The dollar fell against most major currencies on Wednesday, pressured by minutes of the U.S. Federal Reserve's meeting last month that urged for caution about future interest rate hikes. Minutes from the Fed's March policy meeting suggested that the central bank appears unlikely to raise interest rates before June due to concerns over the limited ability to tackle a global economic slowdown. The minutes showed debate over whether they might increase rates in April with "a number" of policymakers arguing that headwinds to growth would probably persist, and many urging caution about raising rates. At the meeting, the FOMC voted 9-1 to hold its benchmark Federal Funds Rate at a targeted range between 0.25 and 0.50%. In contrast with the Fed, Bank of Japan policymakers will likely debate the possibility of easing further at their April 27-28 meeting, as recently downbeat economic data has failed to reinforce their expectations that a moderate economic recovery would lift inflation towards their 2 percent target. Today, The U.K. is to release data on house price inflation, the European Central Bank is to publish the minutes of its latest meeting and the U.S. is to publish the weekly report on initial jobless claims.
The euro posted a slight increase against the dollar on Wednesday after the minutes from the Federal Reserve's March meeting on Wednesday afternoon which showed that the U.S. central bank, was divided on whether it will be appropriate to raise short-term interest rates at the end of this month. The currency pair traded in a tight range between 1.1327 and 1.1431, before settling 0.14% higher for the session. When the Federal Open Market Committee last met in mid-March, several members wanted to consider the possibility of raising interest rates at the meeting, while leaving a potential rate hike on the table when they meet again on April 26-27. The majority of the members expressed caution at raising rates prematurely due to concerns that global economic headwinds will only subside slowly in the near future. Today, the European Central Bank is to publish the minutes of its latest meeting and the U.S. is to publish the weekly report on initial jobless claims.
Pivot: 1.1365Support: 1.1365 1.1325 1.131Resistance: 1.1435 1.146 1.148Scenario 1: long positions above 1.1365 with targets @ 1.1435 & 1.1460 in extension.Scenario 2: below 1.1365 look for further downside with 1.1325 & 1.1310 as targets.Comment: the RSI is mixed to bullish.
Gold
Gold posted a slight drop yesterday, erasing some of its gains from the previous session's rise, as investors traded cautiously. Gold is coming off its strongest quarter in three decades, where it gained 15% as investors shifted their attention into the safe-haven asset due to rising concerns of a China-driven global economic slowdown. In its last meeting, the FOMC lowered its long-term interest rate and inflation forecasts reducing the number of projected rate hikes this year from four to two thus providing some support to the metal. In the last FOMC meeting, members voted 9-1 to hold interest rates at a targeted range between 0.25 and 0.50%. For today, the focus is shifted on the jobless claims report from the U.S.
Pivot: 1232Support: 1218.5 1214.5 1208.5Resistance: 1232 1238 1243Scenario 1: short positions below 1232.00 with targets @ 1218.50 & 1214.50 in extension.Scenario 2: above 1232.00 look for further upside with 1238.50 & 1243.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1232.00.
WTI Oil
Crude oil prices gained by more than 5% on Wednesday, rebounding from 1-month lows, as inventories posted their biggest weekly decline last week since January, temporarily easing concerns related to the excessive supply glut on domestic energy markets. On Wednesday morning, the U.S. Energy Department's Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that crude inventories nationwide decreased by 4.94 million barrels for the week ending on April 1, falling sharply below consensus estimates of a build of 2.85 million barrels. However, at 529.9 million barrels, U.S. crude oil inventories are still at historically high levels for this time of year. Oil prices are expected to remain in a holding pattern heading into a highly-anticipated meeting in Doha on April 17, when Russia, Saudi Arabia and two other OPEC producers could freeze production at their respective levels from January.
Pivot: 37.16Support: 37.16 36.5 35.88Resistance: 38.39 39 39.85Scenario 1: long positions above 37.16 with targets @ 38.39 & 39.00 in extension.Scenario 2: below 37.16 look for further downside with 36.50 & 35.88 as targets.Comment: the RSI is mixed with a bullish bias.
US 500
U.S. stocks jumped on Wednesday, supported by gains in healthcare shares after the collapse of the $160 billion merger of Pfizer and Allergan (NYSE:AGN_pa) and by a rise in energy shares. Further support came from the minutes from the most recent Federal Reserve meeting which suggested that the Fed was unlikely to raise interest rates before June. U.S. drugmaker Pfizer Inc (NYSE:PFE) and Ireland-based Allergan Plc called off their merger after new U.S. Treasury rules aimed at curbing tax-cutting inversion deals. The Dow Jones industrial average was up 0.64 percent, the S&P 500 gained 1.05 percent and the Nasdaq Composite added 1.59 percent. The S&P had rallied 13 percent in the previous seven weeks, thanks to stabilizing oil prices and reduced concerns about China's economy. Investors will soon turn their attention to first-quarter S&P 500 earnings, which are estimated to be down 7.4 percent from a year ago, according to Thomson Reuters data.
Pivot: 2020 Support: 2020 1970 1950 Resistance: 2080 2100 2130 Scenario 1: long positions above 2020.00 with targets @ 2080.00 & 2100.00 in extension. Scenario 2: below 2020.00 look for further downside with 1970.00 & 1950.00 as targets. Comment: the RSI has struck against a major resistance around 70% and is reversing down. But the 20-day simple moving average is trending higher and plays a suppport role.