Positive Employment Data Brings Wave Of Optimism After Weak Quarter
iFOREX | Jun 09, 2015 05:13AM ET
The dollar fell against most major currencies on Monday, as investors proceeded to cash out their profits from the recent rise, after Friday's upbeat employment and wages data. The positive data and especially the wage growth brought a wave of optimism in the market that the economy is back on track after a weak first quarter. In the Eurozone, German bond yields rose once more, approaching last week's nine month high, providing strong support to the euro. However, the single currency remains vulnerable as markets are tense after comments by German Chancellor Angela Merkel that "there isn't much time left" to reach an agreement on a deal with Greece, in order to unlock more financial aid before the country goes bankrupt. Some of the highlights in the G7 summit in Germany include David Cameron denying that he made comments that other ministers will lose their position if they refuse to back him in a referendum for the nation to leave the EU in 2017, while U.S. president Barack Obama urged both sides in the Greek Debt negotiations to work collaboratively to reach a deal.
EUR/USD
The euro recovered once more against the dollar on Monday, supported by a rise in German bond yields that approached nine month highs. In a day that was missing any significant economic releases from the U.S., the dollar moved lower due to investor profit taking and after President Obama told the G7 summit in Germany that the strong dollar was a problem. The pair remains in a vulnerable place as negotiations between Greece and its lenders continue and as German Chancellor Angela Merkel warns that "there isn't much time left" until the country runs out of money. For today, investors will be watching closely on revised data for first quarter economic growth in the region.
Pivot: 1.118
Support: 1.118; 1.108; 1.1015
Resistance: 1.1385; 1.1465; 1.152
Scenario 1: Long positions above 1.118 with targets @ 1.1385 & 1.1465 in extension.
Scenario 2: Below 1.118 look for further downside with 1.108 & 1.1015 as targets.
Comment: The RSI is bullish and calls for further upside..
XAU/USD
After reaching their lowest level in almost three months on Friday, gold prices started to recover on Monday, after a drop in the dollar caused by investors locking in profits and by a statement of U.S. President Barrack Obama that a strong dollar could be a problem. The recovery in gold prices continues on Tuesday, as weak inflation data from China indicates that easing policies will probably continue in a country which is one of the top buyers of the precious metal. In the week ahead, investors will be focusing on Thursday's U.S. retail sales report for May, as well as Friday's consumer sentiment data, for fresh indications on the strength of the economy and the timing of a potential rate increase.
Get The News You Want
Pivot: 1169
Support: 1169; 1162; 1155
Resistance: 1187.2; 1193.4, 1196.3
Scenario 1: Long @ 1178 with targets @ 1187.2 & 1193.4 in extension.
Scenario 2: Below 1169 look for further downside with 1162 & 1155 as targets.
Comment: The RSI is well directed.
OIL/USD
Crude oil prices ended the day in negative territory on Monday, as markets have not yet digested the result of the OPEC meeting, where production levels were decided to remain unchanged at 30 million barrels per day for at least another six months. Additional pressure on the price of crude oil, came after China reported some weak trade balance data, including a decline of 25% in exports, 17% in imports and a widening of the trade deficit to $59.5 billion, up from $34.2 billion. Moving forward, energy traders will focus on Iranian exports as the nation is in the process of completing a nuclear deal with Western powers later this month. Once a deal is reached, Iranian officials said at the meeting that it could double exports.
Pivot: 57.79
Support: 57.79; 57.26; 56.85
Resistance: 59.25; 60; 60.85
Scenario 1: Long positions above 57.79 with targets @ 59.25 & 60 in extension.
Scenario 2: Below 57.79 look for further downside with 57.26 & 56.85 as targets.
Comment: A support base at 57.79 has formed and has allowed for a temporary stabilisation.
DOW JONES
The main U.S. stock indices fell on Monday as concerns about Greece and increasing speculation of a potential rate hike as soon as September, weighed on stock prices. Despite the positive employment and wage growth data, potentially higher interest rates pushed the Dow dipped into negative territory for 2015. The top performer on the Dow was Exxon Mobil Corporation (NYSE:XOM) which posting a 0.87% rise after reports on a possible acquisition of a smaller rival if crude prices remain low. The worst performer on the Dow was Intel Corporation (NASDAQ:INTC) which dropped by 1.63%. Investors will now be focusing on Thursday's U.S. retail sales report for May, as well as Friday's consumer sentiment data, for fresh indications on the strength of the economy.
Pivot: 17330
Support: 17330; 17360; 17040
Resistance: 18350; 18900; 19230
Scenario 1: Long positions above 17730 with targets @ 18350 & 18900 in extension.
Scenario 2: Below 17730 look for further downside with 17360 & 17040 as targets.
Comment: Eventhough a continuation of the consolidation cannot be ruled out, its extent should be limited.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.