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iFOREX Daily Analysis : October 10 ,2017

Published 10/10/2017, 04:52 AM
Updated 09/16/2019, 09:25 AM
EUR/USD
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DJI
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GS
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WMT
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IBM
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GE
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CL
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NKE
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BTC/USD
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ETH/USD
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The dollar remains near 10-week highs against most currencies on Monday, as hopes for a December rate hike by the Federal Reserve continued to provide support. However, the dollar was under pressure last week by a report that North Korea is preparing a long-range missile test. Pyongyang celebrates the founding of its ruling party on Tuesday, and there are concerns that there will be some sort of provocation.

The pound gained by almost 0.1 percent to $1.3157, recovering overnight from a one-month low of $1.3027 as news of rising labor costs hardened expectations of higher interest rates

The euro advanced following data showing German industrial output notched its biggest monthly increase in more than six years in August. A call from Sabine Lautenschlaeger, a member of the European Central Bank executive board, for the ECB to roll back asset purchases in 2018 also lifted the common currency.

Crude oil prices settled higher on Monday after oil production platforms in the Gulf of Mexican began returning to service as Storm Nate had little impact on oil infrastructure while bullish comments from Opec lifted sentiment.

Cryptocurrencies have put up a very impressive last few days with Bitcoin breaking above $4600 and Ethereum fighting hard to hold at $300. One of the main reasons for the rally is likely due to the upcoming hard fork in Bitcoin that's happening on October 25th.

For Tuesday, the UK is to publish reports on manufacturing production and the trade balance, Canada is to report on building permits and Minneapolis Fed President Neel Kashkari is due to speak later in the day. For the week ahead, Fed is to publish the minutes of its latest policy meeting which could be the news that sets direction for the markets in the coming days.

EUR/USD

The euro continues to gain ground against the dollar on Monday, following Friday’s extremely weak employment data coming from the US, as data from Germany continue to support the single currency with German industrial output reaching its biggest monthly increase in more than six years in August.

On Tuesday, a speech from Minneapolis Fed President Neel Kashkari will be in the spotlight ahead of the Fed minutes on Wednesday.

EUR/USD Chart


Pivot: 1.1735
Support: 1.1735 1.172 1.17
Resistance: 1.18 1.1825 1.186

Scenario 1: long positions above 1.1735 with targets at 1.1800 & 1.1825 in extension.
Scenario 2: below 1.1735 look for further downside with 1.1720 & 1.1700 as targets.
Comment: the RSI shows upside momentum.

Gold

Gold prices gained on Monday supported by weakness in the dollar as geopolitical uncertainty increased demand for safe-haven gold but growing expectations that the Federal Reserve will hikes rates for the third time this year still adds pressure on the market.

Further support came from physical demand in India during the festival season and the other top importer China as markets gear up after a week-long holiday last week.

The minutes of the last Fed meeting will be in the spotlight for gold traders in order to assess whether yesterday’s rise is the start of a trend reversal.

Gold Chart

Pivot: 1282
Support: 1282 1279 1275
Resistance: 1290 1295 1300

Scenario 1: long positions above 1282.00 with targets at 1290.00 & 1295.00 in extension.
Scenario 2: below 1282.00 look for further downside with 1279.00 & 1275.00 as targets.
Comment: the RSI shows upside momentum.

WTI Oil

WTI oil prices were almost unchanged on Monday, with OPEC and other producers are looking to create an extension to their deal to cut production ahead of the official November meeting of the cartel. Those cuts are currently set to expire in March.

OPEC pointing to a rebalancing market even as the U.S. looked forward to getting production back following Hurricane Nate.

Markets will focusing on the development of the storm as well as the oil inventories published by the American Petroleum Institute (API) on Tuesday and Energy Information Agency (EIA) on Wednesday.

WTI Oil Chart


Pivot: 50
Support: 49.12 48.85 48.37
Resistance: 50 50.5 50.76

Scenario 1: short positions below 50.00 with targets at 49.12 & 48.85 in extension.
Scenario 2: above 50.00 look for further upside with 50.50 & 50.76 as targets.
Comment: the RSI lacks upward momentum. The key horizontal resistance at 50.00 maintains the strong selling pressure on the prices. Below this threshold, likely decline to 49.12 (the previous swing low) at first.

US 500

The main US indices were lower after on Monday, as losses in the Healthcare, Consumer Services and Consumer Goods sectors led shares lower.

Some of the best performers of the session on the Dow Jones Industrial Average were Wal-Mart Stores Inc (NYSE:WMT) which rose 1.94% while International Business Machines (NYSE:IBM) was up 0.62%.

Some of the worst performers of the session were General Electric Company (NYSE:GE) which fell 3.94%, Nike Inc (NYSE:NKE) that declined 1.72% and Goldman Sachs Group Inc (NYSE:GS) that was down 1.31%.

In terms of fundamental economic data the focus will be on Wednesday’s minutes of the Fed’s last meeting for clues on whether the bad employment data from the U.S. will affect the banks decision to hike rates one more time this year.

US 500 Chart


Pivot: 2537
Support: 2537 2533 2526
Resistance: 2550.5 2558 2565

Scenario 1: long positions above 2537.00 with targets at 2550.50 & 2558.00 in extension.
Scenario 2: below 2537.00 look for further downside with 2533.00 & 2526.00 as targets.
Comment: the RSI is bullish and calls for further upside. The prices managed to hold above the horizontal support at 2537, and are likely to challenge the previous high at 2550.50.

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