Federal Reserve Chair Janet Yellen expressed hope on Monday that the economy will continue to expand and if that is the case, it will be appropriate to raise interest rates in December. Yellen also added that the pace of that normalization is expected to be gradual. In addition, on Monday, the Federal Reserve Board of Governors scheduled a closed-door meeting, to review the discount rates charged by its regional banks. The discount rate is the interest rate charged to commercial banks on loans they receive from their regional Federal Reserve Bank lending facilities. Overnight, the dollar remained higher against the other major currencies on Monday, despite weak housing sector data. Existing home sales decreased by 3.4% last month when analysts had expected a fall of 2.3%. For today, in the euro zone, the Ifo Institute is to report on German business climate whereas the U.S. is to release revised data on third quarter growth, as well as a report on the trade balance and data on consumer confidence.
The EUR/USD fell to fresh seven-month lows on Monday despite weak housing sector data from the U.S., and eventually covered some losses late in the session. The Federal Reserve rattled markets by holding an unscheduled meeting to discuss the possibility of raising a key rate charged to commercial banks on loans. The currency pair traded in a broad range between 1.0593 and 1.0657 before settling 0.09% lower for the day. On Monday morning, the Federal Reserve Board of Governors scheduled a closed-door meeting, to review the discount rates charged by its regional banks. For today, in the euro zone, the Ifo Institute is to report on German business climate whereas the U.S. is to release revised data on third quarter growth, as well as a report on the trade balance and data on consumer confidence.
Pivot: 1.0665Support: 1.06 1.056 1.0515Resistance: 1.0665 1.071 1.0765Scenario 1: Short positions below 1.0665 with targets @ 1.06 & 1.056 in extension.Scenario 2: Above 1.0665 look for further upside with 1.071 & 1.0765 as targets.Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
WTI Oil
Overnight, U.S. crude oil prices fell into negative late in Monday's session on a choppy day of trading, as investors locked into profits created from a Saudi Arabian-fueled rise ahead of next week's critical OPEC meeting. Energy traders on Monday reacted to bullish comments from Ali bin Ibrahim Al-Naimi, the Saudi Arabian minister for petroleum and mineral resources, on the world's largest exporter’s willingness to cooperate with OPEC in an effort to stabilize prices. Appearing at a seminar on the future of energy in the Middle East and North Africa, al-Naimi indicated that Saudia Arabia is ready to use all tools necessary in order to reduce instability on global energy markets. On Tuesday in the U.S., industry group the American Petroleum Institute reports crude and refined product stockpile estimates for last week.
Pivot: 40.49Support: 40.49 40.43 39.9Resistance: 42.76 43.25 43.85Scenario 1: Long positions above 40.94 with targets @ 42.76 & 43.25 in extension.Scenario 2: Below 40.94 look for further downside with 40.43 & 39.9 as targets.Comment: The RSI is mixed with a bullish bias.
Worries over crude prices re-emerged on Monday, pressuring commodities and equities as the S&P 500 fell following its best week of the year. A big healthcare deal where Pfizer acquired Allergan (N:AGN_pa) failed to impress investors and prices continued to drop. The Dow Jones Industrial Average fell 0.17%, the S&P 500 slid 0.12%, and the Nasdaq was down 0.05%. Crude oil trading was unpredictable on Monday after warnings that the Organization of Petroleum Exporting Countries needs to take action to cut output and after Saudi Arabia agreed to cooperate with other oil producers to stabilize prices. The group's next meeting is Dec. 4. A few days ahead of the U.S. Thanksgiving holiday, when markets are closed, about 6.18 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the 20 sessions, according to Reuters data. Investors will now be focusing on revised data on third quarter growth from the U.S., as well as a report on the trade balance and data on consumer confidence.
Pivot: 1990Support: 1990 1928 1867Resistance: 2116 2135 2180Scenario 1: Long positions above 1990 with targets @ 2116 & 2135 in extension.Scenario 2: Below 1990 look for further downside with 1928 & 1867 as targets.Comment: The RSI is above its neutrality area at 50%.
Pfizer
Pfizer was one of the worst performers on the Dow after the drugmaker sealed its acquisition of Dublin-based Allergan. The $160 billion deal will create the world's biggest drugmaker, as well as the biggest tax inversion in corporate history as Pfizer will move to Ireland. Pfizer's announcement of what is expected to be the biggest-ever healthcare deal pushed its shares down 2.6 percent making it one of the biggest drags on the S&P. Disappointment in the Pfizer/ Allergan deal was driven by weaker-than-hoped-for projected savings from the complex deal, antitrust issues, along with a possible delay in Pfizer's plan to split into two companies.
Pivot: 34.5 Support: 30.5 29.7 28.9 Resistance: 34.5 35.9 36.7 Scenario 1: the downside prevails as long as 34.5 is resistance. Scenario 2: the upside breakout of 34.5 would call for 35.9 and 36.7. Comment: the RSI is below its neutrality area at 50. The MACD is below its signal line and negative. The configuration is negative.