.69 support in radar. Some analysts said investors are getting cautious ahead of earnings reports which could show performances hurt by slowing global demand and a strong dollar. Other markets were relatively steady. Gold continues to ride on weak dollar and is heading back to 1200. Crude oil was additionally lifted by news that Saudi Arabia and its Gulf Arab allies began a military operation in Yemen. The dollar index is soft below 97 handle but is losing some downside momentum ahead of key near term support at 95.48.
Overall technical pictures in the currency markets are unchanged. EUR/USD is held below 1.1096 resistance, USD/JPY above 118.67, USD/CAD above 1.2406. Even AUD/USD, which breached 0.7912 near term resistance briefly, was rejected. Dollar is still maintaining a bullish outlook in general. Yen is staying is sideway consolidation against European majors with near term bearish outlook maintained in EUR/JPY and GBP/JPY. EUR/GBP's recovery continued but is held below 0.7403 near term resistance and thus, there is no indicate of trend reversal yet. Similarly, EUR/CAD and EUR/AUD are staying in sideway pattern and maintain bearish outlook. The currency markets generally need more stimulus to trigger breakout from the current consolidative mode.
Also the data front, German Gfk consumer sentiment, Eurozone M3 and UK retail sales will be featured in European session. US will release jobless claims.