The dollar pushed higher to hit a fresh two-month peak against the other major currencies on Tuesday, after data showed that U.S. new home sales rose far more than expected in April, added to expectations for a June rate hike by the Federal Reserve.
The U.S. Commerce Department said new home sales rose by 16.6% to 619,000 units last month, compared to expectations for a 2.0% increase. The data came after St. Louis Fed President James Bullard said Monday that more factors favored a gradual rate increase versus keeping them steady. Separately, San Francisco Fed President John Williams said he still sees the central bank raising interest rates two to three times this year.
Elsewhere, sterling gained ground after the latest ORB poll, published in Tuesday's Telegraph newspaper, showed that the “Remain’ campaign has a 13-point lead over the ‘Leave’ campaign ahead of the June 23 referendum on Britain’s European Union membership. Support for remaining in the EU stood at 55%, while support for Brexit was at 42%. Meanwhile, the U.K. Office for National Statistics said public sector net borrowing came in at 7.2 billion in April, down 4.4% from a year earlier, while economists had forecast a shortfall of 6.6 billion.
Today the Ifo Institute is to publish data on German business climate; the U.S. is release data on the goods trade balance as well as a weekly report on oil stockpiles; meanwhile, Philadelphia Fed's Harker, Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan are due to speak; while the Bank of Canada is to announce its benchmark interest rate and publish its rate statement.
EUR/USDThe euro fell to fresh 1-month lows on Tuesday, as vigorous new home data in the U.S. augmented the dollar, raising the likelihood that the Federal Reserve could approve its first interest rate hike of the year at its next meeting in mid-June.
The currency pair traded in a tight range between 1.1139 and 1.1226, before settling down 0.70% for the session.
The single currency also weakened after the ZEW Centre for Economic Research said its index of German economic sentiment declined to 6.4 this month, from April’s reading of 11.2, while analysts had expected the index to rise to 12.0 in May. Furthermore the index of euro zone economic sentiment dropped to 16.8 in May, from 21.5 a month earlier, missing forecasts for 23.4.
Today investors will focus on the data on German business climate, released by the Ifo Institute.
Pivot: 1.119Support: 1.112 1.108 1.1055Resistance: 1.119 1.123 1.126Scenario 1: short positions below 1.1190 with targets @ 1.1120 & 1.1080 in extension.Scenario 2: above 1.1190 look for further upside with 1.1230 & 1.1260 as targets.Comment: as long as the resistance at 1.1190 is not surpassed, the risk of the break below 1.1120 remains high.
Gold fell sharply on Tuesday, dropping to fresh 1-month lows, as robust new home data in the U.S. lifted the dollar and a closely-watched survey on declining sentiment toward a potential Brexit weighed on the precious metal.
Gold traded between $1,228.00 and $1,252.60 an ounce before settling at down $22.65 or 1.81% on the session.
Gold extended Monday's losses after the U.S. Commerce Department said that new home sales in April soared 16.6% to a seasonally adjusted annual rate of 619,000, the highest monthly gain in nearly 25 years.
Today gold traders will focus on U.S. data on the goods trade balance, as well as on the speeches from Philadelphia Fed's Harker, Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan, to gain more information on the strength of the greenback.
Pivot: 1242.5Support: 1223 1218 1210Resistance: 1242.5 1248 1256Scenario 1: short positions below 1242.50 with targets @ 1223.00 & 1218.00 in extension.Scenario 2: above 1242.50 look for further upside with 1248.00 & 1256.00 as targets.Comment: the RSI is capped by a declining trend line.
WTI Oil
Crude prices rose considerably on Tuesday, remaining near 6-month highs, as Iraq's OPEC governor expressed concerns regarding the nation's slowing output, helping ease supply levels from near-record highs.
In London, Iraq OPEC governor Falah Alamri indicated that production nationwide is hovering around 4.5 million barrels per day, amid slowing output due primarily to poor weather, maintenance issues and numerous power outages. In addition, Alamri said Iraqi production has been dented by a halt in production among several oil fields in the northern Kirkuk region, responsible for pumping 170,000 bpd. Separately, Iraq minister of industry and minerals Mohammed al Daraji said at the same conference that it needs the price of oil to increase to around $65 a barrel in order to plug the requisite budgetary gaps.
Today oil traders will be focusing on U.S. stockpile data for fresh supply-and-demand signals.
Pivot: 48.44Support: 48.44 48.2 47.65Resistance: 49.56 49.77 50Scenario 1: long positions above 48.44 with targets @ 49.56 & 49.77 in extension.Scenario 2: below 48.44 look for further downside with 48.20 & 47.65 as targets.Comment: the RSI is bullish and calls for further upside.
US 500
U.S. stocks rose sharply on Tuesday, erasing all of their losses from the previous two sessions, as robust new homes sales last month lifted homebuilder and supplier stocks, while a surge in tech stocks helped trigger one of the strongest one-day rallies in the NASDAQ Composite index on the calendar year.
The Dow Jones Industrial Average soared 1.22%, while the S&P 500 Composite index gained 1.37%, and the NASDAQ, meanwhile, surged 2.00%.
On the S&P 500, all 10 sectors closed in the green, as stocks in the Technology, Financials and Health Care industries led. Investors capitalized on a short squeeze in Tuesday's session, piling into the three battered sectors. In total, seven different industries closed up by more than 1% on Tuesday.
Today investors will focus on U.S. data on the goods trade balance, as well as on the speeches from Philadelphia Fed's Harker, Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan, to gain more information on the strength of the American economy.
Pivot: 2034 Support: 2034 2006 1970 Resistance: 2085 2100 2130 Scenario 1: long positions above 2034.00 with targets @ 2085.00 & 2100.00 in extension. Scenario 2: below 2034.00 look for further downside with 2006.00 & 1970.00 as targets. Comment: the RSI calls for a rebound. Thanks to a hammer candlestick on Thursday, the price has just escaped from a declining channel.