The dollar moved lower against most major currencies on Monday, in thin trade with U.S. markets closed for a holiday, while sterling pushed higher, climbing around half a cent against the dollar.
Investor sentiment remained cautious as hopes for changes to fiscal, tax and regulatory policy under the Trump administration have so far failed to materialize.
A presidential press conference on Thursday added to doubts over how effective the administration will be in enacting its economic agenda.
Concerns over a lack of clarity on the Trump’s administration’s policies have weighed on the dollar, despite recent upbeat economic data and a brighter outlook for interest rate hikes this year.
The euro was on the defensive, under pressure from fears that the French Presidential election could upset the status quo, as rising anti-establishment sentiment surfaced after last year's Brexit and the U.S. election.
In addition, Greece and its international lenders agreed to let experts work out new reforms to Greek pensions, income tax and the labor market that would allow Athens to eventually qualify for more cheap loans.
For today, the euro zone is to release survey data on private sector business activity and the UK is to report on public sector borrowing while later in the day Minneapolis and Philadelphia Fed presidents are due to speak.
The minutes from the Federal Reserve's last policy meeting due to be released on Wednesday are a key focus for investors.
The euro gained slightly against the dollar on Monday, with markets in the U.S. closed for President’s day.
The single currency found some support as fears eased that the French left could unite behind one candidate in the upcoming presidential elections.
In the U.S. front, lack of clarity on the Trump’s administration’s policies is adding pressure on the dollar, despite recent upbeat economic data, as investors are questioning the effectiveness of the U.S. presidential agenda.
Today, the euro zone is to release survey data on private sector business activity and later in the day, some key Fed members are due to speak. However, the minutes from the Federal Reserve's last policy meeting is the main focus for investors.
Pivot: 1.0605Support: 1.056 1.0535 1.052Resistance: 1.0605 1.062 1.064Scenario 1: short positions below 1.0605 with targets at 1.0560 & 1.0535 in extension.Scenario 2: above 1.0605 look for further upside with 1.0620 & 1.0640 as targets.Comment: the RSI is mixed to bearish.
Gold
Gold prices posted a slight recovery on Monday, with investors hesitant to take strong positions due to the U.S. national holiday for Presidents Day.
The precious metal is fluctuating in a tight range between $1244.5 and $1231 so far this week and investors anticipate a breakout in either direction even though recent comments that favor an interest rate hike in the near future are adding downward pressures on the yellow metal.
For the remaining of the week, minutes from the Fed’s last meeting will be in focus along with developments regarding the Greek bailout, the French and German elections, and the Brexit.
Pivot: 1236.7Support: 1230 1227.4 1223.7Resistance: 1236.7 1239 1243.8Scenario 1: short positions below 1236.70 with targets at 1230.00 & 1227.40 in extension.Scenario 2: above 1236.70 look for further upside with 1239.00 & 1243.80 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
WTI Oil
Oil prices moved higher on Monday, trading within a tight range during American morning hours, as U.S. markets were closed for President’s Day and as market players continue to weigh the prospect of production cuts by major crude-producing nations against a rise in U.S. drilling.
Fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday will be closely watched to assess the strength of demand in the world’s largest oil consumer.
The reports come out one day later than usual due to Monday's President's Day holiday.
Pivot: 53.37Support: 53.37 53.25 53.08Resistance: 53.95 54.13 54.35Scenario 1: long positions above 53.37 with targets at 53.95 & 54.13 in extension.Scenario 2: below 53.37 look for further downside with 53.25 & 53.08 as targets.Comment: the RSI lacks downward momentum. Prices broke above a bearish channel.
US 30
European stocks traded broadly higher on Monday as investors focused on corporate movements with particular attention on Unilever (LON:ULVR) as Kraft Heinz withdrew a merger offer.
In morning trade in Europe, the Euro Stoxx 50 gained 0.35%, France’s CAC 40 advanced 0.11%, and Germany’s DAX 30 traded up 0.58%.
Shares in Unilever fell by more than 6% on both exchanges, leading the decliners, as Kraft Heinz Co decided not to improve its $143 billion offer to merge with the Anglo-Dutch consumer goods firm.
Unilever chief executive Paul Polman had rejected the offer last week due to what he considered a lack of financial or strategic merit.
Pivot: 11780 Support: 11780 11745 11685 Resistance: 11850 11880 11910 Scenario 1: long positions above 11780.00 with targets at 11850.00 & 11880.00 in extension. Scenario 2: below 11780.00 look for further downside with 11745.00 & 11685.00 as targets. Comment: the RSI is bullish and calls for further upside.