The dollar remained broadly higher against most major currencies in a quiet trading session on Tuesday, where the dollar recovered some of the losses posted after Friday's disappointing U.S. employment report. According to U.S. Federal Reserve Bank of Minneapolis president the Fed may not need to raise its benchmark Federal Funds Rate until the second half of 2016 in light of the outlook for low employment and low inflation. In the European front, market research group reported that the euro zone's services PMI slipped to 54.2 last month, from 54.3 in February when analysts had expected the index to remain unchanged. Germany's services PMI rose to 55.4 in March from 55.3 the previous month, and France's services PMI fell to 52.4 last month from 52.8 in February. According to analysts, the PMI's are indicating weak growth for the 1st quarter. Later in the day, the focus will shift to the Fed and the minutes of its March meeting for more clues regarding the central banks next step on monetary policy.
Yesterday the U.S. dollar gained more than 1% against the euro, with no important announcements published from the U.S front and after the weaker than expected services data in the euro zone and expectations for a delayed interest rate hike by the Federal Reserve. Markit Eurozone Services Business Activity Index was announced at 54.2 in March, while expansion in output fell below the estimates of 54.3. The index rose from 55.3 to 55.4 in Germany, indicating accelerating growth while France fell to 52.4 last month from 52.8 in February. For today the euro area is to publish data on retail sales, while Germany is to release data on factory orders. For today the euro area is to publish data on retail sales, while Germany is to release data on factory orders. Later in the day, the Fed will release the minutes of its March meeting.
Pivot
1.091
Support
1.08
1.0745
1.071
Resistance
1.091
1.096
1.1035
Scenario 1: Short positions below 1.091 with targets @ 1.08 & 1.0745 in extension.
Scenario 2: Above 1.091 look for further upside with 1.096 & 1.1035 as targets.
Comment: The pair is posting a rebound but stands below its resistance.
Following the weak employment data on Friday, gold received further support by comments from the U.S. Federal Reserve Bank of Minneapolis president that the Fed may not need to move to a rate hike until the second half of 2016. A rate rise is seen as hurting gold, given that it will most likely mean a stronger dollar and higher interest rates. Rising rates make holding gold less attractive than holding other interest bearing assets. Gold traders will be focusing on Fed minutes due later in the day which may give more clarity on the central bank's approach.
Pivot
1202.5
Support
1202.5
1194.5
1178.5
Resistance
1224
1229.5
1236
Scenario 1: Long positions above 1202.5 with targets @ 1224 & 1229.5 in extension.
Scenario 2: Below 1202.5 look for further downside with 1194.5 & 1178.5 as targets.
Comment: A support base at 1202.5 has formed and has allowed for a temporary stabilisation.
OIL/USD
Crude oil prices reached a 7-week high on Tuesday as Saudi Arabia has raised crude production to its highest level ever, feeding unexpectedly strong demand from foreign refiners and increased capacity at home. The oil minister, Ali al-Naimi, said on Tuesday the country produced 10.3m barrels per day in March, a figure that exceeds the previous high of 10.2m barrels per day in August 2013. Support in prices came after Naimi made separate comments about working with other big producers to stabilize the market. For today, markets will be focusing on inventory data from the U.S on Wednesday for further indications on demand for the fuel.
Pivot
51.15
Support
51.15
49.8
48.2
Resistance
55.15
57.05
58.7
Scenario 1: Long positions above 51.15 with targets @ 55.15 & 57.05 in extension.
Scenario 2: Below 51.15 look for further downside with 49.8 & 48.2 as targets.
Comment: The RSI is around its neutrality area at 50%
DOW/USD
U.S. stocks closed on negative territory on Tuesday, as losses in the Utilities, Telecommunication and Consumer Services sectors added pressures on all main indices. Markets were trading on positive for most of Tuesday, however, gains were reversed later on, due to investor concerns that the sharp recovery in the dollar will have an impact on earnings. According to Reuters Wall Street is greeting what is expected to be the worst earnings season since 2009. Some of the key earnings results will be released from JPMorgan Chase (NYSE:JPM) and General Electric next week. Traders will be focusing on Fed minutes due on Wednesday which may give more clarity on the central bank's approach regarding the interest rates.
Pivot
17585
Support
17585
17040
16330
Resistance
18290
18900
19200
Scenario 1: Long positions above 17585 with targets @ 18290 & 18900 in extension.
Scenario 2: Below 17585 look for further downside with 17040 & 16330 as targets.
Comment: The RSI lacks downward momentum.
Twitter (NYSE:TWTR) posted a sharp rise on Tuesday as reports were published that the social media company has attracted two other companies, including Google (NASDAQ:GOOGL) that expressed interest in buying the social media company. According to reports, the company hired Goldman Sachs (NYSE:GS) as an advisor for confronting the potential buyers. Further support in the stock came after Dan Niles, a senior portfolio manager at asset management firm AlphaOne, told CNBC that he purchased Twitter shares in early March.
Pivot
47.9
Support
48.9
47.9
45.4
Resistance
53.6
55.1
56.6
Scenario 1: the upside prevails as long as 47.9 is support.
Scenario 2: the downside breakout of 47.9 would call for 45.4 and 43.9.
Comment: the RSI is above 70. It could mean either that the stock is in a lasting uptrend or just overbought and therefore bound to correct (look for bearish divergence in this case). The MACD is above its signal line and positive. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 48.55 and 46.4).