Currency traders are hesitant to make any major trades before the FOMC monetary policy statement on Thursday. Nearly a decade has passed since the U.S. Central Bank has raised its benchmark interest rate which remains between zero and 0.25% since December, 2008. Fed chair Janet Yellen has indicated that the FOMC will place a strong emphasis on the strength of the economy and labor markets, as it weighs the decision. In August, U.S. nonfarm payrolls increased by 173,000, below consensus estimates of a 223,000 gain. The unemployment rate, however, fell to 5.1%, its lowest level since April, 2008, prior to the start of the Financial Crisis. The Fed also reportedly remains concerned that weakness in the Chinese economy could affect the global markets at large, possibly forcing it to keep the Fed Funds Rate at its current level. The latest data from China provide further indications that the world's second-largest economy might fail to meet its annual growth target expectation of 7% for 2015. For today, the U.K. is to release data on consumer price inflation, in the euro zone, the ZEW Institute is to report on German economic sentiment and the U.S. is to publish data on retail sales, industrial production and manufacturing activity in the New York region.
The euro ended in negative territory against the dollar on Monday, halting an eight-session winning streak, ahead of the start of a critical two-day Federal Open Market Committee meeting beginning on Wednesday. The currency pair fluctuated between a low of 1.1284 and a high of 1.1373 before settling 0.19% lower for the session. Last week, the euro rose to two-week highs against the dollar, after a wave of mixed U.S. economic data, which provided no clarity as to whether the Federal Reserve will raise interest rates on Thursday or not. In the euro zone, the ZEW Institute is to report on German economic sentiment. The U.S. is to publish data on retail sales, industrial production and manufacturing activity in the New York region.
Pivot:1.1335
Support:1.1281.1251.121
Resistance:1.13351.1371.14
Scenario 1:Short positions below 1.1335 with targets @ 1.128 & 1.125 in extension.
Scenario 2:Above 1.1335 look for further upside with 1.137 & 1.14 as targets.
Comment:As long as 1.1335 is resistance, look for choppy price action with a bearish bias. The pair has broken below the lower boundary of a bullish channel.
WTI Oil
Crude oil prices were lower after mixed economic data from China, the world's second-largest economy. Industrial production rose 6.1% in August, below an estimated 6.4% gain, while fixed-asset investment also fell short of expectations. Global markets have been under pressure on signs China is suffering a slowdown. West Texas Intermediate crude closed approximately 1.4% lower at $44.25 a barrel. Prices remain down nearly 24% for the year to date and down 50% from a year earlier. The energy sector was among the worst performers on Monday. Oil traders will be focusing on today’s industrial production data from the U.S. as well as on Wednesday’s crude oil inventory data from the EIA.
Pivot:44.9
Support:43.442.7541.75
Resistance:44.945.4546.05
Scenario 1:Short positions below 44.9 with targets @ 43.4 & 42.75 in extension.
Scenario 2:Above 44.9 look for further upside with 45.45 & 46.05 as targets.
Comment:As long as 44.9 is resistance, likely decline to 43.4.
Dow Jones
Stocks moved lower on Monday, amid disappointing economic data from China over the weekend and in expectation of the Federal Reserve decision on interest rates in three days. A sell-off on the Shanghai Composite index spilled over into U.S. markets with the S&P 500 ending down 0.41%, the Dow Jones Industrial Average falling by 0.38%, and the Nasdaq 0.34% lower. The Fed's September meeting will begin on Wednesday, followed by a press conference and a possible interest rate hike on Thursday afternoon. An increase in rates would mark the first since 2006. Arguments for and against a September rate hike remain equally strong and mixed data from last week failed to provide any clarity as to whether the Fed will make its move this week. For today, the U.S. is to publish data on retail sales, industrial production and manufacturing activity in the New York region.
Pivot:17570
Support:153701476514200
Resistance:175701835018650
Scenario 1:Short positions below 17570 with targets @ 15370 & 14765 in extension.
Scenario 2:Above 17570 look for further upside with 18350 & 18650 as targets.
Comment:The RSI is below its neutrality area at 50%.
Apple (NASDAQ:AAPL)
Apple ended the session as the top performer on the Dow, as the world's largest company announced that new iPhone sales during its first weekend of pre-orders eclipsed sales marks of its previous versions in the first weekend after it was launched last year. Sales for the iPhone6S and iPhone 6S plus are on pace to exceed sales totals of 10 million reached by a new version of the phone in 2014, Apple added. Shares in Apple gained 1.09 or 0.95% to close at 115.30.
Pivot: 117.6
Support: 102.1 92.35 86.5
Resistance: 117.6 125 134.4
Scenario 1: Short positions below 117.6 with targets @ 102.1 & 92.35 in extension.
Scenario 2: Above 117.6 look for further upside with 125 & 134.4 as targets.
Comment: The RSI is below its neutrality area at 50%.