The dollar held steady against the other major currencies on Monday, after data showed that U.S. factory orders fell in February and as comments from a Federal Reserve official sparked fresh speculation over additional policy tightening this year. The U.S. Census Bureau said factory orders declined by 1.7% last month, in line with expectations. Factory orders rose 1.2% in January, revised from the initial read of a 1.6% increase. Meanwhile, Boston Fed president Eric Rosengren said that he felt the market was mistaken in its expectations for only zero to one rate hikes this year. In Australia, the trade balance for February widened to a deficit of A$3.41 billion, compared to a deficit seen of A$2.6 billion. Exports fell 1%, while imports were flat. For today, in the euro zone, Germany is to publish data on factory orders. The U.K. is to release data on service sector activity while both the U.S. and Canada are to publish trade balance reports and the Institute of Supply Management is to release data on U.S. service sector activity.
The euro ended on Monday slightly lower against the dollar, ending a weekly rise, as unemployment in the euro area fell slightly in February to hit its lowest level in more than four years. The euro remained near five-month highs versus the dollar, after posting its strongest quarter against the dollar since 2011, after surging by more than 4.75% versus the dollar in the opening three months of the year. On Monday, Eurostat reported that monthly unemployment in the euro zone inched down 0.1 to a seasonally-adjusted 10.3% in February, its lowest level since August, 2011. For today, the U.S. is to publish a report on trade balance and the Institute of Supply Management is to release data on U.S. service sector activity.
Pivot: 1.1465Support: 1.1355 1.134 1.1355Resistance: 1.1415 1.1435 1.1465Scenario 1: short positions below 1.1415 with targets @ 1.1355 & 1.1340 in extension.Scenario 2: above 1.1415 look for further upside with 1.1435 & 1.1465 as targets.Comment: the upward potential is likely to be limited by the resistance at 1.1415.
Gold
Gold was relatively flat on Monday in quiet trade, one session after plunging to fresh five-week lows, as markets in China remained closed for a traditional spring holiday. It came one session after gold plummeted more than $20 an ounce to its lowest level since mid-February, as upbeat U.S. jobs data increased the probability that the Federal Reserve could implement multiple interest rate hikes before the end of the year. Investors in Asia await the release of China's monthly Caixin Services PMI index in March for further indications on the health of the struggling manufacturing sector in the world's second-largest economy. For today, the U.S. is to publish a report on trade balance and the Institute of Supply Management is to release data on U.S. service sector activity.
Pivot: 1209Support: 1209 1202 1195Resistance: 1229 1235 1243Scenario 1: long positions above 1209.00 with targets @ 1229.00 & 1235.00 in extension.Scenario 2: below 1209.00 look for further downside with 1202.00 & 1195.00 as targets.Comment: the RSI is bullish and calls for further upside.
WTI Oil
On Monday, U.S. crude oil prices declined after analysts at BNP Paribas (PA:BNPP) suggested it "wouldn't be unreasonable," for oil prices to revisit 13-year lows seen earlier this year when WTI crude slumped to $26.05 a barrel on February 11. The prospect for a continued rise in global inventories prompted the call, as inventories appear on pace for a 10th consecutive period of quarterly increases. Last week, oil prices fell sharply after Saudi Arabia crown prince Mohammed Bin Salman asserted that the kingdom will resist any agreement to cap its output unless the pact is also signed by their Iranian rivals. Later Tuesday, the American Petroleum Institute will release figures on crude and refined product stockpiles last week. These will be followed on Wednesday by more-closely watched figures from the U.S. Department of Energy.
Pivot: 37.25Support: 34.5 34.3 33Resistance: 37.25 38.39 39.07Scenario 1: short positions below 37.25 with targets @ 34.50 & 34.00 in extension.Scenario 2: above 37.25 look for further upside with 38.39 & 39.07 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
US 500
U.S. stocks ended weaker on Monday, pulling back from a recent rally that took them to new 2016 highs, as losses in commodity-related and industrial shares offset gains in healthcare.
The S&P materials sector fell 1 percent after copper prices touched their lowest in a month, while energy shares slipped with oil prices. Investors also are preparing for a weak first-quarter profit season, with earnings for S&P 500 companies projected to have fallen 7.1 percent from the year-ago first quarter, according to Thomson Reuters data. However, some support is coming from the fact that while the Fed's projections point to two rate hikes this year, traders expect only one, according to the CME Group's (NASDAQ:CME) FedWatch program. For today, the U.S. is to publish a report on trade balance and the Institute of Supply Management is to release data on U.S. service sector activity.
Pivot: 2020 Support: 2020 1970 1950 Resistance: 2080 2100 2130 Scenario 1: long positions above 2020.00 with targets @ 2080.00 & 2100.00 in extension. Scenario 2: below 2020.00 look for further downside with 1970.00 & 1950.00 as targets. Comment: the RSI is mixed and calls for caution. The 20-day simple moving average is trending higher and plays a suppport role.