Demand for the dollar was underpinned by expectations for higher interest rates, as investors regained confidence that the U.S. economy would continue to recover after recent economic reports pointed to a slowdown at the start of the year. The greenback received a boost earlier in the week after comments by the presidents of the New York and Richmond Federal Reserve banks made the case for the Fed to begin policy tightening as early as the summer. Some investors had pushed back the timing of a rate hike until late 2015 after a surprisingly weak U.S. employment report for March.
In the week ahead, Wednesday's monetary policy announcement and press conference by the ECB will be in focus. U.S. data on retail sales, inflation and consumer sentiment will be closely watched for further indications on the strength of the recovery.
The euro was down against the dollar for the fifth straight session on Friday, falling to one-month lows as the contrasting monetary policy stance of the European Central Bank with the Federal Reserve acted as a drag.
For the week the pair lost 3.57%, the worst weekly performance since September 2011.
The single currency has already weakened broadly this year after the ECB unveiled a trillion-euro quantitative easing program in January.
This week investors' focus will be on Tuesday U.S. retail sales and producer prices; Wednesday ECB interest rate decision, followed by a press conference with President Mario Draghi, while in U.S. reports on industrial production and manufacturing activity in New York state will be carefully monitored; Thursday US data on jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region; to conclude with Friday consumer price index from both Eurozone and US.
Pivot
1.0685
Support
1.0575
1.052
1.046
Resistance
1.0685
1.073
1.0795
Scenario 1: Short positions below 1.0685 with targets @ 1.0575 & 1.052 in extension.
Scenario 2: Above 1.0685 look for further upside with 1.073 & 1.0795 as targets.
Comment: The pair remains within a bearish channel.
Last week, gold prices rose for the first time in three sessions on Friday, amid speculation key U.S. data next week will add to evidence that the economy slowed in the first quarter.
Gold prices rose in Asia on Monday, shrugging off disappointing trade data in China that triggered safe haven buying along with the Bank of Japan March board meeting minutes expressing caution on aggressive monetary easing.
In the week ahead, markets will be looking ahead to Tuesday's report on U.S. retail sales, as well as Friday's reports on inflation and consumer sentiment, for further indications on the strength of the economy.
Pivot
1192.4
Support
1192.4
1185
1180
Resistance
1213.1
1215.8
1224.45
Scenario 1: Long positions above 1192.4 with targets @ 1213.1 & 1215.8 in extension.
Scenario 2: Below 1192.4 look for further downside with 1185 & 1180 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
OIL/USD
Oil prices inched up on Monday following a strong session on Friday, as financial traders increased their bets on higher prices amid a slowdown in U.S. drilling, but analysts warned fundamentals remained weak.
That was the biggest one-week rise in bullish bets since 2011, according to Reuters.
Although there are tentative signs of demand improving and rig counts fell to the lowest level since 2010, an ongoing global market surplus – driven by swelling U.S. inventories (the biggest weekly jump since March 2001) and Saudi Arabian output to record high levels – should limit any potential rally.
Furthermore World oil markets will not see a significant rise in Iranian supplies for up to five years even if the OPEC member and world powers clinch a final nuclear deal by end-June, as said by Fatih Birol chief economist and future head of International Energy Agency (IEA).
Pivot
52.3
Support
49.8
48.2
47.1
Resistance
52.3
54.1
55.7
Scenario 1: Short positions below 52.3 with targets @ 49.8 & 48.2 in extension.
Scenario 2: Above 52.3 look for further upside with 54.1 & 55.7 as targets.
Comment: As long as 52.3 is resistance, look for choppy price action with a bearish bias.
DOW/USD
U.S. stocks closed higher Friday, with the Dow Jones Industrial Average leaping more than 100 points, as the industrial sector drove the market higher, led by an 11% gain from multinational conglomerate General Electric Company (NYSE:GE).
Economists are looking ahead to banking earnings this week, with JPMorgan Chase & Co (NYSE:JPM). and Wells Fargo & Company (NYSE:WFC) reporting quarterly results Tuesday, followed by Bank of America Corporation (NYSE:BAC) on Wednesday and Goldman Sachs Group Inc (NYSE:GS). on Thursday.
Investors will also be eyeing U.S. retail sales for March, released Tuesday, along with the Federal Reserve's Beige Book, published Wednesday. The central bank publishes it eight times a year, highlighting the current condition of the U.S. economy within the Fed's 12 districts.
Meanwhile, the consumer price index, which measures the average prices of consumer goods and services, such as transportation, food and medical care, is issued Friday.
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 has just broken above a declining trend line.
Last week there was Facebook F8 2015, the annual two-day developer conference, which has attracted more than 2,000 developers from around the world.
Each wants to know if Facebook Inc (NASDAQ:FB). CEO Mark Zuckerberg has any game changers in store. And there are 3 Facebook latest acquisitions:
- WhatsApp, a mobile messaging service, acquired for $21.8 billion on Feb. 19, 2014.
- Oculus, a maker of virtual reality goggles, acquired for $2 billion on March 25, 2015.
- Instagram, a photo/video sharing social site, acquired for $1 billion on April 9, 2012.
So Facebook company stock price just got another bullish signal with an upped one-year target from analysts, which expect even more upside, infact Facebook stock could double to $161.36 a share in the next three years.
Pivot
77
Support
77
73.3
68.45
Resistance
86.2
89.5
94.5
Scenario 1: Long positions above 77 with targets @ 86.2 & 89.5 in extension.
Scenario 2: Below 77 look for further downside with 73.3 & 68.45 as targets.
Comment: The RSI is mixed with a bullish bias. The validation of the ascending triangle calls for further upside.
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