Τhe dollar remained broadly lower against most major currencies on Monday, as investors stayed on the side lines after major oil producers failed to reach an agreement to cut output and as Friday’s weak U.S. data continued to add pressure. A meeting of the world’s major oil producers in Doha, Qatar on Sunday ended without an agreement on curbing production intended to support prices.The talks collapsed after Saudi Arabia demanded that Iran also joins the agreement to curb output. Iran had already declined to take parts in the talks and said it would not participate in an output freeze until its output levels return to where they were before international sanctions were imposed over its nuclear program. The dollar remained under pressure after reports showing that U.S. industrial production fell more than expected in March and consumer sentiment fell slightly this month. The Reserve Bank of Australia repeated that continued mild inflation gives room for easing in the Tuesday minutes from its April board meeting on policy. For today, in the euro zone, the ZEW Institute is to report on German economic sentiment. The U.S. is to release reports on building permits and housing starts while Bank of England Governor Mark Carney is to testify before the economic affairs committee in London.
The euro posted a small rise against the dollar on Monday, as investors awaited comments from top central bankers on both continents for further signs of potential divergence before the next round of interest rate decisions later this month. The currency pair traded in a tight range between 1.1274 and 1.1332, before settling 0.13% higher on the session. The failure of major producers to achieve any progress in curbing supply revives industry fears that oil prices will remain persistently low, and adds pressure on the dollar. Currency traders await remarks from European Central Bank president Mario Draghi on Wednesday in Frankfurt for further hints on potential easing measures, in an effort to stave off deflation throughout the euro zone. For today, in the euro zone, the ZEW Institute is to report on German economic sentiment. The U.S. is to release reports on building permits and housing starts
Pivot: 1.127Support: 1.127 1.1245 1.1215Resistance: 1.1345 1.137 1.14Scenario 1: long positions above 1.1270 with targets @ 1.1345 & 1.1370 in extension.Scenario 2: below 1.1270 look for further downside with 1.1245 & 1.1215 as targets.Comment: the RSI is well directed.
Gold
Gold prices fell on Monday in quiet trading session, despite a broadly lower dollar, as investors reacted to news in the global energy markets that a highly-anticipated meeting in Qatar ended without the expected production freeze. Gold has posted an extremely volatile week with moves of at least 1% in its latest sessions, due primarily to strong indications of improving economic growth in China and the rest of the world. Despite the recent downturn, the precious metal is still up by more than 16% since the start of the year. For today, gold traders will be focusing on U.S. reports on building permits and housing starts.
Pivot: 1236Support: 1224 1220 1214Resistance: 1236 1241 1247.5Scenario 1: short positions below 1236.00 with targets @ 1224.00 & 1220.00 in extension.Scenario 2: above 1236.00 look for further upside with 1241.00 & 1247.50 as targets.Comment: the upward potential is likely to be limited by the resistance at 1236.00.
WTI Oil
Oil prices are retreating on Tuesday due to a persistent global glut and the failure of a producer meeting at the weekend to tackle the market oversupply, although a sharp drop in output in Kuwait due to an oil worker strike supported prices briefly. Overnight, crude oil prices posted a sharp recovery on Monday, paring most of their losses from a recent sell-off, as investors already digested the bearish news on the latest OPEC and non-OPEC producers meeting. Later on Tuesday, the American Petroleum Institute will release its figures on crude oil inventories for last week followed on Wednesday by more closely-watched figures from the U.S. Department of Energy.
Pivot: 38.44Support: 38.44 37.6 36.8Resistance: 40.8 41.73 42.42Scenario 1: long positions above 38.44 with targets @ 40.80 & 41.73 in extension.Scenario 2: below 38.44 look for further downside with 37.60 & 36.80 as targets.Comment: the RSI is mixed with a bullish bias.
US 500
U.S. stocks rose sharply on Monday, with the Dow Jones Industrial Average reaching 18,000 for the first time since late-July, following an unexpected recovery in oil prices and strong upward moves by Walt Disney Company (NYSE:DIS) and Hasbro Inc (NASDAQ:HAS). The major indices quickly erased losses in Monday's session after crude oil prices recovered 5% of the losses from overnight trading in the Asian session. The Dow added 0.60% while the S&P 500 gained 0.65%, as both indices reached fresh 2016-yearly highs. On the S&P 500, all 10 sectors closed in the green as stocks in the Energy, Health Care and Financials industries leading the rise. Today, investors will be focusing on U.S. reports on building permits and housing starts.
Pivot: 2020 Support: 2020 1970 1950 Resistance: 2080 2100 2130 Scenario 1: long positions above 2020.00 with targets @ 2100.00 & 2115.00 in extension. Scenario 2: below 2020.00 look for further downside with 1970.00 & 1950.00 as targets. Comment: investors have to remain cautious since these levels may trigger profit taking.