On Monday, the dollar posted a sharp recovery against most major currencies with no significant releases announced and as trading volumes were low. The dollar found some room for a rebound as investors remain on the sidelines waiting for Wednesday's Federal Reserve minutes for any possible hints on the timing of a rate increase and on Friday's data on U.S. inflation. Elsewhere, the euro zone is to release data on private sector activity and China is to publish preliminary data on manufacturing activity. Greece came close to defaulting on a €750 million IMF repayment, which it managed to gather from emergency reserves in its holding account at the IMF. Over the weekend, a leaked memo from the International Monetary Fund showed that there is "no possibility" that Athens can meet a loan repayment due on June 5 without unlocking bailout funds.
The euro posted a sharp drop against the dollar, as Greek bond prices fell on renewed worries that the country will be exiting the European Union and will fail to repay its debt. Greece appears to be running out of funds after repaying 750 million euros to the IMF, however the Greek PM stated that he would prefer to default on its debt to the IMF, than fail to meet salary and pension payments to Greek municipal workers. Investors' attention is also shifted towards the Fed minutes this Wednesday as they look for clues on the future monetary policy of the Fed. For today the ZEW Institute is to report on German economic sentiment while in the U.S., data on building permits and housing starts are due later in the day.
Pivot
1.1365
Support
1.126
1.1195
1.113
Resistance
1.1365
1.142
1.147
Scenario 1: Short positions below 1.1365 with targets @ 1.126 & 1.1195 in extension.
Scenario 2: Above 1.1365 look for further upside with 1.142 & 1.147 as targets.
Comment: The RSI is badly directed.
Supported by the consecutive weak economic indicators from the U.S, the recent weakness in the dollar and uncertainty related to the Greek debt and the possibility of a Greek Default, gold prices soared last week reaching three month highs. Comments by Greek finance minister that he would prefer to default on its obligations to the IMF, than not to meet salary and pension payments to Greek municipal workers add further support on prices. On Monday, prices fell as investors remained on the sidelines, with the continued focus on Wednesday's Fed minutes and Friday's inflation data for any new hints on the timing of a rate hike by the Federal Reserve.
Pivot
1233
Support
1210
1200
1191
Resistance
1233
1245
1255
Scenario 1: Short positions below 1233 with targets @ 1210 & 1200 in extension.
Scenario 2: Above 1233 look for further upside with 1245 & 1255 as targets.
Comment: As long as 1233 is resistance, likely decline to 1210.
OIL/USD
Oil prices fell on Monday as the dollar recovered and as concerns of growing supplies weighed on the market after Saudi Arabia reported its highest crude exports in nearly a decade. However, Saudi-led airstrikes resumed in Yemen after a five-day cease fire last week providing some support on prices. Elsewhere, prices were supported as approximately 3,000 milita fighters in Iraq mobilized at a site near Ramadi, after the Western Iraqi city was taken over by the Islamic State over the weekend. For today, oil traders will be focusing on the American Petroleum Institute inventory data, while on Wednesday, the U.S. Department of Energy reports its own more-closely watched data.
Pivot
60.85
Support
59
58.4
57.8
Resistance
60.85
61.5
61.85
Scenario 1: Short positions below 60.85 with targets @ 59 & 58.4 in extension.
Scenario 2: Above 60.85 look for further upside with 61.5 & 61.85 as targets.
Comment: As long as 60.85 is resistance, likely decline to 59.
DOW JONES
The Dow Jones Industrial Average together with the S&P 500 both reached all-time highs yesterday, after comments by Federal Reserve Bank of Chicago president Charles Evans raised speculation that the Federal Reserve could delay a much-anticipated interest rate hike. C. Evans reiterated on Monday that he doesn't recommend raising rates until the start of 2016 even if the Fed will consider it if the economy is trending upward .The Fed's point of view on the economy will be the highlight of this week at the release of the minutes from the board's April meeting.
Pivot
17730
Support
17730
17360
17040
Resistance
18900
19230
19500
Scenario 1: Long positions above 17730 with targets @ 18900 & 19230 in extension.
Scenario 2: Below 17730 look for further downside with 17360 & 17040 as targets.
Comment: The RSI broke above a bearish trend line.
APPLE
Apple (NASDAQ:AAPL) stock rose by approximately 1.25% to 130.38 after billionaire activist investor Carl Icahn said on Monday that the tech giant is dramatically undervalued at its current level. Setting a new target level at $240 a share, Icahn said on Monday that Apple should be priced with $12 Earnings Per Share by 2016. Apple was the second best performer on the Dow, just behind Intel Corporation (NASDAQ:INTC) which rose by 1.27%.
Pivot
127.7
Support
127.7
124.8
123.4
Resistance
131.6
133.1
134.6
Scenario 1: Long positions above 127.7 with targets @ 131.6 & 133.1 in extension.
Scenario 2: Below 127.7 look for further downside with 124.8 & 123.4 as targets.
Comment: The RSI is bullish and calls for further advance.