Monday saw the greenback ending lower against most of its major rivals

EUR/USD

Monday saw the greenback ending mostly lower against most of its major rivals, weighed by poor local data and a strong recovery in worldwide stocks, which diluted early risk aversion sentiment. The EUR/USD pair posted  a modest advance, with the common currency limited due to the Whit Monday holiday, as many local markets remained closed. 

In the data front, the US released its NY Empire manufacturing index that showed that in May 2016, business activity declined sharply with the headline general business conditions index, falling nineteen points to -9.0, quite a disappointment considering data improved by the end of the past week. This Tuesday, the US will release its April inflation figures, expected to advance due to higher gasoline headlines. The country will also release some housing data for the same month, also expected to have improved from March figures. If that is the case, the greenback could extend its last week rally, as Monday pullback has been quite shallow, although gains will likely remain limited ahead of the main event of the week, the release of US FOMC Minutes next Wednesday, expected to provide crucial information on where the FED is heading to. 

The technical setup for the EUR/USD pair continues favoring the downside, given that the price remained well below former lows in the 1.1370 region, and in the 4 hours chart, the technical indicators have resumed their declines within negative territory, after correcting the oversold conditions reached last Friday. In the same chart, the 20 SMA has extended its decline further below the 100 and 200 SMAs, all of them above the current level, indicating selling interest is still strong. A break through 1.1280, the immediate support, may lead to a test of the 1.1240/60 region, en route to the 1.1200 figure.   

Support levels: 1.1280 1.1240 1.1200

Resistance levels: 1.1340 1.1370 1.1410

USD/JPY

The USD/JPY pair traded in a tight 60 pips range in this first day of the week, regaining the 109.00 level  in the US afternoon, but contained ahead of the Asian session, when Japan will release the first estimate of its Q1 GDP, expected to result at 0.1%, after falling 0.3% in the last quarter of 2015. Markets however, consider quite possible  that the third-largest economy has likely shrunk in the first three months of the year, which may fuel speculation that the BOJ will have no choice but to add stimulus in their upcoming June meeting. In the meantime, the short term picture is bullish, although there's a clear absence of strength in technical readings, as in the 1 hour chart, the price is barely a few pips above a flat 20 SMA, whilst the technical indicators are advancing modestly from their mid-lines, pretty much looking neutral at the time being. In the 4 hours chart, the technical picture is quite alike, with the technical indicators barely aiming higher around their mid-lines, and the price stuck around a bearish 200 SMA. Last week high at 109.54 stands also for the 61.8% retracement of the latest daily bearish run, and a break above it is required to confirm a continued advance that can extend up to 110.60. 

Support levels: 108.60 108.20 107.70

Resistance levels: 109.55 110.10 110.60

GBP/USD

The GBP/USD pair bounced from a fresh 4-week low set at 1.4332 recovering briefly above the 1.4400 level in the US afternoon, to end up settling the day around this last. The macroeconomic calendar in the UK will be pretty busy this week, staring this Tuesday, with the release of  PPI and CPI figures for April, generally expected to have worsen compared to March ones. Given that soft data has been a constant in the UK ever since the year started, disappointing figures should not be a surprise, but indeed will weigh on the local currency, and result in fresh lows for the GBP/USD pair. The intraday recovery was not enough to change the negative technical tone, as in the 4 hours chart, the technical indicators have turned south within bearish territory, with the Momentum indicator reaching fresh monthly lows. In the same chart, the price is stuck around a horizontal 20 SMA, and right below the 20 SMA, coming from above, with the two moving averages lacking directional strength, but maintaining the overall risk towards the downside, particularly on renewed selling interest below the 1.4270 level, the immediate support. 

Support levels:  1.4370 1.4320 1.4285 

Resistance levels: 1.4450 1.4490 1.4525

AUD/USD

The Aussie started the day with a sour tone, gapping lower against the greenback amid poor Chinese data released over the weekend, but later managed to recover ground, helped by an intraday rally in gold prices. Nevertheless, the AUD/USD pair pared gains at 0.7308, as the commodity retreated. The RBA will publish the Minutes of its latest meeting during the upcoming Asian session, and investors will be scrutinizing the wording, looking for clues as to the timing of another rate cut, after the Central Bank surprised markets with a 0.25bps cut earlier this month. Should Governor Stevens leaves doors opened for more cuts, the market will likely run to price it in, and the pair will likely plunge. Short term, the downside is favored as in the 1 hour chart, the price is currently aiming to break below its 20 SMA, whilst the technical indicators are about to cross their mid-lines with nice bearish slopes. In the 4 hours chart, the 20 SMA capped the upside, whilst the technical indicators turned south within negative territory, after a limited upward correction from oversold levels, also in line with further falls. The immediate resistance, on the other hand, stands at 0.7330, the 50% retracement of this year's decline broken last week. 

Support levels: 0.7250 0.7210 0.7165

Resistance levels: 0.7330 0.7370 0.7410

Dow Jones

Wall Street rallied strongly this Monday, with the DJIA up 175 points to end at 17,710.71, led by a 3% gain in crude oil, underpinning the energy-related sector. The Nasdaq advanced 1.22% to end at 5,775.56, while the S&P gained 20 points to 2,066.66. The technology sector also gained with Apple adding 4% Warren Buffett's Berkshire Hathaway disclosed it had taken a stake in the company. The Dow erased most of last week losses, but the recovery was not enough to confirm an upward continuation, given that in the daily chart, the rally stalled right below a bearish 20 SMA, currently around 17,779, whilst the technical indicators have posted a modest recovery, but remain within negative territory. In the shorter term, the 4 hours chart shows that the index  advanced above a now flat 20 SMA, but remains below the 100 and 200 SMAs, whilst the technical indicators have turned south around their mid-lines, maintaining a neutral stance. 

