On Friday the dollar fell against the other major currencies, hitting multi-week lows against the euro and the Swiss franc, after the minutes of the Federal Reserve’s latest meeting indicated that interest rates are likely to remain on hold for longer, until well into 2016. The minutes also noted that recent global economic and financial developments mayhave increased the downside risks to the U.S. economy.
Today markets in Japan and in Canada will be closed for holidays. While, in the U.S., Chicago Fed President Charles Evans and Fed Governor Lael Brainard are to speak at two events.
In the week ahead, investors will be looking to Wednesday’s U.S. data on retail sales and Thursday’s data on consumer prices for fresh indications on the strength of consumer spending.
Elsewhere, Tuesday’s ZEW report on German business sentiment and jobs reports in the U.K. and Australia will be closely watched.
The euro rose to fresh three week highs against the U.S. dollar on Friday, as the dovish tone of the minutes of the Federal Reserve's latest policy meeting weighed heavily on the greenback.
The Fed's September meeting minutes released on Thursday indicated that policymakers were still watching domestic inflation and the impact of slower global growth when considering when to raise interest rates.
Elsewhere, in the minutes of the European Central Bank's September policy meeting released on Thursday, officials said that downside risks to inflation intensified over the summer, but that they need more time to gauge the impact of market volatility and slower growth in China. ECB officials also reiterated the central bank's willingness to increase its stimulus programs to address the risks of low inflation.
Today investors’ focus will be on the speeches from 3 FOMC members: Lockhart, Evans and Brainard, for further indications on the direction of the EUR/USD.
Pivot:1.131
Support:1.1311.1261.123
Resistance:1.13851.1441.146
Scenario 1:Long positions above 1.131 with targets @ 1.1385 & 1.144 in extension.
Scenario 2:Below 1.131 look for further downside with 1.126 & 1.123 as targets.
Comment:The RSI is mixed with a bullish bias.
Gold
Last week, Gold rallied to the highest level in seven weeks on Friday, on the back of heightened expectations that the Federal Reserve will hold off on hiking interest rates until 2016.
Gold would benefit from any delay in raising U.S. interest rates, as higher interest rates make gold look less competitive against interest-yielding assets. A rate hike would also boost the dollar, which would make dollar-denominated gold more expensive to holders of other currencies.
Gold prices jumped also on Monday in Asia, as investors show greater confidence that the Federal Reserve will hold steady in October
In the week ahead, investors will be looking to Wednesday’s U.S. data on retail sales and Thursday’s data on consumer prices for fresh indications on the strength of consumer spending.
Pivot:1151
Support:115111451136
Resistance:117011771185
Scenario 1:Long positions above 1151 with targets @ 1170 & 1177 in extension.
Scenario 2:Below 1151 look for further downside with 1145 & 1136 as targets.
Comment:The RSI is bullish and calls for further upside.
WTI Oil
Last week, crude oil prices were little changed at the end of a volatile session on Friday, having failed to close above the $50 level, but expectations for continued declines in production underpinned prices.
Oil-field-services provider Baker Hughes (N:BHI) said the number of working rigs fell by 9 to 605 for the week ending October 9, the lowest number since July 2010. It was the sixth consecutive weekly decline.
The report added to the view that the shale oil production boom in the U.S. is slowing as a result of a historic rout in oil prices, which slumped to six year lows in August.
But crude oil prices gained smartly in Asia on Monday, as investors saw the dollar steady to weaker for now, as the Federal Reserve appears on hold for rates.
This week investors’ focus will be on: Monday OPEC released of its monthly oil report, Tuesday International Energy Agency publication of its monthly report and Wednesday U.S. Department of Energy publication of its official figures on oil storage levels.
Pivot:48.7
Support:48.747.746.9
Resistance:51.45252.57
Scenario 1:Long positions above 48.7 with targets @ 51.4 & 52 in extension.
Scenario 2:Below 48.7 look for further downside with 47.7 & 46.9 as targets.
Comment:The RSI is mixed to bullish.
U.S. stocks closed slightly higher on Friday, ending the S&P 500's best week for 2015, on a quiet note as investors waited for U.S. companies to report third-quarter earnings.
The S&P 500 had a weekly gain of 3.3%, its best week since December 2015, as investors regained some optimism after a period of heavy volatility since late August on concerns about global growth and uncertainty about U.S. interest rates.
Investors are now anxious to gauge how companies are faring amid U.S. dollar movements and concerns about growth in China, the world's second biggest economy.
In the week ahead, the focus will be to Wednesday’s U.S. data on retail sales and Thursday’s data on consumer prices, for fresh indications on the strength of the US economy.
Pivot: 2044
Support: 1867 1820 1798
Resistance: 2044 2135 2180
Scenario 1: Short positions below 2044 with targets @ 1867 & 1820 in extension.
Scenario 2: Above 2044 look for further upside with 2135 & 2180 as targets.
Comment: As long as 2044 is resistance, look for choppy price action with a bearish bias. A consolidation channel has developed.