The dollar gained against most major currencies on Monday, as investors continue to focus on the Federal Reserve’s upcoming policy meeting this week. The euro remained under pressure after the European Central Bank cut interest rates across the euro zone to new record lows and boosted its quantitative easing program last Thursday. The Fed is not expected to raise interest rates at the conclusion of its meeting on Wednesday, given recent signs of weakness in the global economy. However, the U.S. central bank is likely to start further rates hikes fairly soon as long as U.S. inflation and jobs continue to strengthen. As expected the Bank of Japan held policy steady, but noted the market volatility has dented confidence and the price views of consumers and business. The BoJ is hoping to keep interest rates as low as possible in order to assist the government, by making public sector debt more affordable. For today, the U.S. is to publish reports on retail sales, producer prices and manufacturing activity in the New York region.
The euro continued to drop from three-week highs against the dollar, as market players await for the Federal Reserve’s meeting later this week. The currency pair traded between 1.1078 and 1.1153 in Monday's session, before settling 0.45% lower for the day. In tomorrow’s meeting, the Fed is also expected to leave short-term interest rates steady, however, the U.S. central bank could provide further clues on its pace of future rate hikes in its first tightening cycle in a decade. For today, the U.S. is to publish reports on retail sales, producer prices and manufacturing activity in the New York region.
Pivot: 1.108Support: 1.108 1.103 1.0985Resistance: 1.1165 1.122 1.1295Scenario 1: long positions above 1.1080 with targets @ 1.1165 & 1.1220 in extension.Scenario 2: below 1.1080 look for further downside with 1.1030 & 1.0985 as targets.Comment: the RSI has just landed on its neutrality area at 50% and is turning up.
Gold
Gold prices fell sharply on Monday extending losses from last week, as investors await for Wednesday’s FOMC meeting for further clues on the Fed’s monetary policy and rate hike calendar. The U.S. economy has shown signs of improvement since the FOMC's last meeting. In February, NFP showed a rise by 242,000, considerably above estimates of 190,000. A month earlier, the Core PCE Index, the Fed's preferred index on inflation, rose by 1.7% on an annual basis, its strongest annual gain in more than a year. For today, gold traders will be focusing on U.S. reports on retail sales, producer prices and manufacturing activity in the New York region.
Pivot: 1238Support: 1219.5 1215 1211Resistance: 1238 1248 1259Scenario 1: short positions below 1238.00 with targets @ 1219.50 & 1215.00 in extension.Scenario 2: above 1238.00 look for further upside with 1248.00 & 1259.00 as targets.Comment: the RSI is mixed with a bearish bias.
WTI Oil
Crude oil prices fell from three-month highs on Monday, after Russia supported Iran's refusal to align with other major producers in an effort to reduce output, placing a potential OPEC-Non OPEC production cut at risk. Following a meeting with Iranian oil minister Bijan Zanganeh and energy minister Hamid Chitchian on Monday, Russia counterpart Alexander Novak confirmed Iran’s intentions to continue increasing output before agreeing to any production freeze until its production reaches pre-sanction levels of approximately 4 million barrels per day. Bloomberg reported that the highly-anticipated meeting between Russia, Saudi Arabia and other top oil producers aimed at stabilizing oil prices, which was scheduled to be held on March 20 could now be delayed until next month. For today, weekly inventory levels by the American Petroleum Institute will be in focus.
Pivot: 37.8Support: 36.55 36.05 35.33Resistance: 37.8 38.22 38.9Scenario 1: short positions below 37.80 with targets @ 36.55 & 36.05 in extension.Scenario 2: above 37.80 look for further upside with 38.22 & 38.90 as targets.Comment: the RSI advocates for further downside.
US 500
The main U.S. indexes closed slightly changed on Monday, in a light trading session, as consumer gains countered losses in energy shares and investors remained inactive ahead of a U.S. Federal Reserve meeting. The Fed is not expected to raise interest rates at the two-day meeting, which begins on Tuesday, but investors will be on the lookout for clues about future hikes. The S&P 500 is now down about 1 percent in 2016, after having been down as much as 10.5 percent in mid-February. The S&P 500 lost 2.55 points, or 0.13 percent with seven of the 10 major S&P sectors were lower. As they await for the release of economic data, including U.S. retail sales, investors are still digesting the latest move of the European Central Bank.
Pivot: 1930 Support: 1930 1890 1810 Resistance: 2043 2080 2100 Scenario 1: long positions above 1930.00 with targets @ 2043.00 & 2080.00 in extension. Scenario 2: below 1930.00 look for further downside with 1890.00 & 1810.00 as targets. Comment: the RSI is bullish and calls for further upside. Prices have confirmed a double-bottom pattern. The 20-day simple moving average has turned up and now plays a support role.