IForex Daily : April 29, 2014
iFOREX | Apr 29, 2015 03:46AM ET
The dollar dropped lower against most other currencies on Tuesday, after data showed that U.S. consumer confidence fell unexpectedly in April, due to increased worries over the strength of the economy. The Conference Board reported the consumer confidence index fell to 95.2 in April, below the forecast of 102.5 and down from 101.4 in March. Inflation rate expectations were the lowest since February 2007.The report stated that confidence deteriorated due to the recent weakness in labor market performance. Further pressure on the dollar came from Wednesday's Federal Reserve rate statement where according to recent disappointing reports a rate hike is highly unlikely. For Wednesday the U.S will also publish preliminary data on first quarter economic growth. Investors were also looking ahead to the outcome of the upcoming U.K. general elections on May 7, which could result in an unstable coalition government, which could act as a drag on growth.
EUR/USD
The euro reached a three-week high against the dollar on Tuesday after data that showed U.S. consumer confidence fell last month adding to concerns that economic recovery is losing strength. Further pressure on the dollar came after recent disappointing reports on employment, retail sales and industrial production have lowered expectations for a potential interest rate hike sooner than expected. In the Greek front, changes in the Greek team negotiating with the country's international lenders by Prime Minister Alexis Tsipras on Monday fuelled hopes that a deal can be reached in time to avoid bankruptcy. In the euro area, Germany is to release preliminary data on consumer inflation. The U.S. is to publish preliminary data on first quarter economic growth in addition to a report on pending home sales. Later in the day the Federal Reserve is to announce its monetary policy decision.
Pivot
1.09
Support
1.09
1.0855
1.0815
Resistance
1.1035
1.11
1.1155
Scenario 1: Long positions above 1.09 with targets @ 1.1035 & 1.11 in extension.
Scenario 2: Below 1.09 look for further downside with 1.0855 & 1.0815 as targets.
Comment: The pair stands above its support.
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XAU/USD
Gold prices posted a sharp rise on Tuesday after weak consumer confidence data weakened the dollar and boosted demand for the metal. Investors are now focusing on the outcome of the Federal Open Market Committee's two-day meeting where the Fed could offer hints on the timing of a highly-anticipated interest rate hike. Due to recent disappointing data expectations are that the committee will use cautious language. In addition, today the U.S. is to publish preliminary data on first quarter economic growth and a report on pending home sales.
Pivot
1199
Support
1199
1088
1180
Resistance
1216
1224
1230
Scenario 1: Long positions above 1199 with targets @ 1216 & 1224 in extension.
Scenario 2: Below 1199 look for further downside with 1188 & 1180 as targets.
Comment: The RSI is mixed.
OIL/USD
Crude oil prices were trading between gains and losses on Tuesday after U.S. industry supply data from the API showed a rise in crude oil inventories by 4.2 million barrels added to concerns that the market is oversupplied with the fuel while conflicts in Yemen become more intense providing strong support to prices. Saudi air strikes coupled with fire from Iran Revolutionary Guard are increasing geopolitical tensions in OPEC's largest producer of crude which could cause significant supply disruptions. For today investors will be following inventory figures from the U.S. Department of Energy.
Pivot
57.85
Support
56.1
55.75
55.13
Resistance
57.85
58.4
58.8
Scenario 1: Short positions below 57.85 with targets @ 56.1 & 55.75 in extension.
Scenario 2: Above 57.85 look for further upside with 58.4 & 58.8 as targets.
Comment: As long as 57.85 is resistance, likely decline to 56.1.
DOW JONES
The Dow ended the day higher on Tuesday supported by strong earnings from Merck (NYSE:MRK) and gains in IBM (NYSE:IBM) after it boosted its dividend. Adding to market volatility just before the close, shares of Twitter (NYSE:TWTR) dropped by approximately 24 percent after results were published lower than expected. IBM shares rose 1.9 percent, giving the Dow a very strong boost. The company increased its quarterly dividend by 18 percent, the biggest increase in five years. Shares also closed above their 200-day moving average, a bullish technical signal. Today, investors will be focusing on the FOMC monetary policy statement while the U.S. is to publish preliminary data on first quarter economic growth and a report on pending home sales.
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 supported by a bullish trend line.
Twitter Inc reported quarterly revenue that was way below Wall Street estimates and reduced its full-year forecast because of weak demand for its new direct response advertising, sending shares on a sharp drop of more than 20 percent on Tuesday. Twitter forecast 2015 revenue of $2.17 billion to $2.27 billion, down from its earlier forecast of $2.3 billion to $2.35 billion. Twitter said its new direct response ads, intended to encourage clicking on a link to an advertiser's website, but did not generate the revenue expected. Advertisers limited their spending and the click rate on Twitter's ads fell, but the company expects improvement in the second half of 2015.
Pivot
128
Support
128
125.8
123.1
Resistance
131.4
132.9
133.6
Scenario 1: under pressure below 54.2.
Scenario 2: the upside breakout of 54.2 would call for 56.7 and 58.2.
Comment: the RSI is below its neutrality area at 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the share stands below its 20 and 50 day MA (respectively at 51.25 and 49.38). Finally, Twitter is trading below its lower daily Bollinger band (standing at 49.39).
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