Following the positive inflation data from the U.S, the dollar continued to rise against most major currencies ending the week in positive territory. The Core CPI rose 0.3% for the month, its highest gain since January, 2013, and 1.8% on a year-over-year basis. In addition, central bankers from the U.S as well as Europe commented on the short-term outlook of both economies with Janet Yellen saying that an interest rate hike will be appropriate at some point in 2015, if improvements in the U.S. economy continue. European Central Bank president Mario Draghi emphasized the importance of enacting structural reforms with the European economy during a speech in Sintra, Portugal. For this week, markets will be looking for further clues of improvement in the U.S economy ahead of announcements including durable goods orders, house prices, manufacturing, jobless claims and consumer confidence later in the week.
The euro fell sharply against the dollar on Friday from levels close to 1.12 ending the day at 1.1008. Strong inflation data was announced by the U.S. Bureau of Labor Statistics, which said its Core CPI rose 0.3% for the month, its highest gain since January, 2013, and 1.8% on a year-over-year basis. Following the release, ECB president M. Draghi emphasized that reforms are necessary in the region and could positively impact the supply-side of the economy. Hours later, Janet Yellen said that an interest rate hike would be appropriate 2015, if improvements in the U.S. economy continue. For today, markets will be focusing on imports data from Germany while the U.S. market is closed for Memorial Day.
Pivot
1.106
Support
1.095
1.086
1.082
Resistance
1.106
1.115
1.121
Scenario 1: Short positions below 1.106 with targets @ 1.095 & 1.086 in extension.
Scenario 2: Above 1.106 look for further upside with 1.115 & 1.21 as targets.
Comment: As long as resistance at 1,106 is not surpassed, the risk of a break below 1.095 remains high.
Positive inflation data from the U.S together with a rather optimistic from Fed president added pressure on gold prices on Fridat as a Federal Reserve rate hike is expected this. On the other side onf the Atlantic, Greece remains in focus as the country is running out of cash and cannot make debt repayments to the IMF next month unless it achieves a deal with creditors. With U.S. markets closed for Memorial Day investors will be looking up ahead in the week for durable goods orders, house prices, manufacturing, jobless claims and consumer confidence data.
Pivot
1215
Support
1200
1190
1180
Resistance
1215
1227
1237
Scenario 1: Short positions below 1215 with targets @ 1200 & 1190 in extension.
Scenario 2: Above 1215 look for further upside with 1227 & 1237 as targets.
Comment: As long as 1215 is resistance, likely decline to 1200.
OIL/USD
Crude oil prices are trading in positive territory on Monday, supported by strong demand signals in the market. April data surprisingly showed no signs of slowdown in demand despite a pick-up in prices, with Japan crude oil imports rising by 9.1 percent in April from the same month a year earlier, and Chinese crude imports hitting a record 7.4 million barrels per day in April despite a slowing economy, driven largely by healthy car sales. In the U.S, the peak summer driving season officially starts with Memorial Day on Monday, road travel is expected to reach a 10-year high over the weekend, suggesting strong fuel consumption. Prices are also supported by conflicts in Libya, as warplanes from the official government attacked an oil tanker docked outside the city of Sirte.
Pivot
60.4
Support
59.35
58.65
57.9
Resistance
60.4
61
61.45
Scenario 1: Short positions below 60.4 with targets @ 59.35 & 58.65 in extension.
Scenario 2: Above 60.4 look for further upside with 61 & 61.45 as targets.
Comment: As long as 60.4 is resistance, expect a return to 59.35.
S&P 500
U.S. stocks ended the day in red on Friday, after Fed president Janet Yellen hinted that the Federal Reserve could increase interest rates at some point this year if the economy continues to improve. The S&P 500 index finished lower on the session after setting all-time closing records earlier in the week, as nine of 10 sectors closed in the red. Stocks in the Telecommunications, Industrials and Consumer Goods sectors stayed behind, while stocks in the Technology sector led. With U.S. markets closed for Memorial Day investors will be looking up ahead in the week for durable goods orders, house prices, manufacturing, jobless claims and consumer confidence data.
Pivot
2117
Support
2117
2110
2095
Resistance
2138
2149
2156
Scenario 1: Long positions above 2117 with targets @ 2138 & 2149 in extension.
Scenario 2: Below 2117 look for further downside with 2110 & 2095 as targets.
Comment: Eventhough a continuation of the consolidation cannot be ruled out, its extent should be limited.
APPLE
Shares of the tech giant rose by almost 3% this week supported by optimistic talk from investor Carl Icahn that the stock is worth much more than what it is priced today. The stock is trading just below its' all-time high of $134.54 posted on April 28. The stock has been supported earlier in the year on strong first-quarter results, but since then, it retreated on worries of the slower than expected sales of the Watch but still remained stronger from high smartphone sales.
Pivot
129.5
Support
129.5
128
124.8
Resistance
133.1
134.6
136.25
Scenario 1: Long positions above 129.5 with targets @ 133.1 & 134.6 in extension.
Scenario 2: Below 129.5 look for further downside with 128 & 124.8 as targets.
Comment: The RSI is bullish and calls for further upside.