IForex Daily : April 21, 2014
iFOREX | Apr 21, 2015 03:33AM ET
The dollar gained some ground against most currencies on Monday, recovering from previous week's disappointing U.S. data, in a session with no major U.S. data to be released. However, sentiment on the dollar remains vulnerable after a recent batch of weak economic indicators, that lowered expectations for higher U.S. interest rates. Meanwhile, uncertainty over Greece's bailout negotiations with its creditors remains in focus in the week ahead, fuelling fears that Greece could be forced out of the euro zone. China's central bank on Sunday reduced the amount of cash that banks must hold as reserves in a move to help spur lending and tackle slowing economic growth. This improved outlook for the equities market.
EUR/USD
The euro fell slightly against the dollar on Monday halting the recent rise, on continued uncertainty and a potential default by Greece on its debt obligation. Officials in Athens on Monday reportedly issued a decree to local governments forcing them to transfer all cash balances to the Greek Central Bank, in advance of a €770 million obligation that is due to the International Monetary Fund in May. The effort could raise about €2 billion, according to multiple reports. For today, in the euro zone, the ZEW Institute is to report on German economic sentiment.
Pivot
1.068
Support
1.0735
1.068
1.062
Resistance
1.085
1.089
1.0955
Scenario 1: Short positions below 1.0785 with targets @ 1.068 & 1.062 in extension.
Scenario 2: Above 1.0785 look for further upside with 1.085 & 1.089 as targets.
Comment: The pair remains under pressure.
XAU/USD
Gold prices fell below $1,200 once more on Monday as investors moved into equities, while neglecting the precious metal. New York Fed Governor William Dudley said that he is hopeful that data will support raising interest rates later this year. But even so, US monetary policy will still not be tight. "Rather, we will simply be moving from an extremely accommodative monetary policy to one that is only slightly less so," said Dudley in what will be the last comments from a Fed offical before next week's FOMC meeting". Investors will be watching closely on Greece's negotiations with its creditors and for the possibility of a potential default.
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Pivot
1203
Support
1189
1183
1178
Resistance
1203
1209
1212.5
Scenario 1: Short positions below 1203 with targets @ 1189 & 1183 in extension.
Scenario 2: Above 1203 look for further upside with 1209 & 1212.5 as targets.
Comment: As long as 1203 is resistance, expect a return to 1189.
OIL/USD
Oil prices rose on Monday after oil services firm Genscape reported a drop of more 900,000 barrels at the Cushing, Oklahoma delivery point for U.S. crude oil last week. The drop in inventories outweighed pressure from near record high production in Saudi Arabia. Tensions in the Middle East and a drop in the number of rigs drilling for oil in the United States also provide support in prices. Inventory data from the API will be closely watched today, while Wednesday, the U.S. government is to release data U.S on oil inventories.
Pivot
55
Support
55
53.6
51.45
Resistance
58
60
61.2
Scenario 1: Long positions above 55 with targets @ 58 & 60 in extension.
Scenario 2: Below 55 look for further downside with 53.6 & 51.45 as targets.
Comment: A support base at 55 has formed and has allowed for a temporary stabilisation.
DOW JONES
The Dow Jones ended sharply higher on Monday after China moved to stimulate its slowing economy while investors bought technology stocks on cautious optimism and upcoming earnings reports. China's central bank on Sunday reduced the amount of cash that banks must hold as reserves in a move to help spur lending and tackle slowing economic growth. The outlook for technology companies' profits has improved modestly following better than expected results from Intel (NASDAQ:INTC), Netflix (NASDAQ:NFLX) and Check Point reports, which beat expectations. Other corporations reporting earnings this week include major technology names Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL), Qualcomm (NASDAQ:QCOM), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN).
Pivot
17585
Support
17585
17040
16330
Resistance
18290
18900
19200
Scenario 1: Long positions above 17585 with targets @ 18290 & 18900 in extension.
Scenario 2: Below 17585 look for further downside with 17040 & 16330 as targets.
Comment: The RSI is above its neutrality area at 50%.
IBM (NYSE:IBM)
IBM reported its 12th straight drop in quarterly revenue as it shed unprofitable businesses to focus on cloud-computing, however the earnings were better than expected helped by sales of its new mainframe and cloud-computing services. IBM climbed to $166.41 on our platform following the earnings release. The stock has dropped 14 percent in the past year as a strong dollar continued to drag on IBM's results, with a very negative impact on sales, the company said.
Pivot
165
Support
153.4
150.5
139.65
Resistance
165
172.2
179
Scenario 1: Short positions below 165 with targets @ 153.4 & 150.5 in extension.
Scenario 2: Above 165 look for further upside with 172.2 & 179 as targets.
Comment: As long as 165 is resistance, look for choppy price action with a bearish bias.
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