The dollar extended gains against the other majors currencies on Thursday, after the European Central Bank’s latest policy decision and positive a U.S. jobless claims report.
The euro weakened broadly after the ECB said at its monthly policy meeting that it would extend its asset purchase program for an additional nine months.
Beyond the program’s scheduled end in March 2017, the central bank said net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary. In addition, the ECB left its benchmark interest rate unchanged at a record-low of zero, in line with forecasts.
In the U.S., the Labor Department said initial jobless claims fell by 10,000 to 258,000 in the week ending December 2, in line with expectations.
Today the U.S. is to round up the week with a preliminary reading on consumer sentiment for December from the University of Michigan.
The euro surged before a press briefing by the European Central Bank earlier on Thursday, but declined immediately after that, and settled a bit lower for the day, closing at 1.0615, down 0.1%.
The euro dropped after the European Central Bank extended asset purchases until the end of next year and President Mario Draghi said cuts to the size of the program should not be viewed as tapering.
The ECB said it will reduce its asset buys to 60 billion euros from next April from the current 80 billion euros, and extend purchase by an extra nine months from March.
It also reserved the right to increase the size of purchases once again. Forecasts of European inflation of 1.7% by the end of 2019 were not in alignment with the ECB’s target rate of under 2%.
Investors think ECB policy is likely to remain loose for some time, with an interest rate hike not anticipated for years.
Pivot:1.0635Support:1.0571.05351.0505Resistance:1.06351.0681.071Scenario 1:short positions below 1.0635 with targets at 1.0570 & 1.0535 in extension.Scenario 2:above 1.0635 look for further upside with 1.0680 & 1.0710 as targets.Comment:the RSI broke below a bullish trend line.
Gold
The price of gold dropped on Thursday, the precious metal settled at 1172.49 for the day, down by $5.10, or 0.43%.
During November, gold had its worst month since 2013. The downward trend may be continuing this month, as investors worry about the impact of an interest rate hike by the U.S. Federal Reserve Bank this month. The commodity dropped by more than $100 per ounce last month.
The dollar is also impacting the price of gold. Traders view the 1170.00 level as a "critical support" measure for gold.
Today the U.S. is to round up the week with a preliminary reading on consumer sentiment for December from the University of Michigan, which will be closely watched by metal traders, to gain more info on the strength of the greenback.
Pivot:1173.5Support:116211571150Resistance:1173.511801188Scenario 1:short positions below 1173.50 with targets at 1162.00 & 1157.00 in extension.Scenario 2:above 1173.50 look for further upside with 1180.00 & 1188.00 as targets.Comment:technically the RSI is below its neutrality area at 50.
WTI Oil
Oil prices regained some of yesterday's losses to settle above $50 a barrel on Thursday.
Market investors turned their attention to a planned meeting between OPEC and non-OPEC producers to discuss coordinating cuts in production.
Market momentum from last week’s decision to slash output by the OPEC has waned.
The price rally that came after the Vienna deal has slowed. U.S. crude futures dropped as low as $49.77 per barrel during Thursday's session, after scattered reports that Russian producers may seek to postpone the parley this weekend with OPEC players.
Today Baker Hughes will release weekly data on the U.S. oil rig count. While tomorrow OPEC is to hold a meeting with non-OPEC members in Vienna, to finalize the details of its oil output cut agreement.
Pivot:50.25Support:3934.426Resistance:61.77077.5Scenario 1:long positions above 39.00 with targets at 61.70 & 70.00 in extension.Scenario 2:below 39.00 look for further downside with 34.40 & 26.00 as targets.Comment:Crude oil broke above its 20-week and 50-week moving averages, which play support roles now. The RSI is supported by a rising trend line. Additionally, 39 is playing a key support role, which should limit the downside potential.
US 500
U.S. stocks were higher after the close on Thursday, as gains in the Basic Materials, Financials and Oil & Gas sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 0.32% to hit a new all time high, while the S&P 500 index climbed 0.15%, and the NASDAQ Composite index climbed 0.27%.
Today the U.S. is to round up the week with a preliminary reading on consumer sentiment for December from the University of Michigan, which will be closely watched by traders, to gain more info on the strength of the greenback.
Pivot: 2185 Support: 2185 2148 2080 Resistance: 2250 2300 2350 Scenario 1: long positions above 2185.00 with targets at 2250.00 & 2300.00 in extension. Scenario 2: below 2185.00 look for further downside with 2148.00 & 2080.00 as targets. Comment: the RSI is bullish and calls for further upside. The 20-day simple moving average is in support.