Manufacturing data from the U.S. improved at a faster pace than expected in May causing the dollar to remain supported against most currencies on Monday, as the ISM PMI index rose to 52.8 last month, when analysts expected a result of 52.0 for May. In addition, the Commerce Department reported that U.S. personal spending was unchanged in April, compared to expectations for a gain of 0.2%. The report also showed that personal income increased by 0.4% in April, above forecasts for a 0.3% rise. Elsewhere, euro zone manufacturing PMI was announced at 52.2, unchanged from March's 10 month high. However, the region still displays weakness as France's manufacturing sector continues to drop, and Germany is growing at a moderate rate. All eyes are now turned upon Greece as the leaders of Germany, France and Greece held debt negotiations late Monday in order to reach to a deal ahead of a June 5 deadline for Greece to make a €305 million payment to the International Monetary Fund.
The euro continues to drop against the dollar on Tuesday with investors shifting their focus upon Greece, as the leaders of Germany, France and Greece held debt negotiations late Monday in order to reach to a deal ahead of a June 5 deadline for Greece to make a €305 million payment to the International Monetary Fund. For today, the euro zone will be announcing preliminary data on consumer prices, while Spain and Germany will provide data on their latest employment reports. In the U.S. front, a report on factory orders is due later in the day.
Pivot: 1.097
Support: 1.0885; 1.0865; 1.082
Resistance: 1.097; 1.1005, 1.106
Scenario 1: Short positions below 1.097 with targets @ 1.0885 & 1.0865 in extension.
Scenario 2: Above 1.097 look for further upside with 1.1005 & 1.106 as targets.
Comment: As long as 1.097 is resistance, likely decline to 1.0885.
Gold prices posted a sharp increase early on Monday, crossing the $1200 level once again but following the positive manufacturing data from the U.S. prices fell once again to end the day in negative territory. Traders are assessing macroeconomic indicators from the U.S. in order to estimate an approximate timing of the long awaited Federal Reserve rate hike. The Fed wants to see inflation near its targeted goal of 2% during a two-year period before it raises rates for the first time in nearly a decade. For today, markets will be focusing on factory orders data from the U.S.
Pivot: 1192
Support: 1184.5; 1180; 1175
Resistance: 1192; 1197.35, 1204.5
Scenario 1: Short positions below 1192 with targets @ 1184.5 & 1180 in extension.
Scenario 2: Above 1192 look for further upside with 1197.35 & 1204.5 as targets.
Comment: As long as 1192 is resistance, likely decline to 1184.5.
OIL/USD
On Friday, oil services firm Baker Hughes (NYSE:BHI) said the number of oil rigs in the U.S. last week dropped by 13 to 646, the lowest level since August, 2010, causing prices to rise by more than 4%. On Monday, prices edged down as investors locked in profits from Friday's increase. For Tuesday, traders will focus on the upcoming industry data on U.S. inventories. Energy traders are also waiting for a key OPEC meeting in Vienna on Friday for further indications of supply levels in the market.
Pivot: 59.5
Support: 59.5; 58.95; 58.3
Resistance: 60.7; 61.4; 61.7
Scenario 1: Long positions above 59.5 with targets @ 60.7 & 61.4 in extension.
Scenario 2: Below 59.5 look for further downside with 58.95 & 58.3 as targets.
Comment: The RSI is above its neutrality area at 50%.
The main stock indices ended the first day of June with moderate gains as data from the U.S., including ISM Manufacturing and U.S. personal income gave signs of a strengthening economy. The technology sector was the best performer on markets, led by Microsoft (NASDAQ:MSFT) and Altera (NASDAQ:ALTR). Microsoft posted a rise after it announced the release its new operating system, Windows 10, on July 29. In addition, gains were also shown in pharmaceutical and biotech stocks after a wave of positive data at the nation's largest cancer conference over the weekend. For today, the focus will be shifted towards factory orders data from the U.S. while markets will be looking ahead to Friday's employment report.
Pivot: 2067
Support: 2167; 2021; 1972
Resistance: 2135; 2180; 2215
Scenario 1: Long positions above 2067 with targets @ 2135 & 2180 in extension.
Scenario 2: Below 2067 look for further downside with 2021 & 1972 as targets.
Comment: The RSI is mixed with a bullish bias.