The dollar continues to rise against most major currencies on Wednesday, despite weak U.S. existing home sales, as expectations for further indications on a more aggressive policy increase ahead of Federal Reserve Chair Janet Yellen’s highly anticipated speech on Friday. The U.S. National Association of Realtors said existing home sales decreased by 3.2% in July to 5.39 million units when the forecast was for a 0.4% decline to 5.51 million units. Markets appear nervous as investors wait to see if Yellen will restate the hawkish view of the economy expressed by Fed officials last week. The yen moved lower in the Asian session on Thursday despite corporate services price data showing a higher than expected gain, as the market is cautious ahead of the anticipated Fed comments at the end of the week. For today, the Ifo Institute is to report on German business climate and the U.S. is to release data on jobless claims and durable goods orders. In addition, the Jackson Hole annual meeting of top central bankers and economists starts in Wyoming from Thursday to Saturday.
GBP/USDThe British pound gained against the dollar, reaching three-week highs at $1.3227. Recent reports of surprisingly stronger-than-expected economic data after Britain's vote to leave the European Union have helped in lowering expectations of further Bank of England monetary easing. For today, the U.S. is to release data on jobless claims and durable goods orders, while later in the day, the Jackson Hole annual meeting of top central bankers and economists starts in Wyoming from Thursday to Saturday. Investors will be watching closely for any comments from the president of the Federal Reserve indicating a rate hike in the near future.
Pivot: 1.32Support: 1.32 1.316 1.312Resistance: 1.3275 1.3305 1.3345Scenario 1: long positions above 1.3200 with targets @ 1.3275 & 1.3305 in extension.Scenario 2: below 1.3200 look for further downside with 1.3160 & 1.3120 as targets.Comment: The pair is trading within a bullish channel.
Gold prices dropped to monthly lows on Wednesday, still remaining in a familiar trading range as market players await for the highly anticipated speech from Federal Reserve Chair Janet Yellen at the end of this week. Yellen may give fresh indications on the timing of the next U.S. rate hike at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, on Friday. The annual Fed symposium has often been used for communicating important policy statements. The meeting starts today and ends on Saturday. For today, gold traders will also be focusing on jobless claims and durable goods orders from the U.S.
Pivot: 1335Support: 1321 1315 1310Resistance: 1335 1340 1345Scenario 1: short positions below 1335.00 with targets @ 1321.00 & 1315.50 in extension.Scenario 2: above 1335.00 look for further upside with 1340.00 & 1345.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1335.00.
Oil prices fell on Wednesday pressured by a bearish inventory report, despite an informal meeting scheduled late next month where major oil producers, led by Saudi Arabia and Russia, will reconsider a collective production freeze in an effort to boost the market. The U.S. Energy Information Administration noted in its weekly report that inventories rose by 2.5 million barrels in the week ended August 19. Market analysts' expected a drop of 0.5 million barrels. Over the past two weeks, crude prices soared almost $10 a barrel, or nearly 25%. Friday’s report by Baker Hughes on active oil rigs count remains in focus for energy traders.
Pivot: 47.7Support: 45.81 45 44Resistance: 47.7 48.34 49.35Scenario 1: short positions below 47.70 with targets @ 45.81 & 45.00 in extension.Scenario 2: above 47.70 look for further upside with 48.34 & 49.35 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
The main U.S. indices posted sharp losses on Wednesday, remaining close to all-time record-highs amid losses in the Healthcare, Basic Materials and Technology sectors which led shares lower. The worst performers were Newmont Mining Corporation (NYSE:NEM) which was down 7.62% in late trade and Freeport-McMoran Copper & Gold Inc (NYSE:FCX) which lost 7.43%. With earnings season reaching its end, investors are now shifting their focus on data from the U.S. that may have an impact on the strength of the dollar. The main focus is on a highly anticipated speech by Federal Reserve President Janet Yellen starting today, as well as on growth data from the U.S. due on Friday.
Pivot: 2175 Support: 2175 2168 2164 Resistance: 2185 2194 2200 Scenario 1: long positions above 2175.00 with targets @ 2185.00 & 2194.00 in extension. Scenario 2: below 2175.00 look for further downside with 2168.50 & 2164.00 as targets. Comment: the RSI is mixed and calls for caution.