On Tuesday, the U.S saw a soft batch of economic data. The U.S. trade deficit in March increased to a six year high, as labor disputes at West Coast ports and recent strength in the dollar weighed heavily on foreign trade. In its monthly report, the U.S. Department of Commerce said the nation's trade deficit rose sharply by 43.1% to $51.4 billion, its highest level since Fall, 2008. The percentage increase was also the highest since December, 1996. Following the release gold reached a weekly high after the release. March exports rose modestly to $187.8 billion, while imports soared by more than $17 billion to $239.2 billion for the month. The increase of the trade deficit has created worries of further economic slowdown. Japanese markets are closed again today as they mark Constitution Day public holiday, and the final day of the Golden Week. Currency traders await for Friday's jobs release from the U.S but prior to that a general election on Thursday to elect the 56th Parliament of the United Kingdom will be in focus.
The euro rose slightly against the U.S. dollar on Tuesday pausing its recent drop, as the U.S. trade deficit in March soared to its highest level in more than six years. March exports rose modestly to $187.8 billion, while imports skyrocketed by more than $17 billion to $239.2 billion for the month adding strong pressure on the dollar. Concerns related to the Greek debt crisis and the timing of an interest rate hike by the Federal Reserve continue to add pressure on the EUR/USD pair which rose just above 1.12 once more, after dropping below 1.1100 on Tuesday. In Brussels, talks between Greece and its euro zone creditors were put on hold until Athens agreed to further reform measures deemed necessary to unlock critical aid. According to European commissioner for Economic Affairs there is hope that a deal can be reached at the next euro group meeting on May 11. For today, the euro zone is to publish revised data on service sector activity and a report on retail sales. The U.S. is to release its monthly ADP nonfarm payrolls report and later in the day Fed Chair Janet Yellen is to speak at an event in Washington DC.
Pivot
1.112
Support
1.112
1.106
1.1015
Resistance
1.1295
1.138
1.145
Scenario 1: Long positions above 1.112 with targets @ 1.1295 & 1.138 in extension.
Scenario 2: Below 1.112 look for further downside with 1.106 & 1.1015 as targets.
Comment: The pair remains on the upside and is approaching its previous top.
In China, one of the biggest buyers of gold together with India, the April HSBC services PMI rose to 52.9, from 52.3 in March reaching a four-month high. The latest set of PMI data indicated that Chinese service-sector companies had a strong start to Q2 with activity and new orders both rising in April. This adds support to gold prices and together with recent stimulus measures such as cuts to banks' reserve ratios and lending/deposit rates, aim to prevent the economy from slowing further from the 7% annual pace of growth registered in Q1. For today gold traders will focus on monthly ADP nonfarm payrolls report and later in the day Fed Chair Janet Yellen is to speak at an event in Washington DC
Pivot
1190.5
Support
1190.5
1185
1177
Resistance
1200
1207
1212.5
Scenario 1: Long positions above 1190.5 with targets @ 1200 & 1207 in extension.
Scenario 2: Below 1190.5 look for further downside with 1185 & 1177 as targets.
Comment: The RSI is mixed to bullish.
OIL/USD
Crude oil prices rose to their highest levels of 2015 on Tuesday, supported by geopolitical tensions in Northern Africa and the Middle East. In Libya, officials were forced to shut down the Zueitina oil port near Benghazi after protesters blocked a pipeline to the export facility. The protests also forced several oilfields in Eastern Libya to close. Elsewhere, Republicans leaders in the Senate appeared to be at a standstill on a resolution for an Iranian Nuclear Bill which was expected to come up for a vote later this week. Energy traders await Wednesday's weekly inventory report from the Energy Information Administration (EIA) to receive a better indication on current U.S. supply levels.
Pivot
60.3
Support
60.3
59.1
58.3
Resistance
62.45
63.6
64.2
Scenario 1: Long positions above 60.3 with targets @ 62.45 & 63.6 in extension.
Scenario 2: Below 60.3 look for further downside with 59.1 & 58.3 as targets.
Comment: Technically the RSI is above its neutrality area at 50.
U.S. stocks finished sharply lower on Tuesday with losses in the Utilities, Technology and Telecoms sectors after a surprisingly wide March U.S. trade deficit raised concerns that the economy shrank in the first quarter. The S&P 500 dropped by more than 1% with the worst performers of the day being Apple (NASDAQ:AAPL), Home Depot (NYSE:HD) and EI du Pont de Nemours and Company (NYSE:DD). With corporate earnings season ending, investors are now waiting for the April employment report due on Friday that could give further indications on the timing of a potential interest rate hike.
Pivot
2039
Support
2039
1972
1904
Resistance
2125
2180
2215
Scenario 1: Long positions above 2039 with targets @ 2125 & 2180 in extension.
Scenario 2: Below 2039 look for further downside with 1972 & 1904 as targets.
Comment: The RSI is mixed with a bullish bias.
APPLE
Apple's stock drop of over 2% yesterday was to blame for a big part of the drop in some of the main U.S indices. Apple stock was the biggest percentage loser among components of the Dow Jones Industrial Average. Despite the fact that iPhone revenue rose 55% year over year last quarter and shipments rose 40%, however, sales of the iPad are fading, with revenue falling 29% and shipments declining 23% year over year last quarter. That weakness is caused by the commoditization of the tablet market. Apple's main weakness is its top-heavy dependence on the iPhone.
Pivot
126.5
Support
126.5
124.5
122.9
Resistance
131.6
133.2
134.6
Scenario 1: Long positions above 126.5 with targets @ 131.6 & 133.2 in extension.
Scenario 2: Below 126.5 look for further downside with 124.5 & 122.9 as targets.
Comment: The RSI is mixed with a bullish bias.