The dollar fell lower against the other major currencies on Monday, as investors remained cautious amid ongoing uncertainty over the global effects of the Brexit vote. The sterling remained close to the 31-year low of 1.3122 set on June 27, a level not seen since 1985. Adding to pressure on the U.K. currency, Bank of England Governor Mark Carney indicated late last week that more stimulus may be needed over the summer, fuelling expectations for an upcoming rate cut. Research firm Markit and the Chartered Institute of Purchasing & Supply said on Monday that their U.K. construction purchasing managers' index fell to 46.0 in June when analysts had expected the index to drop to 50.5 in June. In China, the Caixin services PMI for June came in at 52.7, better than the level seen at 52.3, and up from 51.2 the previous month. The Reserve Bank of Australia's cash rate held steady at 1.75% following the board meeting Tuesday, noting financial market volatility. For today, the U.K. is to release data on service sector activity, while the Bank of England will publish its financial stability report. BoE Governor Mark Carney will hold a press conference shortly after the release of the report. The U.S. is to produce data on factory orders, while New York Fed President William Dudley will speak at an event in New York.
Despite downside pressures on the euro following the Brexit vote, the single currency managed to gain ground against the dollar in thin trading volume on Monday during Independence Day holiday. The pair printed a fresh daily high at 1.1155 and it was trading around 1.1150, less than 30 pips above Friday’s closing price. Investors remain cautious amid ongoing uncertainty over the global effects of the Brexit vote. Earlier Monday, data showed that the number of unemployed people in Spain declined by 124,300 in June, blowing past expectations for a 74,300 fall and after a 119,800 drop the previous month. For today, the Bank of England will publish its financial stability report while the U.S. is to produce data on factory orders, and New York Fed President William Dudley will speak at an event in New York.
Pivot:1.112Support:1.1121.111.1075Resistance:1.11651.1191.122Scenario 1:long positions above 1.1120 with targets @ 1.1165 & 1.1190 in extension.Scenario 2:below 1.1120 look for further downside with 1.1100 & 1.1075 as targets.Comment:a support base at 1.1120 has formed and has allowed for a temporary stabilisation.
Gold
Gold surged to the highest level in more than two years after markets shifted towards safe haven assets following Britain’s vote to leave the European Union after a historic poll. On Monday, gold prices continued last week's gains reaching levels not seen since July 2014. Gold has been well-supported in recent sessions amid fading expectations of a Federal Reserve rate hike in the next couple of months and as investors continued to digest the political and economic aftermath of the U.K.’s decision to leave the European Union. Market players will now be shifting their attention away from Brexit-related headlines and more towards U.S. monetary policy, with the June nonfarm payrolls report and FOMC meeting minutes in the spotlight.
Pivot:1335Support:133513281320.5Resistance:135413591364Scenario 1:long positions above 1335.00 with targets @ 1354.00 & 1359.00 in extension.Scenario 2:below 1335.00 look for further downside with 1328.00 & 1320.50 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
WTI Oil
Oil prices fluctuated between small gains and losses on Monday, as market players monitored supply disruptions across the world for further indications on the direction of the market. The Niger Delta Avengers militant group has claimed responsibility for five new attacks on Nigeria's oil infrastructure over the weekend, dealing a blow to the government’s effort to enforce a cease-fire. Volumes were low, as U.S. stock markets are closed for the Independence Day holiday. Later Tuesday, the American Petroleum Institute will release its estimates of crude and refined product inventories of last week.
Pivot:48.83Support:47.947.446.8Resistance:48.8349.3550Scenario 1:short positions below 48.83 with targets @ 47.90 & 47.40 in extension.Scenario 2:above 48.83 look for further upside with 49.35 & 50.00 as targets.Comment:the RSI has broken down its 30 level.
Italy 40
Italy stocks were lower on Monday, as losses in the Financials, Technology and Oil & Gas sectors led shares lower. At the close in Milan, Italy 40 fell 1.49%. The best performer of the session was Saipem which rose 3.38%. Meanwhile, Salvatore Ferragamo added 1.20% and A2A was up 0.93%. The worst performers of the session were Banca Monte dei Paschi di Siena which fell 13.99%, Banca Pop Emilia Romagna declined 6.73% and Mediaset was down 4.56%. Falling stocks outnumbered advancing ones on the Milan Stock Exchange by 260 to 122 and 29 ended unchanged.
Pivot: 15805 Support: 15805 15260 14815 Resistance: 16470 16820 17175 Scenario 1: long positions above 15805.00 with targets @ 16470.00 & 16820.00 in extension. Scenario 2: below 15805.00 look for further downside with 15260.00 & 14815.00 as targets. Comment: the RSI lacks downward momentum.