IForex Daily : July 22, 2014
iFOREX | Jul 22, 2015 05:03AM ET
The U.S. dollar lost some of its recent gains against most currencies on Tuesday, after reaching five-week highs against the yen as investors are now locking profits due to market turmoil fading and market focus now shifted on the Federal Reserve and the expected rate hike in in September as inflation is set to climb toward its target and unemployment is expected to drop below 5 percent. After hitting a three-month low against the dollar the euro traded between 1.0812 and 1.0967 during Tuesday's session. In Athens, the parliament will vote for the second portion of austerity measures deemed necessary to reopen talks on Wednesday. Immediately after the vote, negotiations with the lenders will start, with August 20th being the final date. Stocks pulled back from recent highs on Tuesday as a series of disappointing earnings reports sent markets into the red. For today, the U.K. is to release a report on public sector borrowing while in the week ahead, market players will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy. For today, the Bank of England is to publish the minutes of its July policy meeting while the U.S. is to release private sector data on existing home sales as well as a government report on crude oil inventories.
EUR/USD
The euro climbed to one-week highs against the U.S. dollar, as investors appear to be locking in profits from the recent rise in the dollar and as Greek parliament is set to vote for the second part of bailout reforms on Wednesday. Immediately after the vote, negotiations with the lenders will start, with August 20th being the final date. The pair is now facing support at 1.0853, the lowest level of the last two months, as investors focus on data out of the U.S. that could confirm that the long awaited Fed rate hike will take place in September. For today, the U.S. is to release private sector data on existing home sales.
Pivot: 1.087
Support: 1.087; 1.081; 1.0735
Resistance: 1.0985; 1.1035; 1.1065
Scenario 1: Long positions above 1.087 with targets @ 1.0985 & 1.1035 in extension.
Scenario 2: Below 1.087 look for further downside with 1.081 & 1.0735 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
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GOLD
Gold prices continue their drop on Wednesday, with prices down 2.5% this week and 5.8% this month as investors continued to cash out of the market on expectations of higher interest rates in the U.S. in September. The precious metal doesn't pay interest or dividends and would struggle to compete with bonds and stocks that do when rates climb. In addition, gold like all commodities is receiving strong pressures from the recent strength in the dollar. In the week ahead, gold traders will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
Pivot: 1110
Support: 1087; 1080; 1073
Resistance: 1110 ;1119;1130
Scenario 1: Short positions below 1110 with targets @ 1087 & 1080 in extension.
Scenario 2: Above 1110 look for further upside with 1119 & 1130 as targets.
Comment: As long as 1110 is resistance, likely decline to 1087.
OIL
Crude oil prices moved sligthly higher on Tuesday, recovering some of the losses suffered over the past week, though still remaining close to four-month lows. Pressure was added on prices after API said crude oil industrial inventories rose by 2.3 million barrels in the U.S. last week, well above a drop of 1.9 million barrels forecasted. However, WTI crude oil gained 0.4% to $50.36 a barrel. According to Commerzbank (XETRA:CBKG) analysts "The prospect of ongoing oversupply on the oil market if Iran resumes its supply is continuing to weigh on prices.". On Wednesday, the focus is shifted towards the more closely-watched data by the U.S. Department of Energy.
Pivot: 51.6
Support: 49.7; 49; 48;
Resistance: 51.6; 52.5; 53.3;
Scenario 1: Short positions below 51.6 with targets @ 49.7 & 49 in extension.
Scenario 2: Above 51.6 look for further upside with 52.5 & 53.3 as targets.
Comment: As long as 51.6 is resistance, likely decline to 49.7.
NASDAQ
Stocks pulled back from recent highs on Tuesday as a series of disappointing earnings reports from Telecoms, Industrials and Utilities sectors sent markets into the red. At the close in New York, the Dow Jones Industrial Average fell 1.00%, while the S&P 500 index declined 0.43%, and the NASDAQ Composite index fell 0.21%. The worst performers were Seanergy Maritime Holdings Corp which was down 23.58% and CytRx Corporation which lost 20.00%. Reports from Apple (NASDAQ:AAPL) dissapointed investors despite sales being up 35% and as its revenue in the current quarter could come below Wall Street projections. For today, the focus will remain in upcoming earnings reports form the U.S., while the U.S. is due to release private sector data on existing home sales.
Pivot: 4690
Support: 4280; 4203; 4078
Resistance: 4690; 4816; 4904
Scenario 1: Short positions below 4690 with targets @ 4280 & 4203 in extension.
Scenario 2: Above 4690 look for further upside with 4816 & 4904 as targets.
Comment: The index currently faces a challenging resistance area at 4690.
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