iFOREX Daily Analysis : February 09,2017

The dollar turned lower against other major currencies on Wednesday, but losses were expected to remain limited as political uncertainty in Europe continues to weigh on market sentiment.

Recent polls have shown German Chancellor Angela Merkel falling behind as a candidate from the country's Social Democrats in this year's elections. Polls have also suggested France's Marine Le Pen, who has campaigned pulling the country out of the European Union, is gaining ground.

The yen could be poised for further gains should Trump reiterate his opposition to a strong dollar when he meets Japanese Prime Minister Shinzo Abe at a two-day summit starting on Friday. The dollar gained steadily against the yen last year on expectations that U.S.-Japanese interest rate differentials would widen.

Earlier Wednesday, British Prime Minister Theresa May said that an independent Scotland would not be part of the European Union. The comments came a day after Scotland's parliament rejected May's Brexit plans.

The New Zealand dollar fell after the Reserve Bank of New Zealand (RBNZ) kept rates at a record low of 1.75 percent on Thursday, as expected, and said that any tightening in policy might be at least two years away.

For today, Canada is to report on new house price inflation and the U.S. is to publish data on initial jobless claims while Chicago Fed President Charles Evans is due to speak later in the day.

EUR/USD

The euro reached a one-week low of $1.0640 on Wednesday on heightened European political risks.

The possibility of a Brexit or a shock result in France’s upcoming presidential election weigh on the single currency with far-right representative Marine Le Pen, who has campaigned pulling the country out of the European Union, gaining ground. In addition, German Chancellor Angela Merkel is falling behind as a candidate from the country's Social Democrats in this year's elections.
For the remaining of the week, the attention is shifted towards U.S. initial jobless claims and consumer confidence data.

Pivot: 1.067Support: 1.067 1.064 1.0625Resistance: 1.07 1.0715 1.074Scenario 1: long positions above 1.0670 with targets at 1.0700 & 1.0715 in extension.Scenario 2: below 1.0670 look for further downside with 1.0640 & 1.0625 as targets.Comment: the RSI lacks downward momentum.

Gold

A cautious sentiment is overflowing in the markets with political risk and supply disruptions increasing demand for safe haven assets.
Gold prices rose for the fifth day in a row on Wednesday, extending a rally to a fresh three-month high amid ongoing worries over political risks in Europe and economic uncertainty in the U.S.

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Investors remained focused on French politics, with recent opinion polls showing a lead by far-right National Front leader Marine Le Pen who vowed to pull France out of the euro zone and hold a vote on its membership in the European Union.
Traders also keep an eye on U.S. political risk with President Donald Trump's immigration and other policies.

Pivot: 1236Support: 1236 1230 1227Resistance: 1244 1248 1252Scenario 1: long positions above 1236.00 with targets at 1244.00 & 1248.00 in extension.Scenario 2: below 1236.00 look for further downside with 1230.00 & 1227.00 as targets.Comment: the RSI is bullish and calls for further upside.

WTI Oil

Crude prices settled higher in the U.S. on Wednesday after data on crude oil inventories from the the Energy Information Administration showed a massive build and the third straight weekly increase.

The U.S. Energy Information Administration said on Wednesday that gasoline stocks fell by 869,000 barrels last week to 256.2 million barrels, versus analyst expectations for a 1.1 million-barrel gain. U.S. commercial crude inventories soared by 18.8 million barrels to 508.6 million barrels, according to the EIA.

U.S. bank Goldman Sachs said that high fuel inventories as well as rising U.S. crude production mean that oil markets will remain over-supplied for some time.

In the week ahead, Friday’s oil rig count data from Baker Hughes will remain in focus.

Pivot: 52Support: 52 51.54 51.2Resistance: 52.9 53.39 53.85Scenario 1: long positions above 52.00 with targets at 52.90 & 53.39 in extension.Scenario 2: below 52.00 look for further downside with 51.54 & 51.20 as targets.Comment: the RSI advocates for further advance.

US 500

U.S. stocks were mixed after the close on Wednesday, as gains in the Utilities, Consumer Services and Consumer Goods sectors led shares higher while losses in the Financials, Oil & Gas and Healthcare sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 0.18%, while the S&P 500 index climbed 0.07%, and the NASDAQ Composite index climbed 0.15%.

Some of the best performers of the session were Nike Inc (NYSE:NKE) which rose 2.03%, Wal-Mart Stores Inc (NYSE:WMT) which added 1.38% and Home Depot Inc (NYSE:HD) that was up 0.90%.

The worst performers of the session were JPMorgan Chase & Co (NYSE:JPM) which fell 0.88%, Visa Inc (NYSE:V) that declined 0.80% and Goldman Sachs Group Inc (NYSE:GS) that was down 0.79%.

Ahead in the week U.S. initial jobless claims and consumer confidence data will remain in focus.

Pivot: 2283 Support: 2283 2278.5 2270.75 Resistance: 2294 2296.5 2299 Scenario 1: long positions above 2283.00 with targets at 2294.00 & 2296.50 in extension. Scenario 2: below 2283.00 look for further downside with 2278.50 & 2270.75 as targets. Comment: the RSI lacks downward momentum.

Written By: iFOREX