IForex Daily : July 03, 2014

The dollar lost ground on Thursday, as the release of weak economic reports related to employment and factory orders lowered expectations for an early rate hike in the U.S. Factory orders fell by 1.0% in May, compared to expectations for a 0.5% decline while the Labor Department reported that the economy added 223,000 jobs in June, compared to expectations for jobs growth of 230,000. The dollar was also pressured by an increase in initial jobless claims by 10,000 when analysts expected a drop by 1000, however, the unemployment rate of the country fell below expectations to 5,3% from 5,5% when analysts expected a reading of 5,4% thus providing some support to market sentiment. Elsewhere, the IMF issued a strong message to Europe saying that Greece needs up to €60billion of extra funds over the next three years and large-scale debt relief to create "a breathing space" and stabilise the economy. Fund officials said they would not be prepared to put a proposal for a third Greek bailout to discussion unless it included both a commitment to economic reform and debt relief. Tsipras, who is campaigning for a no vote in the referendum on Sunday welcomed the IMF's intervention while sending the message that "Voting no to a solution that isn't viable doesn't mean saying no to Europe". With U.S. markets closed for tomorrow's Independence Day, all eyes are now turned towards Greece and the potential outcome of the referendum.

EUR/USD

The euro gained against the dollar on Thursday, following the worse than expected factory orders data as well as the slightly weaker than expected new jobs and jobless claims data, while the drop in the dollar was somewhat limited by a drop in the unemployment rate to 5,3% when analysts had expected a drop to 5,4%. The EUR/USD pair shows little volatility on Friday as investors remain cautious ahead of the weekend's Greek referendum and on whether or not the country's should accept its creditor's bailout terms. For today, the euro zone is to round up the week with a report on retail sales while U.S. markets are to remain closed for the July 4th holiday.

Pivot: 1.112

Support: 1.103; 1.098; 1.095

Resistance: 1.112; 1.1155; 1.121

Scenario 1: Short positions below 1.112 with targets @ 1.103 & 1.098 in extension.
Scenario 2: Above 1.112 look for further upside with 1.1155 & 1.121 as targets.
Comment: As long as 1.112 is resistance, likely decline to 1.103.

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OIL

Oil prices ended a second day in negative territory after Oil Services firm Baker Hughes (NYSE:BHI) said in its weekly report on Thursday that oil rigs in the U.S. last week increased by 12 to 640, ending 29 weeks of consecutive drops. A week earlier, U.S. oil rigs fell by three to 628 the lowest total since August, 2010. One day earlier, WTI prices fell by 4% to close under $57 a barrel after an unexpected increase in U.S. inventories last week. Prices received some support by a weakening dollar, however investors remain cautious ahead of the weekend's Greek referendum and on developments from Iran regarding an agreement on its Nuclear program.

Pivot: 58

Support: 55.8; 55.25; 54.6

Resistance: 58; 58.95 ; 59.7

Scenario 1: Short positions below 58 with targets @ 55.8 & 55.25 in extension.
Scenario 2: Above 58 look for further upside with 58.95 & 59.7 as targets.
Comment: The break below 58 is a negative signal that has opened a path to 55.8.

DOW JONES

The main U.S. stock indices ended in negative territory on Thursday following the weakness in factory orders and employment data and the flat wage growth from the U.S. and as losses in the Financials, Healthcare and Basic Materials led the way. The Dow Jones Industrial Average lost 0.16% with the worst performer of the for the day to be EI du Pont de Nemours and Company (NYSE:DD) which fell 2.34%, while Intel Corporation (NASDAQ:INTC) rose 1.24% and Visa Inc (NYSE:V) was up 0.57. With markets closed on Friday for tomorrow's Independence Day, investors will be waiting for Sunday's referendum in Greece, where citizens will decide whether to accept the latest bailout package. Greek Prime Minister Alexis Tsipras, is campaigning for a no vote and promoting the message that even with a "no" vote, the country will remain in Europe.

Pivot: 17800

Support: 17573; 17495; 17427

Resistance: 17800; 17890; 17891

Scenario 1: Short positions below 17800 with targets @ 17573 & 17495 in extension.
Scenario 2: Above 17800 look for further upside with 17890 & 17891 as targets.
Comment: The break below the support at 17800 triggered a bearish acceleration to the support at 17573.

INTEL

Intel, who supplies chips for more than 80% of the personal computer market has posted a rise yesterday, as major changes are coming to the company's top management. In a message to employees, CEO Brian Krzanich said Intel president Renee James would be stepping down together with Arvind Sodhani, the president of Intel Capital and his replacement is Intel's President of Mergers and Acquisitions Wendell Brooks, who will assume an expanded role. Krzanich is looking to expand beyond Intel's core businesses by providing chips for smart cars and so-called Internet of Things appliances. That was a major strategic motivator behind Intel's purchase last month of Altera (NASDAQ:ALTR), in an all-cash transaction valued at a whopping $16.7 billion.

Written By: iFOREX