The dollar fell against most major currencies on Monday, after weak economic reports from the U.S. dampened optimism over the strength of the economy, although the greenback still remained within close distance of a seven-month high.
The Federal Reserve of New York said its Empire State manufacturing index fell to -6.80 in October from -1.99 the previous month.
Analysts had expected the index to rise to 1.00 this month.A separate report showed that U.S. industrial production increased by 0.1% last month, below expectations for a gain of 0.2%.
However, manufacturing production increased by 0.2% last month, compared to forecasts for a 0.1% rise. Earlier in the day, data from euro zone showed that consumer prices rose 0.4% in September, in line with expectations.
On a yearly basis, consumer prices gained 0.4% last month. For today, the U.K. is to publish its monthly inflation report, Canada is to report on manufacturing sales and the U.S. is to release inflation figures.
Later in the week, markets will be focusing on the third and final debate from the U.S. elections and on the ECB post policy meeting press conference on Thursday for indications on whether it will further expand its stimulus program in the face of sluggish growth and inflation.
Chinese third quarter GDP will also be released on Wednesday, with the rate of growth expected to ease again.
The euro is extending its recovery from the 1.0964 low and rises above the 1.1000 level following weak manufacturing and industrial production data from the U.S. and a flat report on inflation data from the euro zone. Ahead in the week, investors will be watching the ECB post policy meeting press conference on Thursday for indications on whether it will further expand its stimulus program in the face of weak growth and inflation. For the end of October and early in November, US elections are expected to dominate the EUR/USD movement, where a victory of Hillary Clinton is expected to be supportive of the US dollar.
Pivot: 1.0985Support: 1.0985 1.0965 1.0945Resistance: 1.104 1.106 1.108Scenario 1: long positions above 1.0985 with targets at 1.1040 & 1.1060 in extension.Scenario 2: below 1.0985 look for further downside with 1.0965 & 1.0945 as targets.Comment: the RSI shows upside momentum.
Gold
Gold prices remain almost unchanged on Monday, after the metal plunged by more than 3% two weeks ago. Further pressure on the precious metal comes from comments from Fed Vice Chair Stanley Fischer saying the central bank is "very close" to job and price targets that should trigger a rate hike. Recent strength in the U.S. dollar continues to dampen demand for the precious metal with the markets shifting their focus on the outcome of the U.S. elections and on the high possibility of a rate hike in December.
Pivot: 1252.5Support: 1252.5 1249.5 1246Resistance: 1262 1266 1269Scenario 1: long positions above 1252.50 with targets at 1262.50 & 1266.00 in extension.Scenario 2: below 1252.50 look for further downside with 1249.50 & 1246.00 as targets.Comment: the RSI calls for a rebound.
WTI Oil
Oil prices fluctuated between small gains and losses on Monday, remaining close to four-month highs, as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season.The Organization of the Petroleum Exporting Countries (OPEC) will meet on Nov. 30 to discuss a planned output cut of around 1 million barrels per day away from its record 33.6 million bpd production in September. The cartel hopes that major non-OPEC producer Russia will cooperate. The American Petroleum Institute will release its estimates of crude stockpiles in the U.S. for last week late on Tuesday. The data will be followed by official figures on Wednesday from the U.S. Department of Energy.
Pivot: 50.57Support: 49.35 49.1 48.53Resistance: 50.57 51.1 51.55Scenario 1: short positions below 50.57 with targets at 49.35 & 49.10 in extension.Scenario 2: above 50.57 look for further upside with 51.10 & 51.55 as targets.Comment: the upward potential is likely to be limited by the resistance at 50.57.
US 500
The main U.S. indices appeared mixed on Monday, fluctuating between gains and losses, with Consumer Services, Oil & Gas and Consumer Goods sectors adding pressure. At the close in NYSE, the Dow Jones Industrial Average declined, while the S&P 500 posted some small gains. Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) weighed on the consumer discretionary sector. Federal Reserve Vice Chairman Stanley Fischer warned that economic stability could be threatened by low interest rates and noted the central bank is "very close" to its employment and inflation targets, but said it was "not that simple" for the Fed to raise rates. Investors are looking for corporate profits to turn around in the third-quarter after a series of declines. With 7 percent of S&P 500 companies having reported, expectations are for a decline of 0.1 percent for the quarter, an improvement from the 0.5 percent decline expected on Oct. 1, according to Reuters.
Pivot: 2107 Support: 2107 2100 2093 Resistance: 2141 2152 2156 Scenario 1: long positions above 2107.00 with targets at 2141.00 & 2152.00 in extension. Scenario 2: below 2107.00 look for further downside with 2100.00 & 2093.00 as targets. Comment: the RSI is mixed with a bullish bias. An inverted head-and-shoulders pattern could take shape.