The dollar gained against most major currencies on Tuesday, after data showed that the U.S. trade deficit widened less than expected in May and as demand for the safe-haven greenback remained supported on concerns of a collapse in the Greek financial system. The U.S. Bureau of Economic Analysis reported on Tuesday that the U.S. trade deficit rose to $41.87 billion in May from $40.7 billion in April. In the European front, Greece was given a new deadline until Thursday to present new proposals to secure a deal with creditors, and has called a full EU summit for Sunday. Eurogroup President Jeroen Dijsselbloem told reporters in Brussels there is "a great sense of urgency" to come to a resolution and he is waiting to hear new proposals from Greek officials as Greek banks have days of liquidity left. Stocks rebounded in the early afternoon and closed higher, mainly on hopes that Greece comes to its senses and proposes a suitable debt deal to its creditors as soon as Wednesday. For today, the U.K. government is to release its annual budget statement, Canada is to publish data on building permits and later in the day, the Federal Reserve is to publish the minutes of its June meeting.
The euro traded weaker in Asia on Wednesday as the country is trying to prevent a financial collapse that could take place in a matter of days. Greece has a five-day deadline to submit a detailed package of reforms to international creditors in return for a bailout or risk the "bankruptcy" of both the country and its financial system, European Council President Donald Tusk and Commission President Jean-Claude Juncker warned Tuesday. Greece was given a new deadline until Thursday to present new proposals to secure a deal with creditors, and has called a full EU summit for Sunday. In the U.S. front, the dollar was supported yesterday by positive trade deficit data with the EUR/USD pair fluctuating around the 1.10 level ahead of today's Federal Reserve minutes of its June meeting.
Pivot: 1.1096
Support: 1.096; 1.0915; 1.0865
Resistance: 1.1055; 1.1085; 1.112
Scenario 1: Long positions above 1.096 with targets @ 1.1055 & 1.1085 in extension.
Scenario 2: Below 1.096 look for further downside with 1.0915 & 1.0865 as targets.
Comment: The RSI is above its neutrality area at 50%.
OIL
Oil prices continue their drop on Wednesday, after posting a sharp drop of almost 10 percent this week as developments in Greece combined with China's stock market meltdown, talks with Iran over its nuclear program, a stronger dollar and the recent increase rise in the number of U.S. oil rigs add significant pressures on demand. Negotiations over Iran's nuclear program, which may conclude this week in Vienna, have increased the possibility that a country that was once OPEC's second-largest producer will start exporting as soon as sanctions are lifted. Investors attention is now mainly shifted towards today's weekly inventory figures from the U.S. Department of Energy.
Pivot: 53.4
Support: 49.87; 48.9; 46
Resistance: 53.4; 54.7; 55.5
Scenario 1: Short positions below 53.4 with targets @ 49.87 & 48.9 in extension.
Scenario 2: Above 53.4 look for further upside with 54.7 & 55.5 as targets.
Comment: As long as 53.4 is resistance, likely decline to 49.87.
DOW JONES
After plunging in the morning, stocks rebounded in the early afternoon and closed higher, mainly on hopes that Greece comes to its senses and proposes a suitable debt deal to its creditors as soon as Wednesday. The main U.S. stock indices ended the day higher as gains in the Utilities, Consumer Goods and Oil & Gas sectors led the way. The Dow Jones Industrial Average rose 0.53% with the best performers of the session being, Coca-Cola which rose 2.11%, Procter & Gamble Company (NYSE:PG) which added 2.09% and Boeing Company (NYSE:BA) that was up 1.87%. Market focus will remain on Greek developments and the emergency EU summit on Sunday while for today the Federal Reserve is to publish the minutes of its June meeting.
Pivot: 18350
Support: 17410; 17200; 17040
Resistance: 18350; 18650; 18900
Scenario 1: Short positions below 18350 with targets @ 17410 & 17200 in extension.
Scenario 2: Above 18350 look for further upside with 18650 & 18900 as targets.
Comment: The RSI is bearish and calls for further decline. The index broke below a rising trend line.
COCA COLA
Coca-Cola Enterprises (NYSE:CCE) was downgraded by Zacks from a "hold" rating to a "sell" rating in a report issued on Tuesday, AnalystRatings.Net reports. According to Zacks, "Ongoing economic softness and operating challenges in Europe, evolving consumer landscape and an increasingly competitive environment have been hurting the company's top line. Management expects these challenges to persist in 2015 which, coupled with increasingly strong currency headwinds, will limit revenue growth. Despite the news, the stock price has bounced from levels near the weekly low and ended the day higher by more than 2 percent.
Pivot: 41.7
Support: 39; 37.8; 36.8
Resistance: 41.7; 43.7; 45
Scenario 1: Short positions below 41.7 with targets @ 39 & 37.8 in extension.
Scenario 2: Above 41.7 look for further upside with 43.7 & 45 as targets.
Comment: The RSI is below its neutrality area at 50%