The dollar remained broadly lower against most major currencies on Tuesday, after the release of mixed U.S. economic reports which weakened demand for the dollar. The dollar weakened after the U.S. National Association of Realtors said that existing home sales fell by 10.5% to a 19-month low of 4.76 million units last month when analysts had expected a rise to 5.35 million units in November. The data came after the U.S. Commerce Department reported that gross domestic product grew at an annual rate of 2.0% in the three months ending September 30, better than expectations for 1.9%. Preliminary data initially showed U.S. growth at 2.1% in the third quarter. The euro’s gains were expected to remain limited however, as inconclusive elections in Spain over the weekend sparked political concerns. Spanish Prime Minister Mariano Rajoy said on Monday that his centre-right People's Party would talk to rivals in a bid to form a government, but the left-wing parties reportedly said they would not want Rajoy to remain in power. For today, the U.K. is to release quarterly data on the current account, as well as a final report on third quarter economic growth, the U.S. is release a batch of data including durable goods orders, personal spending, new homes sales, consumer sentiment and crude oil inventories. In Canada, monthly data on economic activity and retail sales are due.
The euro rose moderately against the dollar on Tuesday on a day with thin trading volumes, following a weak housing report and a U.S. GDP report almost in line with expectations which seemed to weigh heavily on a weakening dollar. The currency pair traded in a tight range between 1.0902 and 1.0984 before settling 0.36% for the session. The euro is up by more than 3.20% against the dollar since the beginning of the month where the European Central Bank rattled global currency markets by implementing limited easing measures at a closely-watched meeting. The euro’s rise is receiving significant pressure from Spain which failed to form a government as the left-wing parties reportedly said they would not want Rajoy to remain in power. For today, the U.S. is to release a string of economic reports including durable goods orders, personal spending, new homes sales, consumer sentiment and crude oil inventories.
Pivot: 1.09
Support: 1.091.0881.0845
Resistance: 1.0981.1011.1035
Scenario 1: long positions above 1.09 with targets @ 1.098 & 1.101 in extension.
Scenario 2: below 1.09 look for further downside with 1.088 & 1.0845 as targets.
Comment: the RSI lacks downward momentum.
WTI Oil
WTI Crude oil prices rebounded from multi-year lows on Tuesday, mainly due to short covering positions as investors continue to assess the record high supply levels which have depressed prices for the majority of the year. WTI crude oil traded between $35.7 and $36.5 a barrel before settling at almost 0.95% higher for the session. Prices have plummeted by more than 50% since OPEC rattled markets last November by leaving its production ceiling above 30 million barrels per day in an effort to defend its market share. Wednesday's U.S. government report could show that U.S. crude stockpiles rose by 1.4 million barrels for the week that ended on Dec. 18. A week earlier, domestic crude inventories increased by 4.8 million barrels to 490.7 million barrels, its highest level in at least 80 years.
Pivot: 35.4
Support: 35.4 35 34.5
Resistance: 36.9 37.35 37.9
Scenario 1: long positions above 35.4 with targets @ 36.9 & 37.35 in extension.
Scenario 2: below 35.4 look for further downside with 35 & 34.5 as targets.
Comment: the RSI is mixed with a bullish bias.
Crude oil prices continue to set the direction for stocks, a pattern noticed in the last weeks. Crude oil prices enjoyed a rebound on Tuesday after trading near six-year lows to begin the week. While crude oil prices affect the energy sector the most, the impact is now moving into other sectors as investors fear that the recent pressure on commodities is a result of a weaker global economy. The S&P 500 closed up 0.88%, the Dow Jones Industrial Average rose 1%, and the Nasdaq added 0.65%. For the year to date, the S&P 500 has fallen 1% and the Dow has dropped 2.3%. The third and final estimate of third-quarter economic growth was reduced to 2%, down from a previously estimated 2.1% growth. Economists factored in a larger trade deficit and greater-than-expected rise in inventories. For today, the U.S. is to release a string of economic reports including durable goods orders, personal spending, new homes sales, consumer sentiment and crude oil inventories.
Pivot: 2081
Support: 1993 1953 1911
Resistance: 2081 2116 2135
Scenario 1: short positions below 2081 with targets @ 1993 & 1953 in extension.
Scenario 2: above 2081 look for further upside with 2116 & 2135 as targets.
Comment: the RSI is bearish and calls for further decline.
France stocks were mixed to lower after the close on Tuesday, as gains in the General Retailers, Basic Materials and Banking sectors failed to lead shares higher. At the close in Paris, the CAC 40 fell 0.05%. The best performers of the session on the CAC 40 were ArcelorMittal SA which rose 6.05% Credit Agricole (PA:CAGR) which added 2.41% and Bouygues (PA:BOUY) which was up 1.64%. The worst performers were Adocia which was down 2.76%, Mercialys which lost 2.71% and Veolia Environnement (PA:VIE) which was down 2.03%. The rise in stock prices is pressured by the recent strength in the euro which is limiting international transactions for companies operating on a multinational level.
Pivot: 4617
Support: 4524 4460 4425
Resistance: 4617 4670 4742
Scenario 1: short positions below 4617 with targets @ 4524 & 4460 in extension.
Scenario 2: above 4617 look for further upside with 4670 & 4742 as targets.
Comment: as long as 4617 is resistance, look for choppy price action with a bearish bias.