Developments in Greece were in the spotlight in the past few days as the IMF said Thursday it was stopping negotiations with Greece due to a lack of progress and as senior European Union officials had formally discussed a possible Greek debt default for the first time. The dollar closed last week in negative territory against most currencies despite signs of improvement in the labor market, in consumer confidence and in producer prices. The University of Michigan's consumer sentiment index rose to 94.6 this month from 90.7 in May while producer prices rose 0.5% in May, the largest increase since September 2012. For this week, investors' attention is shifted towards Greece's next steps to avoid a potential debt default and on Wednesday's Fed rate statement for a clear signal on when it could start to raise interest rates. Monetary policy announcements in Japan and Switzerland will also be closely watched.
The euro ended the week higher against the dollar, despite the fact that a solution for the Greek debt crisis is still far from being achieved, especially without the participation of the IMF in the talks, and with no common ground reached as far as pensions are concerned. On Friday, Greece reportedly submitted a new proposal including debt restructuring, but did not include any pension reforms. The EUR/USD pair received some pressure by U.S. data on Friday, as producer price inflation posted the biggest rise since September 2012 and consumer sentiment rose to 94.6 from 90.7 in May. For today the European Central Bank President Mario Draghi is to testify before the European Parliament's Economic and Monetary Affairs Committee, in Brussels. In the U.S. front, data on industrial production and manufacturing activity in New York is due later in the day.
Pivot: 1.128
Support: 1.1145; 1.1115; 1.108
Resistance: 1.128; 1.1335; 1.1385
Scenario 1: Short positions below 1.128 with targets @ 1.1145 & 1.1115 in extension.
Scenario 2: Above 1.128 look for further upside with 1.1335 & 1.1385 as targets.
Comment: The RSI is badly directed.
Gold prices have been fluctuating between gains and losses, ending last week with little change, pressured by positive employment, wage growth and confidence data by the U.S., but supported by a wave of uncertainty brought to the markets by the Greek debt negotiations, where talks between Greece and its euro zone and IMF creditors do not appear to be leading to a solution, leaving the final decision on whether the country is going to default to euro zone finance ministers. For today, gold traders will be focusing on industrial production and manufacturing activity data from the U.S., with the main focus shifted towards Wednesday's Federal Reserve policy meeting.
Pivot: 1185.4
Support: 1175; 1172; 1169
Resistance: 1185.4; 1188; 1192.5
Scenario 1: Short positions below 1185.4 with targets @ 1175 & 1172 in extension.
Scenario 2: Above 1185.4 look for further upside with 1188 & 1192.5 as targets.
Comment: As long as 1185.4 is resistance, likely decline to 1175.
OIL/USD
Crude oil prices posted a sharp drop on Friday on concerns of increased supply in the market, however, recent weakness in the dollar supported prices pushing them in positive territory for the week. The drop on Friday came amid concerns on higher output by Saudi Arabia after reports that the country had raised output over the past three months in response to stronger global demand. Prices were supported by data on oil rig counts by Baker Hughes (NYSE:BHI) on Friday, where seven oil rigs less were operating last week, pointing to further cutbacks in drilling. Data from the U.S. will remain in focus for the week ahead, and investors will also be looking ahead to Wednesday's Federal Reserve rate statement for a clear signal on when it could start to raise interest rates.
Pivot: 61
Support: 59; 57.85; 57
Resistance: 61; 61.8; 62.7
Scenario 1: Short positions below 61 with targets @ 59 & 57.85 in extension.
Scenario 2: Above 61 look for further upside with 61.8 & 62.7 as targets.
Comment: As long as 61 is resistance, likely decline to 59.
DOW JONES
U.S. stocks fell broadly on Friday, on increasing concerns over a Greek default, one day after the collapse of high-level talks with the IMF. European stocks also entered negative territory, as Germany's DAX, France's CAC 40 and the FTSE 100 closed lower. The Dow Jones Industrial Average fell more than 100 points erasing most of the gains from Wednesday's session when soared it more than 1%. All 30 components on the Dow closed in the red on Friday. The worst performer was Merck & Company Inc (NYSE:MRK). which fell by 1.77%. For this week, investors' attention is shifted towards Greece's next steps to avoid a potential debt default and on Wednesday's Fed rate statement for a clear signal on when it could start to raise interest rates.
Pivot: 17730
Support: 17730; 17360; 17040
Resistance: 18350; 18900; 19230
Scenario 1: Long positions above 17730 with targets @ 18350 & 18900 in extension.
Scenario 2: Below 17730 look for further downside with 17360 & 17040 as targets.
Comment: A support base at 17730 has formed and has allowed for a temporary stabilisation.