The dollar remained broadly lower against most major currencies on Monday, despite data that showed U.S. new home sales fell less than expected last month and as the Federal Reserve’s latest policy decision continues to pressure the U.S. currency. The U.S. Commerce Department said new home sales declined by 7.6% to 609,000 units last month, compared to expectations for a drop of 8.8% to 600,000. The yen strengthened even though Bank of Japan Haruhiko Kuroda said the central bank remains ready to use every available tool to achieve its 2% inflation target, including additional stimulus measures. The BoJ made an unexpected shift last week to targeting interest rates on government bonds. Meanwhile, the pound has recently dropped to the lowest level since August 16th while in the euro zone, data on Friday showed that business activity in September expanded at the slowest rate since the start of 2015 adding pressure on the euro. Market participants are now looking ahead to the U.S. private sector data on consumer confidence while later in the day, Federal Reserve Vice Chair Stanley Fischer is due to speak at an event in Washington, DC
USD/JPYThe dollar dropped against the safe-haven yen on Monday following comments from top Bank of Japan officials who supported that the central bank is unable to weaken the yen. BOJ Governor Haruhiko Kuroda said on Monday that the central bank is ready to use every possible policy tool to achieve its 2 percent inflation target. The yen has gained more than 17 percent since the BOJ shocked markets in January by cutting rates below zero for the first time. Strength in the yen was also boosted from Moody's move to cut Turkey's sovereign rating to "junk" on Friday and from an uncertain outcome in the upcoming OPEC meeting. Today, the U.S. is to release private sector data on consumer confidence while later in the day, Federal Reserve Vice Chair Stanley Fischer is due to speak at an event in Washington, DC
Pivot: 101.1Support: 100.05 99.6 98.95Resistance: 101.1 101.6 102.05Scenario 1: short positions below 101.10 with targets @ 100.05 & 99.60 in extension.Scenario 2: above 101.10 look for further upside with 101.60 & 102.05 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Gold prices moved slightly lower on Monday, still trading within a tightening range over the last month, after the strongest weekly advance in almost two months posted last week.. This week gold traders will be shifting their focus on fresh comments from Federal Reserve Chair Janet Yellen, amid ongoing uncertainty over the timing of the next U.S. rate hike as well as durable goods for August on Wednesday and personal income and spending data Friday. There is also a final revision to second-quarter GDP Thursday.
Pivot: 1343.7Support: 1330 1325 1320Resistance: 1343.7 1348 1352Scenario 1: short positions below 1343.70 with targets @ 1330.00 & 1325.00 in extension.Scenario 2: above 1343.70 look for further upside with 1348.00 & 1352.00 as targets.Comment: technically the RSI is below its neutrality area at 50.
Oil prices posted sharp gains on Monday, on hopes that global oil producers will make progress on a deal to cut production at a meeting later this week. The 15th International Energy Forum started off in Algiers on Monday with all eyes on the informal meeting scheduled for Wednesday afternoon among members of the Organization of Petroleum Exporting Countries. OPEC members, led by Saudi Arabia and other big major exporters such as Iran and Iraq, will meet with Russia on the last day of the conference. Markets do not anticipate that the meeting will bring any significant action to reduce the global supply glut. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
Pivot: 45Support: 45 44.4 43.98Resistance: 46.56 47.08 47.5Scenario 1: long positions above 45.00 with targets @ 46.56 & 47.08 in extension.Scenario 2: below 45.00 look for further downside with 44.40 & 43.98 as targets.Comment: the RSI calls for a rebound.
The main U.S indices fell on Monday as Deutsche Bank (DE:DBKGn) weighed on financial shares. Big banks dragged markets lower, as investors worried that Deutsche Bank might need to add additional capital to pay for a $14 billion U.S. demand to settle claims that it missold mortgage-backed securities. Market sentiment appears to favor Hillary as a presidential candidate, as Donald Trump is seen as a wild card that will increase market uncertainty. The S&P financial index fell 1.5 percent, with JPMorgan (NYSE:JPM)'s 2.19 percent decline and Bank of America Corp (NYSE:BAC)'s 2.77 percent slide weighing most on the index. Investors are acting extremely nervous ahead of the debate with the main focus shifted on the health of the economy, interest rates and geopolitical events.
Pivot: 2156 Support: 2131 2123 2107 Resistance: 2156 2163 2173 Scenario 1: short positions below 2156.00 with targets @ 2131.00 & 2123.00 in extension. Scenario 2: above 2156.00 look for further upside with 2163.00 & 2173.00 as targets. Comment: the index currently faces a challenging resistance area at 2156.00.