The dollar posted a small change against most major currencies on Wednesday, after data showed that the U.S. economy contracted less than initially estimated in the first quarter. The Commerce Department reported on Wednesday that gross domestic product contracted at a rate of 0.2% in the three months ending March 31, in line with expectations and compared to a previous estimate of a 0.7% contraction. In Eurozone, data on Wednesday showed the German IFO business climate index dropping to four-month lows in June, adding strong pressures on the single currency as worries increase over the health of the euro zone's largest economy. In Greece, the country's' economy minister, George Stathakis, said "two or three" areas still needed to be addressed, but added that he was confident a deal would be reached by the time EU leaders meet on Thursday. For today The Gfk Group is to report on German business climate, while the U.S. is to release the weekly report on initial jobless claims as well as data on consumer spending.
After posting its biggest drop in months on Tuesday, retreating by 1.5%, the euro recovered slightly on Wednesday, as optimism for a potential deal on the Greek debt remains, despite the fact that as emergency meetings in Brussels did not give much meaningful outcomes. The country remains under pressure as time running short for delivering the due payment of € 1.5 billion to the IMF on June 30. In the U.S. front, the U.S. Bureau of Economic Analysis upgraded its estimate of GDP growth for the first quarter from an initial 0.7% contraction, but still projected negative growth for the period at an annual rate of 0.2%. For today The Gfk Group is to report on German business climate, while the U.S. is to release the weekly report on initial jobless claims as well as data on consumer spending.
Pivot: 1.123
Support: 1.1135; 1.108; 1.105
Resistance: 1.123; 1.1285; 1.135
Scenario 1: Short positions below 1.123 with targets @ 1.1135 & 1.108 in extension.
Scenario 2: Above 1.123 look for further upside with 1.1285 & 1.135 as targets.
Comment: As long as 1.123 is resistance, expect a return to 1.1135.
OIL/USD
U.S. crude oil prices fell sharply on Wednesday, posting a 1,5% drop as the market was disappointed by data from the Energy Information Administration showing that while U.S. crude inventories dropped by 4.9 million barrels, U.S. gasoline stocks climbed 680,000 barrels, not a very positive sign for the summer driving season. Prices received further pressure from the recent recovery in the dollar, with investors focus shifted on today's jobless claims and consumer spending data from the U.S. for further indications on the future direction of the U.S. monetary policy.
Pivot: 60.9
Support: 59.6; 59.3; 58.98
Resistance: 60.9; 61.55; 61.8
Scenario 1: Short positions below 60.9 with targets @ 59.6 & 59.3 in extension.
Scenario 2: Above 60.9 look for further upside with 61.55 & 61.8 as targets.
Comment: Technically the RSI is below its neutrality area at 50.
The main U.S. stock indices fell broadly on Wednesday, after a three-day increase, talks over a Greek debt deal between Greece and creditors ended with no significant outcome. All 10 sectors in the S&P closed in negative, with sectors such as Basic Materials and Health Care industries, each falling by more than 1% and bringing the index down by more than 0.7%. The worst performer was EI du Pont de Nemours and Company (NYSE:DD) which fell by 3.01%. For today traders will be focusing on the weekly report of initial jobless claims as well as data on consumer spending.
Pivot: 2130
Support: 2105; 2088; 2078
Resistance: 2130; 2137; 2144
Scenario 1: Short positions below 2130 with targets @ 2105 & 2088 in extension.
Scenario 2: Above 2130 look for further upside with 2137 & 2144 as targets.
Comment: The immediate trend remains up and the momentum is strong.
MCDONALDS
McDonald's stock has been on a rise for the past week, starting from the $94 level and reaching as high as $ 97.8 yesterday. The U.S. fast-food chain McDonald's Corp (NYSE:MCD) is planning to sell all of its 413 Taiwan-based stores to a franchise operator, the company said in a statement on Thursday. In May, new chief executive officer Steve Easterbrook said he would sell restaurants to franchisees as part of a turnaround plan for the fast-food chain. McDonald's is also looking to bounce back from a food safety scare that hit its China business last year.
Pivot: 94.2
Support: 94.2; 91.5; 86.75
Resistance: 101.1; 104; 107.5
Scenario 1: Long positions above 94.2 with targets @ 101.1 & 104 in extension.
Scenario 2: Below 94.2 look for further downside with 91.5 & 86.75 as targets.
Comment: The RSI is supported by a rising trend line.