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iFOREX Daily Analysis – 14/09/2015

Published 09/14/2015, 05:03 AM
Updated 09/16/2019, 09:25 AM

The dollar was lower against the euro for the sixth straight session on Friday, as investors remained cautious ahead of the Federal Reserve’s critical policy announcement this week. Fed Chair Janet Yellen has said that an interest rate increase is data dependent, but has also indicated that she expects to begin raising rates before the end of the year. An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors. In the week ahead investors will be focusing on Thursday’s Fed policy announcement, but Central Bank meetings in Switzerland and Japan and key U.S. data on inflation and retail sales will also be closely watched.

EUR/USD

The euro surged to its highest level for the month of September on Friday, after the release of weaker data from US, and as currency traders gear up for the possibility of divergent monetary policies on each side of the Atlantic, as early as next week if the Federal Reserve raises interest rates at Thursday's FOMC meeting.

US data on Friday showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 85.7 from 91.9 in July, compared to forecasts of 91.2. Separately, the Labor Department reported that the producer price index was flat last month after a 0.2% increase in July.

EUR/USD edged up also on Monday, reaching to two and a half week highs against the U.S. dollar.

Today investors will be focusing on Switzerland data on producer price inflation and retail sales.

EUR/USD
Pivot:1.129

Support:1.1291.1251.121

Resistance:1.141.1441.147

Scenario 1:Long positions above 1.129 with targets @ 1.14 & 1.144 in extension.

Scenario 2:Below 1.129 look for further downside with 1.125 & 1.121 as targets.

Comment:The RSI lacks downward momentum. The prices remain supported by a rising trend line.

Gold

Gold futures slumped to the lowest level in more than four weeks on Friday, as investors remained mixed over whether the U.S. central bank will hike rates at its meeting this Wednesday and Thursday.

Some traders believe the Fed could postpone raising interest rates this month, as officials are likely to remain concerned over volatility in financial markets, due to fears over a China led global economic slowdown.

However, gold prices eased again in Asia on Monday, after mixed economic fortunes for growth in China.

In the week ahead investors will be eyeing Thursday’s critical Fed policy announcement. Key U.S. data on inflation and retail sales ahead of the Fed's decision will also be in focus.

Gold
Pivot:1116

Support:109810941087

Resistance:111611261130.7

Scenario 1:Short positions below 1116 with targets @ 1098 & 1094 in extension.

Scenario 2:Above 1116 look for further upside with 1126 & 1130.7 as targets.

Comment:As long as 1116 is resistance, likely decline to 1098.

WTI Oil

Friday WTI fell sharply, after Goldman Sachs (NYSE:GS) lowered its 2016 forecast for U.S. crude to $45 a barrel from $57 previously, and Brent to $49.50 from $62, citing oversupply and concerns over China's economy.

However, crude oil prices gained again in Asia on Monday, as markets looked ahead to the Federal Reserve review of interest rates this week and mixed China data at the weekend was assessed.

Chinese data showed fixed asset investment rose 10.9%, just below the 11% seen, while industrial production gained 6.1%, below the 6.4% expected and retail sales rose 10.8%, above the 10.5% seen.

Today the Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets that will be closely watched by the investors.

WTI Oil
Pivot:44

Support:4443.442.75

Resistance:46.0546.447.25

Scenario 1:Long positions above 44 with targets @ 46.05 & 46.4 in extension.

Scenario 2:Below 44 look for further downside with 43.4 & 42.75 as targets.

Comment:A support base at 44 has formed and has allowed for a temporary stabilization.

S&P 500

U.S. stocks rose on Friday and the S&P 500 posted its biggest weekly gain since July, as investors weighed whether the Federal Reserve will raise interest rates this week.

Energy shares dropped, however, after Goldman Sachs cut its oil price forecast through next year.

Eight of the ten S&P 500 sectors closed higher, led by gains in utilities, which tend to rise as bond yields fall.

Now investors are awaiting this week's Fed monetary policy meeting and news on whether it will raise benchmark U.S. rates for the first time in almost a decade.

S&P 500
Pivot: 2044

Support: 1867 1820 1798

Resistance: 2044 2135 2180

Scenario 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: The RSI is below its neutrality area at 50%.

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