The dollar remained lower against most other major currencies on Monday, as declining expectations for a U.S. rate hike before the end of the year continued to add pressure on the greenback. Minutes from the Federal Reserve's September policy meeting, published on Thursday, showed that most policymakers thought an initial rate hike should still come this year and that financial market turmoil had not "materially changed" the outlook for the U.S. economy. On Monday morning, Atlanta Fed president Dennis Lockhart indicated that the FOMC will have more economic data at its disposal in December to make the decision versus its meeting later this month In China the trade balance for September came in at a higher surplus than expected, while imports plunged 17.7%, well below the expected drop of 15%, but exports eased 1.1%, better than the 6.3% decline seen. For today, the U.K. is to release data on consumer prices while in the euro zone, the ZEW Institute is to report on German economic sentiment. Traders also wait for the release of a steady stream of economic data later this week for further indications on the strength of the global economy. The main focus is shifted on inflation data both from Eurozone and the U.S.
The euro rose slightly against the dollar on Monday, reaching its highest level in three weeks as the market is trying to assess whether the Federal Reserve will wait until 2016 before raising short-term interest rates. The currency pair traded in a broad range between 1.1268 and 1.1397 for the day. On Monday morning, Atlanta Fed president Dennis Lockhart indicated that the FOMC will have more economic data at its disposal in December to make the decision versus its meeting later this month. Last week, Lockhart said he will keep a close eye on U.S. consumer spending data as he weighs his decision. Separately, Chicago Fed president Charles Evans said on Monday that he would prefer to wait until 2016 to raise rates, citing soft inflation data. For today in the euro zone, the ZEW Institute is to report on German economic sentiment as investors await for the inflation reports from both continents toward the end of the week.
Pivot: 1.133Support: 1.133 1.1295 1.126Resistance: 1.14 1.144 1.146Scenario 1: Long positions above 1.133 with targets @ 1.14 & 1.144 in extension.Scenario 2: Below 1.133 look for further downside with 1.1295 & 1.126 as targets.Comment: The RSI is mixed to bullish.
WTI Oil
Crude oil pulled back from an 11-week high on Monday, closing almost 5% lower at $47.10 a barrel. The energy industry had surged last week after a sharper-than-expected drop in crude inventories and crude oil's brief rally above $50 a barrel inspired hope that the sharp drop in commodities had found its bottom. Separately, Kuwait oil minister Ali al-Omair offered no signals on Monday that OPEC will alter its production strategy, days after reports surfaced that Saudi Arabia and Russia could meet again in the coming weeks to craft a strategy to stabilize crashing prices. Russia has reportedly urged OPEC to lower supply levels over the next year, it still appears reluctant to surrender market Crude oil prices found some support on Tuesday after positive exports data, while investors await for industrial inventory data from the API later in the day.
Pivot: 48.34Support: 48.34 49.13 50.15Resistance: 46.4 45.7 44.6Scenario 1: Short positions below 48.34 with targets @ 46.4 & 45.7 in extension.Scenario 2: Above 48.34 look for further upside with 49.13 & 50.15 as targets.Comment: As long as 48.34 is resistance, likely decline to 46.4.
Coming off their best week of the year, U.S. stocks treaded water on Monday as investors look for a clear indication about the direction of corporate earnings. Stock displayed little momentum to start the week, looking ahead to reports from JPMorgan (N:JPM) and Intel (O:INTC), scheduled for Tuesday, that are likely to offer signals about the strength of the U.S. economic recovery. The S&P 500 was up 0.12%, the Dow Jones Industrial Average added 0.28%, and the Nasdaq gained 0.17%. Analysts expect S&P 500 companies to report a 4.8% decline in third-quarter earnings and 3.6% drop in revenue, according to Thomson Reuters. Continued strength in the U.S. dollar and crude oil near 2015 lows are expected to have been the main challenge to growth over the three-month period.
Pivot: 2044Support: 1867 1820 1798Resistance: 2044 2135 2180Scenario 1: Short positions below 2044 with targets @ 1867 & 1820 in extension.Scenario 2: Above 2044 look for further upside with 2135 & 2180 as targets.Comment: As long as 2044 is resistance, look for choppy price action with a bearish bias. A consolidation channel has developed.
Twitter (N:TWTR)
Twitter fell by nearly 7% on reports it is set to announce company-wide layoffs this week which will possibly affect all departments. Twitter has around 4,200 employees as of the end of last quarter, more than double the number it had when it floated in 2013.
Pivot: 27 Support: 27 24.2 22.6 Resistance: 36 37.8 39.5 Scenario 1: the upside prevails as long as 27 is support. Scenario 2: the downside breakout of 27 would call for 24.2 and 22.6. Comment: the RSI is above its neutrality area at 50. The MACD is positive and above its signal line.