The dollar turned broadly higher against the euro and a basket of other major currencies on Tuesday, after upbeat U.S. consumer price inflation and new home sales data fuelled fresh optimism over the strength of the economy. The uptick in underlying inflation indicated that the Fed would still have leeway to tighten monetary policy even with inflation running below target. Today investors will focus on: German Ifo Business Climate and BBA Mortgage Approvals, released in the eurozone; while on Core Durable Goods Orders and Crude Oil Inventories from the US, plus two speeches will be carefully watched: FOMC Member Evans and Gov Council Member Lane, in order to gain more indications on the economy' situation.
The euro strengthened against the dollar on Tuesday morning, rising above the 1.10 level after data showing the economic recovery in the euro area gained traction last month, with private sector activity expanding at a faster-than-expected rate.
But during the afternoon the euro slid to session lows against the dollar, after data showing an uptick in U.S. underlying inflation and a strong increase in new home sales bolstered the outlook for higher U.S. interest rates.
But there is still hope for the EU, infact the Euro zone businesses ramped up activity this month, just as the ECB starts printing money to spur growth and inflation, while a slowdown among Chinese factories has fueled calls for more stimulus there.
Today investors will focus on German Ifo Business Climate and BBA Mortgage Approvals, released in the eurozone, while on Core Durable Goods Orders and Crude Oil Inventories from the US.
Pivot
1.087
Support
1.087
1.0815
1.075
Resistance
1.098
1.104
1.109
Scenario 1: Long positions above 1.087 with targets @ 1.098 & 1.104 in extension.
Scenario 2: Below 1.087 look for further downside with 1.0815 & 1.075 as targets.
Comment: The pair is facing a pull back on its support.
Tuesday gold posted its fifth consecutive daily gain, as consumer prices in the U.S. for February rebounded from the previous month.
Gold prices have rallied since the middle of last week following relatively dovish comments from Federal Reserve chair Janet Yellen halted the dollar's steep appreciation against the euro. Despite offering indications that the Fed will likely increase interest rates at some point this year, Yellen said the Fed will take a "data-driven" approach on the timing of its first interest rate hike since 2009.
But gold prices ticked down in Asia early Wednesday in a light regional data day.
Today investors will focus on Core Durable Goods Orders and Crude Oil Inventories; while tomorrow all the eyes will be on the Unemployment Claims, in order to gain more indications on the US economy situation.
Pivot
1185
Support
1185
1178.5
1169
Resistance
1200.8
1209.6
1218
Scenario 1: Long positions above 1185 with targets @ 1200.8 & 1209.6 in extension.
Scenario 2: Below 1185 look for further downside with 1178.5 & 1169 as targets.
Comment: A support base at 1185 has formed and has allowed for a temporary stabilisation.
OIL/USD
Crude oil prices rose in Asia on Wednesday after industry data on U.S. stocks showed sharp drops in distillate and gasoline supplies.
The American Petroleum Institute said that crude oil supplies rose 4.8 million barrels last week, while distillate stocks eased 641,000 barrels and gasoline supplies fell 2.6 million barrels.
During an extremely volatile month of March, analysts have viewed the strength of the dollar as one of the main indicators of the fluctuations in oil prices. In recent days, energy traders have used a weaker dollar to hedge their positions in crude oil.
Today investors await for the weekly inventory report from the Energy Information Administration (EIA).
Pivot
46
Support
46
44.8
44
Resistance
48.9
49.5
50.8
Scenario 1: Long positions above 46 with targets @ 48.9 & 49.5 in extension.
Scenario 2: Below 46 look for further downside with 44.8 & 44 as targets.
Comment: The RSI is mixed.
DOW/USD
U.S. stocks fell for a second straight session on Tuesday, with equities maintaining a tight range that corresponded with currency fluctuations, as traders focused on the dollar's strength and its possible effect on corporate earnings.
Data from home sales to inflation and manufacturing indicated the U.S. economy remains strong, but failed to alter expectations of a faster or steeper monetary policy tightening path at the Federal Reserve.
Traders have honed in on how the Fed will react to economic data, as a June interest rate increase remains a possibility. Stocks have been inversely correlated to the U.S. dollar and several multinational companies have given earnings forecasts that cited a negative impact from a strong greenback.
The Dow Jones industrial average fell 104.9 points, or 0.58%.
Pivot
17620
Support
17620
17040
16330
Resistance
18290
18900
19200
Scenario 1: Long positions above 17620 with targets @ 18290 & 18900 in extension.
Scenario 2: Below 17620 look for further downside with 17040 & 16330 as targets.
Comment: The RSI is above its neutrality area at 50%.
GOOGL
Google Inc (NASDAQ:GOOGL) hired Morgan Stanley (NYSE:MS) Chief Financial Officer Ruth Porat as its own finance chief, a sign Google is aiming to rein in costs as it invests in new businesses such as self-driving cars and internet-connected eyeglasses.
Porat has helped execute a sweeping cost-cutting strategy across several business lines at Morgan Stanley.
Google's costs have jumped as the company embarked on an increasing number of ambitious projects. Last year, the company's revenue grew 19 percent, while total expenses rose 23.4 percent, a trend that alarmed some analysts.
Google's shares rose as much as 2.5 percent on Tuesday after Porat's appointment was announced by both companies. She will start her new job on May 26.
Pivot
571
Support
550
543
530
Resistance
571
583.2
590.5
Scenario 1: Short positions below 571 with targets @ 550 & 543 in extension.
Scenario 2: Above 571 look for further upside with 583.2 & 590.5 as targets.
Comment: As long as 571 is resistance, look for choppy price action with a bearish bias.