The U.S. dollar rose to fresh four-month highs against most currencies on Wednesday, extending recent gains as foreign exchange traders await a critical monetary policy meeting from the European Central Bank for indications on the long-term direction of the market. On Wednesday, economic indicators showed that consumer confidence in the EU fell sharply dropping to the lowest level since November, 2014. The Governing Council is widely expected to remain inactive at Thursday's meeting, amid a relative lack of data following the Brexit market shock. The Federal Open Market Committee (FOMC) will also convene for its two-day July meeting in the middle of next week. On Wednesday, the dollar rose as much as 1.50% against the Turkish Lira to a record-high of 3.0974 after Standard & Poor's lowered Turkey's credit rating deeper into junk territory. Turkey president Recep Erdogan declared a three-month State of Emergency earlier on the day in the wake of last week's failed coup attempt. For today, the U.K. is to produce figures on retail sales and public sector borrowing. The ECB is to announce its monetary policy decision. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi. The U.S. is to release data on jobless claims, existing home sales and manufacturing activity in the Philadelphia region.
The dollar reached near four-month highs against the other major currencies on Wednesday, as global growth concerns still weighed on market. The IMF cut the U.S. growth forecast to 2.2% from 2.4%, but said the Brexit impact on the U.S. economy could not be assessed, and explained that the reduction was due to weaker than expected first quarter gross domestic product. In addition, the IMF cut its U.K. growth forecast to 1.7% from the prior 1.9% for this year and slashing 2017 growth to 1.3% from April’s estimate of 2.2% due to the Brexit. GBP/USD climbed 0.53%, off the one-week low of 1.3064 hit overnight. The pound found support however after the U.K. Office for National Statistics said on Wednesday that the unemployment rate fell to 4.9% in the three months to May from April’s reading of 5.0%. For today, the U.K. is to produce figures on retail sales and public sector borrowing while The U.S. is to release data on jobless claims, existing home sales and manufacturing activity in the Philadelphia region.
Pivot: 1.312Support: 1.312 1.306 1.301Resistance: 1.328 1.333 1.34Scenario 1: long positions above 1.3120 with targets @ 1.3280 & 1.3330 in extension.Scenario 2: below 1.3120 look for further downside with 1.3060 & 1.3010 as targets.Comment: the RSI is bullish and calls for further upside.
Gold
Gold fell as much as 1% in Wednesday's session, as the dollar fluctuated around four-month highs, ahead of a critical interest rate decision by the European Central Bank's Governing Council on Thursday afternoon in Frankfurt. On Wednesday, economic indicators showed that consumer confidence in the European Union fell sharply adding support to the precious metal. Investors who are bullish on gold are mostly interested in a delayed tightening of monetary policy by the Fed. For today, the U.S. is to release data on jobless claims, existing home sales and manufacturing activity in the Philadelphia region.
Pivot: 1323.5Support: 1307 1300 1294Resistance: 1323.5 1330.5 1336Scenario 1: short positions below 1323.50 with targets @ 1307.00 & 1300.00 in extension.Scenario 2: above 1323.50 look for further upside with 1330.50 & 1336.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1323.50.
WTI Oil
Oil prices rose as much as 1 percent on Wednesday, lifting U.S. crude from two-month lows, after the U.S. government reported a ninth straight week of crude inventory drops, easing some concerns in a market worried about a glut. U.S. gasoline prices, however, hit four-month lows after the data from the U.S. Energy Information Administration also showed a surprise build in supplies of the motor fuel despite forecasts of record driving in the U.S. for this summer. The EIA said crude inventories fell 2.3 million barrels in the week to July 15, close to analysts' expectations for a decrease of 2.1 million barrels. Gasoline stocks rose 911,000 barrels, compared with forecasts for stocks to remain unchanged.
Pivot: 46.1Support: 45.25 44.56 44.2Resistance: 46.1 46.38 46.8Scenario 1: short positions below 46.10 with targets @ 45.25 & 44.56 in extension.Scenario 2: above 46.10 look for further upside with 46.38 & 46.80 as targets.Comment: the upward potential is likely to be limited by the resistance at 46.10.
US 30
U.S. stocks rose moderately on Wednesday, as the Dow Jones Industrial Average closed higher for a ninth consecutive session matching its longest winning streak since March, 2013. Supported by gains from Microsoft Corporation (NASDAQ:MSFT), the Dow also hit an all-time record high for the eighth time in nine sessions. Microsoft, surged 6.08%, posting one of its strongest one-day sessions since October. On Tuesday, Microsoft exceeded analysts' earnings and revenue estimates after sales of its closely-watched cloud product more than doubled on the quarter. For the three-month period, Microsoft's sales for its Azure, cloud-based segment surged 102% extending sharp gains from its previous quarter. The worst performer was Walt Disney Company (NYSE:DIS) which fell by 1.22%. Stock traders are focusing on the Federal Open Market Committee meeting in the middle of next week.
Pivot: 17700 Support: 17700 17065 16500 Resistance: 18900 19300 20000 Scenario 1: long positions above 17700 with targets @ 18900 & 19300 in extension. Scenario 2: below 17700 look for further downside with 17065 & 16500 as targets. Comment: the RSI is bullish and calls for further upside.