iFOREX Daily Analysis : August 09, 2016

The dollar moved higher against the other major currencies on Monday, as Friday’s upbeat U.S. nonfarm payrolls data continued to support. Trading was expected to remain quiet, with no major U.S. economic reports expected throughout the day.

Elsewhere, the pound moved lower, remaining under pressure after the Bank of England cut interest rates to a record-low 0.25% last week, in a move to buffer the economy from a downturn following the Brexit vote.

Always on Monday, the Australian dollar was stronger and the New Zealand currency held steady, after data showed that China’s imports declined by 12.5% in July and exports fell by 4.4% last month, both higher than analysts’ expectations. China is Australia’s biggest export partner and New Zealand’s second biggest export partner.

Elsewhere, the commodity-related loonie strengthened mildly, as oil prices moved back higher on Monday, amid renewed hopes for an agreement among exporters to freeze output. But gains were capped after Statistics Canada reported that building permits dropped 5.5% in June, confounding expectations for a 1.5% rise.

Today the U.K. is to publish data on industrial and manufacturing production, as well as a report on the trade balance, which will be carefully watched by investors.

EUR/USD

The euro fell slightly on Monday, on a quiet day of trading, as investors continued to raise their bets on a 2016 interest rate hike from the Federal Reserve, following a robust jobs report from the Labor Department at the end of last week.

The currency pair traded in a tight range between 1.1072 and 1.1105 before closing the U.S. afternoon session down 0.03% on the day.

Elsewhere, a high court in Italy ruled on Monday that Matteo Renzi can proceed with a referendum, scheduled between October and December, on a package of constitutional amendments that could lead to the prime minister's resignation if the measures are defeated. It will be much like June's Brexit decision, and the vote could wind up having widespread ramifications for future trade policies in Europe.

EUR/USD Chart

Pivot: 1.112Support: 1.104 1.101 1.0975Resistance: 1.112 1.115 1.1175Scenario 1: short positions below 1.1120 with targets @ 1.1040 & 1.1010 in extension.Scenario 2: above 1.1120 look for further upside with 1.1150 & 1.1175 as targets.Comment: the RSI shows downside momentum.

Gold

Gold inched down on Monday, amid a moderately stronger dollar, as investors continued to stake their bets on a 2016 interest rate hike from the Federal Reserve following the robust U.S. monthly jobs report.

The precious metal continue to drop also in Asia on Tuesday, as prices data from China showed a gain in July that kept any views on immediate easier policy prospects in check.

Now metal traders are awaiting for China’s data on industrial production and fixed asset investment, which will be released on Friday.

Gold Chart

Pivot: 1346Support: 1325 1321 1313Resistance: 1346 1354 1359Scenario 1: short positions below 1346.00 with targets @ 1325.00 & 1321.00 in extension.Scenario 2: above 1346.00 look for further upside with 1354.00 & 1359.00 as targets.Comment: the RSI broke below a rising trend line.

WTI Oil

Crude futures rose sharply on Monday, hitting near two-week highs, as investors reacted to bullish comments from OPEC president Mohammed bin Saleh al-Sada on the possibility of an accord between member states at a meeting in Algeria in late-September, aimed at stabilizing the volatile global energy market.

The statement was released days after data indicated that hedge funds increased their short positions in WTI crude last week to the highest level in a decade.

Today energy traders will focus on the API weekly report on U.S. oil supplies.

WTI Oil Chart

Pivot: 42Support: 42 41 40.4Resistance: 43.8 44.5 45.2Scenario 1: long positions above 42.00 with targets @ 43.80 & 44.50 in extension.Scenario 2: below 42.00 look for further downside with 41.00 & 40.40 as targets.Comment: a support base at 42.00 has formed and has allowed for a temporary stabilisation.

US 500

U.S. stocks fell slightly on Monday, erasing some of their sharp gains from late last weeks, as investors resumed their pattern of range-bound sideways trading, which has proliferated for the majority of the last month following a Post-Brexit surge at the start of the summer.

The Dow Jones Industrial Average fell 0.08%, suffering marginal losses one session after soaring more than 1% last Friday, meanwhile the NASDAQ Composite index lost 0.15%, and the S&P 500 Composite index dipped 0.09%, each one retreating from record closing highs from the prior session.

On the S&P 500, stocks in six of 10 sectors closed in the red, as stocks in the Health Care, Telecom and Consumer Services industries lagged.

This week investors will continue to focus on U.S. economic reports, with Friday’s retail sales data in the spotlight.

US 500 Chart

Pivot: 2105 Support: 2105 2042 1992 Resistance: 2190 2220 2250 Scenario 1: long positions above 2105.00 with targets @ 2190.00 & 2220.00 in extension. Scenario 2: below 2105.00 look for further downside with 2042.00 & 1992.00 as targets. Comment: the RSI is bullish and calls for further upside.