USD Loses Ground Against Major Currencies Despite Positive Home Sales
Forex Million | Jun 23, 2015 05:22AM ET
Τhe dollar lost ground against most currencies on Monday, even after data showed that U.S. existing home sales rose more than expected in May to hit the highest level since 2009. The National Association of Realtors reported on Monday that U.S. existing home sales increased 5.1% exceeding expectations for a 4.4% increase May. However, the drop in the euro overshadowed weakness in the dollar, as investors were expecting a more decisive outcome from the meeting in Brussels. According to BBC, talks included a proposal made to creditors with plans to raise the nation's retirement age to 67 to impose increases to Value Added Taxes on electricity while Greece appears now more open to a target budget surplus of 1% for this year, 2% next year and up to 3% in 2017. Remarks were made by European Commission President Jean-Claude Juncker who said Greece's proposals are a step in the right direction and that he was confident a deal could be finalized this week. Elsewhere, in China the June Markit Flash Manufacturing PMI rose to 49.6, better than May's final of 49.2. For today, the euro zone is to release survey data on private sector activity while the U.S. is to release reports on durable goods orders, manufacturing activity and new home sales.
EUR/USD
The euro fell against the dollar on Monday following the meeting in Brussels, as investors were waiting for a more decisive outcome from the Greek Debt negotiations. The pair was also pressured by positive existing home sales figures which reached the highest level since 2009. EUR/USD was fluctuating in a range between 1.13 and 1.14 for the past week and is now trading close to the bottom of the range. According to BBC, talks included a proposal made to creditors with plans to raise the nation's retirement age to 67 to impose increases to Value Added Taxes on electricity while Greece appears now more open to a target budget surplus of 1% for this year, 2% next year and up to 3% in 2017. For today investors will be focusing on survey data on private sector activity from euro zone while the U.S. is to release reports on durable goods orders, manufacturing activity and new home sales.
Pivot: 1.1315
Support: 1.1225; 1.12; 1.1155
Resistance: 1.1315; 1.1365; 1.1405
Scenario 1: Short positions below 1.1315 with targets @ 1.1225 & 1.12 in extension.
Scenario 2: Above 1.1315 look for further upside with 1.1365 & 1.1405 as targets.
Comment: The RSI has broken down its 30 level.
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OIL/USD
After the positive manufacturing data from China, one of the biggest buyers crude oil prices moved to positive territory on Tuesday ahead of the American Petroleum Institute report on inventories. In China the June Markit Flash Manufacturing PMI rose to 49.6, better than May's final of 49.2. Weakness in the dollar caused prices to rise on Monday, while support also came from signs of optimism for a potential deal on the Greek debt negotiations. The American Petroleum Institute later Tuesday will release its estimates of crude and refined product inventories in the U.S. at the end of last week while on Wednesday, the more closely-watched figures from the U.S. Department of Energy are due to be released.
Pivot: 60.6
Support: 59.3; 58.5; 58
Resistance: 60.6; 61.3; 61.8
Scenario 1: Short positions below 60.6 with targets @ 59.3 & 58.5 in extension.
Scenario 2: Above 60.6 look for further upside with 61.3 & 61.8 as targets.
Comment: As long as 60.6 is resistance, likely decline to 59.3.
DOW JONES
The main U.S. stock indices surged on Monday despite the lack of a decisive outcome from the Greek Debt talks in Brussels, as this was the first time that some progress has been made and Greece had submitted a plan that was closer to creditors' demands. The two sides were in a tense, five-month negotiation and now they appear optimistic that a temporary deal could reached later this week. The Dow Jones gained more than 0.5% on Monday with the top performer being Goldman Sachs Group Inc (NYSE:GS) which gained 1.48%, while worst performer was Cisco Systems Inc (NASDAQ:CSCO) dropping 0.31%. For today reports on durable goods orders, manufacturing activity and new home sales from the U.S. will be in focus.
Pivot: 17915
Support: 17915; 17830; 17735
Resistance: 18220; 18280; 18330
Scenario 1: Long positions above 17915 with targets @ 18220 & 18280 in extension.
Scenario 2: Below 17915 look for further downside with 17830 & 17735 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Facebook (NASDAQ:FB) climbed nearly 3% on reports that the company is surpassing Google (NASDAQ:GOOGL)'s YouTube in terms of market share for online video advertising. Research firm Apere estimated Facebook has an audience size of 1.4 billion monthly active users compared to YouTube's 1.3 billion.
Pivot: 77
Support: 77; 73.3; 70.35
Resistance: 2135; 2144; 2152
Scenario 1: Long positions above 77 with targets @ 86.2 & 89.5 in extension.
Scenario 2: Below 77 look for further downside with 73.3 & 70.35 as targets.
Comment: The RSI is bullish and calls for further upside.
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