The U.S. dollar gained against most currencies on Friday, after positive inflation and housing data from the U.S. raised expectations for an interest rate hike this fall. U.S. consumer prices rose 0.3% in June, the fifth consecutive monthly increase, while core prices, which exclude food and energy, increased 0.2% last month, adding to signs for higher inflation.Another report showed that U.S. housing starts rose by 9.8% in June when analysts had expected an increase by 6.2% last month. In addition, U.S. building permits surged by 7.4% in June, the most since July 2007, indicating a healthy housing market. Federal Reserve Chair Janet Yellen said earlier in the week that the central bank was on track to raise interest rates by the end of the year if the economy continues to grow as expected. Elsewhere, the Canadian, Australian and New Zealand dollars fell to yearly lows against the dollar, pressured by falling commodity prices and recent weakness in China's economy. The Nasdaq closed in record highs as Google posted a historic rally in end the week. In the week ahead, market players will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
The euro I still trading close to two month lows on Monday, as the dollar was supported by Federal Reserve Chair Janet Yellen's recent comments which increased expectations for an interest rate hike later this year. Greek banks were set to reopen on Monday after a forced 3-week closure but restrictions on cash withdrawals were still to remain. Meanwhile, demand for the dollar remained supported after strong housing and inflation data on from the U.S. on Friday raised expectations for a U.S. rate hike in fall. In the week ahead, market players will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
Pivot: 1.091
Support: 1.081; 1.0735; 1.066
Resistance: 1.091; 1.0985; 1.1035
Scenario 1: Short positions below 1.091 with targets @ 1.081 & 1.0735 in extension.
Scenario 2: Above 1.091 look for further upside with 1.0985 & 1.1035 as targets.
Comment: A break below 1.081 would trigger a drop towards 1.0735.
GOLD
Gold prices posted a sharp drop on Monday with market uncertainty fading away, as Greece announced a re-opening of its banks on Monday and a deal reached by six major powers last week to ease economic sanctions on Iran. The metal has also received strong pressures by Federal Reserve Chair Janet Yellen's recent comments which increased expectations for an interest rate hike later this year and by recent strength in the dollar, causing it to drop to 7 month lows. In the week ahead, gold traders will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
Pivot: 1130
Support: 1087; 1080; 1072
Resistance: 1130; 1139; 1146
Scenario 1: Short positions below 1130 with targets @ 1087 & 1080 in extension.
Scenario 2: Above 1130 look for further upside with 1139 & 1146 as targets.
Comment: As long as 1130 is resistance, likely decline to 1087.
OIL
Crude oil prices posted their third consecutive weekly losses last week, pressured by a stronger U.S. dollar, and as investors assess the consequences of the recent Iranian Nuclear deal and the upcoming impact on supply. Prices received some support by data showing that Saudi Arabia's crude oil exports fell in May to their lowest since December and by data from Baker Hughes (NYSE:BHI) Inc showing that U.S. oil rigs were reduced by seven last week. Following the recent turn of events, Russian Energy Minister Alexander Novak said he will meet OPEC Secretary-General Abdullah al-Badri in Moscow on July 30 to discuss oil markets and the Iran situation.
Pivot: 51.25
Support: 50; 49.3; 48.75;
Resistance: 51.25; 52.2; 52.85;
Scenario 1: Short positions below 51.25 with targets @ 50 & 49.3 in extension.
Scenario 2: Above 51.25 look for further upside with 52.2 & 52.85 as targets.
Comment: As long as 51.25 is resistance, likely decline to 50.
NASDAQ
U.S. stocks were mixed on Friday, as the Dow Jones Industrial Average gave away some of the recent gains while recent rise in Google Inc (NASDAQ:GOOGL) took the NASDAQ to all-time records. Shares in Google skyrocketed nearly 100 points or 16.24% to 699.52, one day after the multinational internet search engine company reported strong advertising revenue growth in its second quarter earnings. At one point, Google reached an all-time record high at $703 a share. Google finished as the biggest gainer on the NASDAQ, just ahead of FB which rose more than 4.5% to 94.97. U.S. company earnings will be in focus for the following week along with data on home sales and jobless claims for further indications on the strength of the economy.
Pivot: 4690
Support: 4280; 4203; 4078
Resistance: 4690; 4816; 4904
Scenario 1: Short positions below 4690 with targets @ 4280 & 4203 in extension.
Scenario 2: Above 4690 look for further upside with 4816 & 4904 as targets.
Comment: The upward potential is likely to be limited by the resistance at 4690.