The dollar lost ground, dropping to 10 month lows against most major currencies on Tuesday, as the release of weak U.S. housing sector data continues to pressure demand for the greenback. The U.S. Census Bureau reported a drop in building permits by 7.7% in March to 1.086 million units, after a 2.2% drop the previous month to 1.177 million units. Analysts had expected building permits to rise to 1.200 units last month. U.S. housing starts declined by 8.8% after increasing by 6.9% in February. Earlier Tuesday, data showed that the ZEW economic sentiment index for Germany rose to 11.2 in April from March’s reading of 4.3, beating forecast of 8.0. Analysts said a strike by oil workers in Kuwait, which continued for a third day lowered production from the OPEC member and boosted crude prices and commodity currencies. Concerns over China's economic growth have also diminished, while concerns of a Fed interest rate hike in the near future have receded. For today, the U.K. is to publish its monthly employment report, Canada is to release data on wholesale sales and the U.S. is to report on existing home sales.
The dollar fell against the euro, after strong economic sentiment data from Germany and as the release of disappointing U.S. housing sector data fuelled concerns over the strength of the U.S. economy. Meanwhile, uncertainty over future U.S. rate hikes persisted after New York Federal Reserve President William Dudley warned on Monday that the U.S. central bank is likely to stick to a cautious approach on tightening monetary policy. However, Boston Fed President Eric Rosengren said that rates could increase more rapidly than investors currently expect. For today, investors will be focusing on existing home sales data from the U.S.
Pivot: 1.1325 Support: 1.1325 1.129 1.127 Resistance: 1.14 1.143 1.1465 Scenario 1: long positions above 1.1325 with targets @ 1.1400 & 1.1430 in extension. Scenario 2: below 1.1325 look for further downside with 1.1290 & 1.1270 as targets. Comment: the RSI is mixed to bullish. Gold
Gold gained more than $25 an ounce on Tuesday, as the dollar continues to drop reaching 10-month lows, providing a significant boost to the precious metal. With the sharp gains, gold is now up nearly 19% since the start of the year and is has posted its strongest one-day session in more than a month. The precious metal was mainly supported by a batch of weak housing data and fading expectations of a rate hike in the near future. Gold traders’ attention is now shifted towards existing home sales data from the U.S.
Pivot: 1240.75 Support: 1240.75 1235.5 1227 Resistance: 1259 1265 1269.75 Scenario 1: long positions above 1240.75 with targets @ 1259.50 & 1265.00 in extension. Scenario 2: long positions above 1240.75 with targets @ 1259.50 & 1265.00 in extension. Comment: the RSI is mixed with a bullish bias. WTI Oil
Crude oil prices reached fresh yearly-highs, recovering all of their losses posted after the disappointing meeting of OPEC and non-OPEC producers in Qatar over the weekend, as Iranian officials said Tuesday that its production could return to pre-sanction levels in two months, providing indications that the Persian Gulf nation might be willing to engage in talks aiming to cut production when OPEC meets next in June. The American Petroleum Institute late Tuesday reported that crude supplies rose by 3.1 million barrels for the week that ended April 15. Energy traders will now be focusing on the closely watched Energy Information Administration report that is to be released later in the day.
Pivot: 39.5 Support: 39.5 38.44 37.6 Resistance: 40.76 40.76 42.42 Scenario 1: long positions above 39.50 with targets @ 40.76 & 41.54 in extension. Scenario 2: below 39.50 look for further downside with 38.44 & 37.60 as targets. Comment: a support base at 39.50 has formed and has allowed for a temporary stabilisation. US 500
U.S. stocks were mixed on Tuesday, as a wave of weak earnings reports offset energy-related gains spurred by an unexpected rally that pushed crude prices to fresh yearly-highs. Netflix (NASDAQ:NFLX) shares fell sharply even after the popular internet streaming service exceeded analysts' expectations with its subscriber growth and earnings last quarter. Investors focused more intently on Netflix's weak subscriber projections for the second quarter. The S&P 500 gained by 0.31% to 2,100.80, closing higher for the fifth time in six sessions. On the S&P 500, eight of 10 sectors closed in the green as stocks in the Basic Materials and Energy sectors gained while stocks in Technology and Consumer lagged. U.S housing data is due to be reported today while later in the week jobless claims and manufacturing activity will be in the spotlight.
Pivot: 2020 Support: 2020 1970 1970 Resistance: 2115 2130 2135 Scenario 1: long positions above 2020.00 with targets @ 2115.00 & 2130.00 in extension. Scenario 2: below 2020.00 look for further downside with 1970.00 & 1950.00 as targets. Comment: below 2020.00 look for further downside with 1970.00 & 1950.00 as targets.