Support levels: 17,675 17,610 17,530

Resistance levels: 17,779 17,846 17,928

FTSE 100

The Footsie gained 12 points this Monday, ending the day at 6,151.40 as a strong rally in oil prices helped the index swing into positive territory. Most gains, however, came from the mining-related sector, with Anglo American up 5.4% after a double ratings upgrade from Bank of America Merrill Lynch, while Fresnillo added 3.05% on a positive earnings report. The index stands at the higher end of last week's range, having added additional 20 points after the close, and in the daily chart, with the upside seen limited, as the 200 DMA caps around 6,185 and the technical indicators remain below their mid-lines, albeit with modest bullish slopes. In the 4 hours chart, the recovery has extended above the 20 SMA that anyway lacks clear directional strength, whilst the technical indicators have tuned flat around their mid-lines, confirming bulls are still reluctant to add positions at current levels. 

Support levels: 6,123 6,056 6,006 

Resistance levels: 6,195 6,256 6,310

DAX

European equities saw limited activity this Monday, as many countries had a bank holiday, including Germany.  European equities closed generally lower, with the pan-European Stoxx 600 0.5%, in a thinned trading day. The DAX latest closed was registered at 9,952.90 last Friday, when technical figures favored the downside as in the daily chart, the benchmark stands a few points above a bearish 100 DMA,  whilst the latest daily recoveries stalled further below the 20 and 200 DMAs, maintaining the risk towards the downside. Indicators in the daily chart hold below their mid-lines, but with limited downward strength at the time being. In the 4 hours chart, the bearish potential remains firm in place, with the index unable to recover above its 20 SMA, and the indicators also holding within negative territory, but lacking clear directional strength. The index may open higher this Tuesday, particularly if Asian shares track US Monday's advance and edge higher. 

Support levels: 9,829 9,755 9,680 

Resistance levels: 9,924 10,005 10,077

Nikkei

The Nikkei 225 advanced 54 points or 0.33% to close the day at 16,466.40, after being up by 1.0%, fueled early trading by speculation that the BOJ will postpone a consumption tax increase. The index however, pared gains as the Japanese yen was incapable to extend losses beyond the 109.00 level against the greenback.  Also, concerns over companies' profits forecast for this fiscal year weighed on the benchmark. The Nikkei recovered in after-hours trading, as Wall Street closed sharply higher, and points for a strong opening above 16,600. The late recovery, however, is not yet enough to confirm an upward extension, as in the daily chart, the index is right below its 20 and 100 SMAs, both capping the upside ever since late April, whilst the technical indicators posted modest recoveries, but are still well below their mid-lines. In the shorter term, and according to the 4 hours chart, the technical stance is neutral,  with the technical indicators turning slightly lower around their mid-lines, and the index still stuck around the moving averages that remain within a limited range and flat. 

Support levels: 16,585 16,504 16,447 

Resistance levels: 16,697 16,780 16,868 

Gold

Spot gold rose to its highest in two-weeks  in London bullion trade Monday, printing $1288.68 a troy ounce, before erasing all of its daily gains ahead of the close, to end up pretty much flat around 1,272.00. The sharp decline has been attributed to the strong tone in US stocks following a soft opening,  although the sudden slide has come a bit as a surprise for gold bulls, given the soft tone of the greenback against other assets. From a technical point of view, the price keeps pressuring a bullish 20 SMA in the daily chart, but the bearish potential has increased, as the Momentum indicator has crossed below its 100 level,  and maintains a bearish slope, whilst the RSI consolidates in neutral territory. In the 4 hours chart,  the technical stance is neutral, with the price now hovering around a flat 20 SMA, and the technical indicators having retreated back towards their mid-lines, with a limited bearish tone. 

Support levels: 1265.60 1,256.80 1,242.50 

Resistance levels: 1,279.05 1,287.50 1,295.50

WTI Crude Oil

Crude oil prices surged to fresh yearly highs, with WTI futures roughly 3.0% higher this Monday, reaching $47.82 a barrel, as news pointing for output disruptions suggest that supply and demand will come to balance sooner than expected, according  to Goldman Sachs. The multinational investment banking said that the oil market is shifting into a  deficit "much earlier than expected" as demand strengthens while another Nigerian company came off line, following last week's shout down by Exxon Mobil. Holding near the mentioned high, oil is poised to extend its rally this week, with speculative interesting now pointing to a test of the 50.00 region. In the daily chart, the Momentum indicator has bounced from its mid-line and heads higher with limited upward strength, but the RSI indicator heads strongly higher  approaching overbought levels, whilst the 20 SMA accelerated its advance below the current level, all in line with a continued advance. In the 4 hours chart, the technical picture is quite alike, with indicators heading north within bullish territory, and the 20 SMA now providing a dynamic support around 46.50.

Support levels:  47.10 46.10 45.90 

Resistance levels: 47.90 48.60 49.20