iFOREX Daily Analysis : September 16, 2015
iFOREX | Sep 16, 2015 05:04AM ET
The dollar held modest gains against against the other major currencies on Tuesday, despite the release of downbeat U.S. data, as investors continued to focus on the Federal Reserve's upcoming policy statement on Thursday.
But sentiment on the greenback remained vulnerable amid concerns that mixed U.S. economic reports and recent volatility in global financial markets will prompt the U.S. central bank to refrain from hiking interest rates on September.
Today the UK will release the monthly employment report, while the euro zone will produce the revised data on inflation in consumer prices. Later on the Canada is to release reports on manufacturing sales and purchases of foreign securities, while the US is to publish data on inflation in consumer prices.
But all the focus will be on the Fed two days session, to see whether it will raise interest rates for the first time in almost a decade.
EUR/USD
The euro fell considerably on Tuesday to close below 1.13 for the first time in four sessions, as downbeat data on German economic sentiment weighed and as markets awaited the Federal Reserve's highly-anticipated policy statement due on Thursday.
The single currency came under pressure after data earlier showed that the ZEW economic sentiment index for Germany fell to 12.1 in September, from 25.0 the previous month.
In the U.S., data on Tuesday showed that retail sales rose 0.2% in August, compared to expectations for an increase of 0.3%; the Empire State manufacturing index improved to minus 14.67 this month, from minus 14.92 in August; and U.S. industrial production fell 0.4% in August, compared to expectations for a 0.2% downtick.
Pivot:1.1335
Support:1.1251.1211.118
Resistance:1.13351.1371.14
Scenario 1:Short positions below 1.1335 with targets @ 1.125 & 1.121 in extension.
Scenario 2:Above 1.1335 look for further upside with 1.137 & 1.14 as targets.
Comment:Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Gold
Gold futures fell mildly on Tuesday, erasing slight gains from one session earlier, as metal traders remained cautious ahead of a critical two-day Federal Open Market Committee meeting beginning on Wednesday.
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Gold traders will now focus on FOMC meeting, to decide whether to turn to gold as “safe heaven” or to invest in the greenback.
Pivot:1110
Support:109810941087.4
Resistance:111011161119
Scenario 1:Short positions below 1110 with targets @ 1098 & 1094 in extension.
Scenario 2:Above 1110 look for further upside with 1116 & 1119 as targets.
Comment:As long as 1110 is resistance, likely decline to 1098.
WTI Oil
U.S. oil prices extended gains in Asia on Wednesday on an unexpected stockpile draw and higher gasoline prices, while international crude markets remained weak on the back of low growth expectations.
Australian bank Macquarie said that China's economic outlook for the fourth quarter of the year was muted.
Price rose after industry group the American Petroleum Institute (API) reported a 3.1 million-barrel crude drawdown last week, versus analyst expectations for a build. A surge in American gasoline prices was also supportive.
Outside the United States, international crude markets were weaker largely because of high supplies from the Organization of the Petroleum Exporting Countries (OPEC) clashing with slowing demand, especially in Asia.
Oil markets will be keeping a close eye on Washington policymakers in the next two days, as the U.S. Fed begins a two-day session to decide whether it will raise interest rates for the first time in almost a decade.
Pivot:44.33
Support:44.3343.943.4
Resistance:45.4645.8846.4
Scenario 1:Long positions above 44.33 with targets @ 45.46 & 45.88 in extension.
Scenario 2:Below 44.33 look for further downside with 43.9 & 43.4 as targets.
Comment:The RSI is mixed to bullish.
Dow Jones
U.S. stocks rallied sharply on Tuesday reversing territory midway through the session, ahead of the start of a critical two-day Federal Open Market Committee meeting on Wednesday.
The Dow Jones Industrial Average and the NASDAQ Composite index each rose by more than 1% during yesterday's session, while the S&P 500 Composite index also posted considerable gains on a bullish day for the major indices.
Also the Asian shares followed Wall Street higher on Wednesday, albeit in thin volume, and short-term U.S. bond yields held near 4 1/2-year highs, as investors braced for the possibility of the first interest rate hike in the United States in almost a decade.
Pivot: 17570
Support: 15370 14765 14200
Resistance: 17570 18350 18650
Scenario 1: Short positions below 17570 with targets @ 15370 & 14765 in extension.
Scenario 2: Above 17570 look for further upside with 18350 & 18650 as targets.
Comment: The RSI is below its neutrality area at 50%
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