The US Dollar traded overall lower compared to other major currencies on Monday ahead of the FOMC meeting, with the US Dollar Index (USDX) closing 0.32% lower.
Gold traded within a relatively tight range and closed almost unchanged despite the fall of the Dollar. Oil pushed higher over supply concerns from Saudi Arabia and possible expectations of lower inventories in the US, while early on Tuesday a report that OPEC production reached a new high for this year, pressured prices down.
US equity indices closed lower, with tech stocks facing continued pressure. Internet companies like Facebook (NASDAQ:FB) and Twitter further declined in value despite both suffering losses around a fifth of their value following the presentation of their earnings, where stagnating user growth was one of the key aspects investors were worried about.
Cryptocurrencies traded again lower, with Bitcoin managing to recover quickly from the intraday fall below the $8,000 mark, while other major cryptocurrencies like Ethereum and Ripple had steeper losses.
On Tuesday in Germany the Retail Sales and Unemployment Rate statistics will be released. France and Italy release their CPI. The European Union will publish its inflation, unemployment and GDP data. In Canada data on Industrial Product Price Index, Raw materials Price Index and the GDP is expected.
EUR/USDHelped by the weaker Dollar, the EUR/USD managed again to climb above the 1.17 mark.
While the European Economic Sentiment at 112.1 matched expectations, the Industrial Confidence for July fell more than expected to a level of 5.8 (expected 6.7). The German Consumer Prices Index (CPI) for July also fell short of expectations with only +0.3% m/m growth (expected +0.4%).
In the US Pending Home Sales were up by 0.9% m/m (expected +0.5%), which was a relief as the data on Existing and New Home Sales published last week fell short of expectations, fueling fears of a slowdown in the housing market.
On Tuesday in Germany the Retail Sales and Unemployment Rate statistics will be released. France and Italy release their CPI. The European Union will publish its inflation, unemployment and GDP data. In the US ahead of the FOMC meeting also key data is expected such as Personal Income, Consumer Spending, Core PCE Price Index and the Employment Cost Index (ECI).
Pivot:1.169Support:1.1691.16651.1645Resistance:1.1721.1741.1765Scenario 1:long positions above 1.1690 with targets at 1.1720 & 1.1740 in extension.Scenario 2:below 1.1690 look for further downside with 1.1665 & 1.1645 as targets.Comment:the RSI shows upside momentum.
The Japanese Yen declined after the interest rate decision by the Bank of Japan (BoJ). While as widely expected no rate change was announced, the central bank made it clear that in has the intention to keep rates very low for extended periods of time as the inflation remained firmly below the target of 2 percent. However the BoJ conceded that yields on long term government bonds could get more flexibility moving up or down, depending on economic activity and prices.
Japanese indices traded higher in the trading session after the BoJ statement. Unemployment for June was higher than expected at 2.4% (expected 2.3%), while Industrial Production contracted by -2.1% m/m (expected -0.4%).
On Friday the monetary policy meeting minutes are expected to get released. Next week in Japan data on Household Spending, the Current Account and the GDP is expected.
Pivot:110.9Support:110.9110.75110.6Resistance:111.4111.55111.7Scenario 1:long positions above 110.90 with targets at 111.40 & 111.55 in extension.Scenario 2:below 110.90 look for further downside with 110.75 & 110.60 as targets.Comment:a support base at 110.90 has formed and has allowed for a temporary stabilization.
Prices of WTI oil reached a two-week high on Monday, before again retracing below the $70 level in early trading on Monday. A report by Reuters indicated that the OPEC had a higher production level in July, which was estimated to be 70 thousand barrels per day higher for this month.
However surveyed analysts cautioned that oil stockpiles in the US could see further reductions. Saudi Arabia is still halting oil shipments through the Red Sea, following attacks on its tankers from Yemen based rebels. This could reduce the ability of Saudi Arabian to ship oil to destinations in Europe and North America.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:69.55Support:69.5568.868.25Resistance:70.270.6571.2Scenario 1:long positions above 69.55 with targets at 70.20 & 70.65 in extension.Scenario 2:below 69.55 look for further downside with 68.80 & 68.25 as targets.Comment:the RSI is mixed with a bullish bias. The prices are trading above 50-period moving average.
US equity indices traded lower, with especially major technology stock under continued pressure as the NASDAQ (US Tech 100) plunged to a new 3-weeks low.
Industrial (US Industrial ETF -0.95%) stocks were also under pressure, while energy companies (US Energy ETF (NYSE:XLE) +0.97%) closed the day overall higher.
Stocks in social media companies Facebook (-2.10%), Twitter (-8.10%) and SNAP (-4.22%) continued to face pressure, with other internet companies such as Spotify (-5.50%) and Dropbox (-7.60%) also facing declines in stock value.
Meanwhile chipmaker AMD (+2.65%) reached again a new all-time high, as analysts raised price targets for the company following the company’s strong Q2 results and over expectations of market gains in the server processer segment.
BP (LON:BP), Pfizer (NYSE:PFE), Procter & Gamble, Apple (NASDAQ:AAPL) and Baidu will release their quarterly earnings on Tuesday and Tesla (NASDAQ:TSLA) and Square (NYSE:SQ) will follow on Wednesday.
Pivot: 7262 Support: 7159 7103.25 7053 Resistance: 7262 7608.5 7365 Scenario 1: short positions below 7262.00 with targets at 7159.00 & 7103.25 in extension. Scenario 2: above 7262.00 look for further upside with 7308.50 & 7365.00 as targets. Comment: the RSI is capped by a bearish trend line.