The dollar moved lower against most major currencies on Tuesday, after the release of weak retail sales data in the U.S that renewed concerns over the strength of the economy, and increased uncertainty over the timing of a potential rate hike. The U.S. Commerce Department said that retail sales rose 0.9% last month, below expectations for a gain of 1.1%. In a separate report, the Commerce Department said that producer prices increased 0.2% last month, in line with forecasts and after a drop of 0.5% posted in February. In the European front, the euro received further support after the International Monetary Fund raised its growth forecast for the euro zone in 2015 from a previous 1.2% to 1.5%. The IMF supports that a weaker euro and lower energy prices will bolster growth in the region. The IMF left its forecast for global growth this year unchanged at 3.5%, but warned that the recovery is "moderate and uneven". For today the focus is shifted to the ECB and the announcement of its interest rate decision. The rate announcement will be followed by a press conference with President Mario Draghi. In the U.S front, reports on industrial production and manufacturing activity in New York state are due to be released.
The euro posted a sharp rise against the dollar on Tuesday, rebounding from one-month lows after U.S. data on retail sales were announced below market expectations. The Commerce Department reported that U.S. retail sales rose by 0.9% in March, which was below the consensus forecast for a 1.1% increase. The data struck optimism for a potential rate hike in the middle of the year and send the dollar dropping against most currencies. Further support came on the euro after the IMF revised its growth forecasts for 2015 from 1.2% to 1.5%. For today the focus is shifted to the ECB and the announcement of its interest rate decision. The rate announcement will be followed by a press conference with President Mario Draghi. In the U.S front, reports on industrial production and manufacturing activity in New York state are due to be released.
Pivot
1.059
Support
1.059
1.052
1.046
Resistance
1.073
1.0785
1.083
Scenario 1: Long positions above 1.059 with targets @ 1.073 & 1.0785 in extension.
Scenario 2: Below 1.059 look for further downside with 1.052 & 1.046 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Despite the sharp drop in the dollar and the weak U.S retail sales data on Tuesday, gold prices fell slightly as metal investors appear to be locking in profits. U.S retail sales rose by 0.9% which was lower than the expected 1.1%, however, this was still the highest monthly increase since last March. In addition disappointing Chinese trade data on Monday added further pressure on prices as China is the world's second-largest purchaser of the precious metal. For today, gold traders will be focusing on industrial production and manufacturing activity data from the U.S, due to be released later in the day.
Pivot
1201
Support
1183.5
1180
1174
Resistance
1201
1209.5
1215.8
Scenario 1: Short positions below 1201 with targets @ 1183.5 & 1180 in extension.
Scenario 2: Above 1201 look for further upside with 1209.5 & 1215.8 as targets.
Comment: As long as 1201 is resistance, likely decline to 1183.5.
OIL/USD
Crude oil prices gained in Asia on Wednesday as China's first quarter GDP met expectations even as other data from China on retail sales, industrial output and fixed asset investment fell below expectations. In addition, rising tensions in Yemen and mixed data on U.S. inventories pushed the price of the fuel to the upside. Oil traders will be watching closely on the release of the EIA weekly inventory report on Wednesday. Last week, prices posted a sharp drop after inventory levels increased by 10.95 million barrels for the week that ended April 3, representing the highest weekly increase in more than 13 years.
Pivot
52.1
Support
52.1
51.45
50
Resistance
54.2
55.7
56.5
Scenario 1: Long positions above 52.1 with targets @ 54.2 & 55.7 in extension.
Scenario 2: Below 52.1 look for further downside with 51.45 & 50 as targets.
Comment: The RSI is mixed to bullish.
The U.S. dollar fell sharply on Tuesday, weighed by mixed retail sales data and weak economic growth predictions by the IMF, while energy stocks rose after a surprise drop in forecasts for U.S. oil production. Despite its recent strength, the U.S. dollar fell on Tuesday after U.S. retail sales rose at a slower pace than expected and after the International Monetary Fund lowered forecasts for U.S. growth, to 3.1 percent this year from January's expectations of 3.6 percent. The S&P energy sector jumped 1.8 percent with Energy shares supporting other stocks on Wall Street. Investors will be focusing mainly on U.S. corporate earnings data. A lower full-year earnings forecast from Johnson & Johnson (NYSE:JNJ) due to the impact of dollar strength kept gains on the main indices restricted
Pivot
2039
Support
2039
1972
1904
Resistance
2119
2180
2215
Scenario 1: Long positions above 2039 with targets @ 2119 & 2180 in extension.
Scenario 2: Below 2039 look for further downside with 1972 & 1904 as targets.
Comment: The RSI is above its neutrality area at 50%.
INTEL
Shares in computer chipmaker Intel Corporation (NASDAQ:INTC) closed in negative territory on our platform yesterday, however, they posted a significant gain in after-hours trading after the tech giant posted flat earnings for the first quarter. Intel reported net profits of $1.99 billion or 0.41 per share on Tuesday for the quarter that ended in late-March, up slightly from the 1.93 billion or 41 cents per share it earned during the same period in 2014. Intel also reported operating income of $2.6 for the quarter, up 4% on a year-over-year basis. Merger negotiations between Intel and Altera (NASDAQ:ALTR), reportedly reached a dead end last week due to different views on stock price. On Tuesday, shareholders of Altera pushed the company to resume the talks.
