iFOREX Daily Analysis : September 29, 2015
iFOREX | Sep 29, 2015 03:56AM ET
The dollar erased gains against the other major currencies on Monday, after data showed that U.S. pending home sales dropped unexpectedly last month, although comments by Federal Reserve official William Dudley added to expectations for a near-term U.S. rate hike.
The U.S. National Association of Realtors said that pending home sales dropped 1.4% in August, confounding expectations for a 0.4% uptick after a 0.5% rise the previous month. Earlier on Monday, the U.S. Bureau of Economic Analysis reported that personal spending rose 0.4% in August, beating expectations for an increase of 0.3%. The report also showed that personal income increased by 0.3% last month, compared to expectations for a 0.4% gain. Meanwhile, New York Federal Reserve Bank President William Dudley said the Fed remains on track for a rate hike this year and could move as soon as the upcoming meeting in October.
Today in the euro zone Germany and Spain are to release preliminary data on consumer price inflation, while the U.K. is to report on net private lending. Later on Canada is to publish data on raw material price inflation, the U.S. is to report on the trade balance and consumer sentiment, and Bank of England Governor Mark Carney is due to speak at an event in London.
But more than everything else investors await the release of September inflation data in the euro zone on Wednesday and the non-farm payrolls data on Friday, for further indications on the strength of the global economy.
EUR/USD
The euro rose sharply on Monday, as a sell-off among commodities and U.S. equities weighed heavily on the dollar.
Following a four-day losing streak last week, the euro has now closed higher against the dollar in four of the last five sessions.
Investors now await the release of September inflation data in the euro zone on Wednesday, for further indications on the strength of the global economy. Analysts expect to see a 0.1% gain for the month, following a 0.1% increase in August.
Pivot:1.121
Support:1.1211.11851.1145
Resistance:1.12951.1331.1355
Scenario 1:Long positions above 1.121 with targets @ 1.1295 & 1.133 in extension.
Scenario 2:Below 1.121 look for further downside with 1.1185 & 1.1145 as targets.
Comment:The RSI is bullish and calls for further upside.
Gold
Gold futures fell sharply on Monday amid a wavering dollar, as relatively optimistic personal income data reinforced the argument for an imminent interest rate hike by the Federal Reserve.
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But gold prices held mostly steady on Tuesday in Asia, as demand for the safe-haven strengthened after International Monetary Fund head Christine Lagarde said in an interview on Monday that the IMF is likely to revise downwards its estimates for global economic growth due to slower expansion in emerging economies.
Today investors’ focus will be on the U.S. report on trade balance and consumer sentiment, to gain more informations on the strength of the economy.
Pivot:1139
Support:112811211116
Resistance:113911481157
Scenario 1:Short positions below 1139 with targets @ 1128 & 1121 in extension.
Scenario 2:Above 1139 look for further upside with 1148 & 1157 as targets.
Comment:As long as 1139 is resistance, likely decline to 1128.
WTI Oil
Crude oil prices fell more than 2% on Monday, reversing gains from late last week, amid mounting concerns that an interest rate hike by the Federal Reserve will weigh on energy prices worldwide.
Meanwhile, at the 70th session of the United Nation's General Assembly in New York, both U.S. president Barack Obama and Iran president Hasan Rouhani devoted significant portions of their speeches to the ramifications of an implementing Iranian Nuclear Deal.
Iran is reportedly hoarding 30 million barrels of crude ready for export shortly after a deal is implemented. It has been estimated that Iran could increase oil exports by as much as one million barrels per day within a year of the final approval of the agreement. So the deal is widely considered bearish for crude.
But crude oil prices rebounded in Asia on Tuesday, ahead of today’s American Petroleum Institute release on U.S. crude stockpiles, and before Wednesday data from the U.S. Department of Energy.
Pivot:45.3
Support:43.743.242.35
Resistance:45.345.7546.4
Scenario 1:Short positions below 45.3 with targets @ 43.7 & 43.2 in extension.
Scenario 2:Above 45.3 look for further upside with 45.75 & 46.4 as targets.
Comment:As long as 45.3 is resistance, likely decline to 43.7.
NASDAQ 100
U.S. stocks finished sharply lower on Monday and were on track for their worst quarter in four years, as investors worried about the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.
The Nasdaq lost 3%, the S&P 500 dropped more than 2% and the Dow Jones industrial average fell 1.92%.Much of the damage came from pharmaceutical and biotech stocks, after Democratic lawmakers on Monday attacked "massive" price increases of two heart drugs from Canada's Valeant Pharmaceuticals International Inc (NYSE:VRX). The broad healthcare sector and China are hurting the market.
Investors will now scrutinize non-farm payrolls data on Friday, for further indications on the strength of the global economy.
Pivot: 4437
Support: 1926 1907 1895
Resistance: 4017 3788 3700
Scenario 1: Short positions below 4437 with targets @ 4017 & 3788 in extension.
Scenario 2: Above 4437 look for further upside with 4690 & 4816 as targets.
Comment: The RSI is bearish and calls for further decline.
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