Wall Street closed in green territory Monday, as enthusiasm over a burst of corporate deals overshadowed global economic worries that were amplified by a rating agency’s downgrade of Greece. After last week’s fall below 12,000, its first since March, the Dow Jones Industrial Average on Monday made a bid to reclaim that level before closing under it. The index of established, large U.S. companies ended up 1.06 points to 11,952.9. The S&P 500 Index ended up 0.85 points to 1,271.83, while the Nasdaq Composite Index ended down 4.04 points at 2,639.69.
Just as we predicted crude-oil futures extended losses Monday, falling 2% as investors continued to doubt the health of the global recovery and waited for U.S. and overseas macroeconomic data later in the week. Crude for July delivery declined $1.99 to $97.30 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active oil contract since May 17. Oil futures also failed to catch any tailwind from a weaker dollar. The U.S. currency fell against major rivals as investors appeared to be more optimistic about Greece’s sovereign-debt woes and the euro gained.
Euros gained strength yesterday and once we broke 1.4385 we have carried on higher for the next resistance level of 1.4445. We may well find a small amount of sellers waiting around 1.4440 area and they will try and drive us lower back through 1.4385 to 1.4325 area. Around 1.4385 zone, buyers will be waiting thus sellers are advised to cover all shorts to here. We would expect this lower support level to hold and for buyers to come back into the market and try and hold this up
Today’s Important Economic Announcements (GMT)
8:30 AM GBP CPI y/y
12:30 PM CAD Capacity Utilization Rate
12:30 PM USD Core Retail Sales & PPI m/m
2:00 PM USD Business Inventories
7:50 PM CAD BOC Gov Carney Speaks
10:45 PM NZD Core Retail Sales q/q
EUR/USD
The European single currency has once more shrugged off news of Greece falling to S&P’s lowest rating qualification, officially now the lowest-rated country in the world. EUR/USD has reversed downward tendencies from early trade, and is moving, as the report is being written, in upward motion from 1.4375 low to just peak at 1.4437, a couple of pips past its prior’s day high. Only clearance of 1.4460 will open the doors to see the pair extending gains, with 1.4550 as next strong resistance area, as per past week daily lows. Nevertheless, we expect the euro to weaken in the next 24 hours.
Stop Loss: 1.4472
Take Profit: 1.4382
Crude Oil
Following the OPEC meeting from last week, in which OPEC ministers didn’t reach an agreement as to the whether to raise oil production quota, it’s currently reported that Saudi Arabia may raise its oil production quota in the months to come. Saudi Arabia was the leading country that wanted to raise oil production, on the other hand, Iran and Venezuela led the charge in keeping OPEC’s oil production quota at the current level. OPEC will also publish its monthly oil report; this report may indicate the current oil production of major OPEC countries and the changes in demand for oil. Clearly the market is reacting to the likely rise in supply. Our target lies at $96.40.
Stop Loss: 99.00
Take Profit: 96.40
USD/JPY
Last week, the yen was up although its gains were modest and it fell against sterling which was buoyed by interest rate expectations on the eve of key inflation releases. Still trading in quite limited daily ranges, the pair bearish tone persists despite mostly flat indicators. Technical analysts have been warning risk remains to the bottom side, and the latest price action certainly does not conflict with such view. After touching the upper border of the price channel on 4-hour chart, USD/JPY dropped from 80.49. The fall could possibly be resumption of downtrend. Deeper decline to re-test 80.10 support would likely be seen later today.
Stop Loss: 80.49
Take Profit: 80.10
Published by www.SolidityBrokers.com
