The dollar recovered slightly from losses against other major currencies on Tuesday, as the release of upbeat U.S. data boosted optimism over the strength of the economy, lending support to the greenback. The Conference Board said its index of consumer confidence rose to 98.0 this month from a reading of 92.4. The report came after the third estimate of first quarter U.S. growth domestic product showed growth of 1.1%, revised up from the initial reading of a 0.8% rise. Analysts had expected growth to settle at 1.0%. Global stock markets suffered the largest two-day drop ever, as a wave of selling wiped around $3 trillion from markets. Ratings agencies Standard & Poor’s and Fitch Ratings both downgraded their credit ratings for the U.K. on Monday and warned that further cuts are possible. S&P, the only major ratings agency to maintain a Triple A rating for the U.K., cut its rating by two notches to AA, warning that Brexit posed a risk to the constitutional and economic integrity of the U.K. For today, in the euro zone, Germany and Spain are to produce initial estimates on consumer inflation. The U.K. is to release data on net lending. The U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal. Investors also turn their attention to a closely-watched two-day EU Summit in Brussels for clearer indications on the timing of Britain's exit from the European bloc.
Despite a slight recovery in the dollar, the euro moved higher on Tuesday with top leaders from throughout the euro area appear to be adopting a hard-line stance against the U.K rejecting a proposal which would enable Britain to receive access to the European single market. In the U.S., the release of better than expected first-quarter U.S. economic growth data helped boost demand for riskier assets even though real consumer spending for the first three months of the year was revised down. For today, in the euro zone, Germany and Spain are to produce initial estimates on consumer inflation, the U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal.
Pivot: 1.111Support: 1.101 1.097 1.09Resistance: 1.111 1.1185 1.13Scenario 1: short positions below 1.1110 with targets @ 1.1010 & 1.0970 in extension.Scenario 2: above 1.1110 look for further upside with 1.1185 & 1.1300 as targets.Comment: the upward potential is likely to be limited by the resistance at 1.1110.
Gold
Gold fell slightly on Tuesday taking a pause from the Brexit-inspired rally, as investors looked to lock into profits days after the precious metal surged to 27-month highs. In the days since last week's surprising vote for the U.K. to depart from the EU, gold demand has been largely supported together with the Japanese Yen and the Swiss Franc, as traders continue to seek shelter in safe-haven assets. Meanwhile, top leaders from throughout the euro area appear to be adopting a hard-line stance against the U.K rejecting a proposal which would enable Britain to receive access to the European single market. For today, the U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal.
Pivot: 1323.5Support: 1305 1294 1272Resistance: 1323 1345 1359Scenario 1: short positions below 1323.50 with targets @ 1305.00 & 1294.00 in extension.Scenario 2: above 1323.50 look for further upside with 1345.00 & 1359.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1323.50.
WTI Oil
U.S. crude oil prices halted a three-day drop on Tuesday, amid an easing dollar, as threats of a worker strike in Norway offset continuing fears of a potential recession throughout the euro area in the wake of last week's historic Brexit referendum. Prices were also supported after industry estimates showed a drop in U.S. crude stockpiles. The American Petroleum Institute reported that U.S. crude supplies fell by 3.9 million barrels for the week ended June 24, according to sources. Later on Wednesday more closely watched data on crude and refined products will be released by the U.S. Department of Energy.
Pivot: 46.82Support: 46.82 45.9 45.1Resistance: 49.1 50 50.56Scenario 1: long positions above 46.82 with targets @ 49.10 & 50.00 in extension.Scenario 2: below 46.82 look for further downside with 45.90 & 45.10 as targets.Comment: below 46.82 look for further downside with 45.90 & 45.10 as targets.
US 500
U.S. stocks rallied sharply on Tuesday completing their strongest one-day move in four months, as investors capitalized on a number of bargain opportunities made possible from the Brexit-inspired global market crash. The Dow Jones rose 1.57% while the NASDAQ gained 2.12% with shares in Facebook Inc (NASDAQ:FB) and Netflix Inc (NASDAQ:NFLX) each surged by more than 3%, while Amazon.com Inc (NASDAQ:AMZN) shares rose by 2.4%The S&P 500 added 1.78%, as all 10 sectors closed in the green. Stocks in the Energy, Financials and Health Care industries led, each gaining more than 2% on the session. For today, the U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal. Investors also turn their attention to a closely-watched two-day EU Summit in Brussels for clearer indications on the timing of Britain's exit from the European bloc.
Pivot: 2075 Support: 1992 1970 1950 Resistance: 2075 2130 2190 Scenario 1: short positions below 2075.00 with targets @ 1992.00 & 1970.00 in extension. Scenario 2: above 2075.00 look for further upside with 2130.00 & 2190.00 as targets. Comment: the RSI is bearish and calls for further downside.