The dollar rose against the yen on Tuesday, after Japan’s finance minister warned that officials are prepared to intervene if the country’s currency continued to strengthen.
Japanese Finance Minister Taro Aso said Monday that financial authorities are prepared to intervene in the currency market if excessive moves in the yen continued. Late last month the U.S. Treasury Department added Japan to a watch list of countries it is monitoring to gauge whether their foreign exchange policies provide an unfair trade advantage. Speaking Tuesday, Aso reiterated that Tokyo will intervene in the currency market if "one-sided" moves in the yen persist. Also yesterday, Japan’s Economy Minister Nobuteru Ishihara said he was closely watching financial markets after the yen’s gains last week.
Elsewhere on Tuesday morning, the U.S. Department of Labor said Tuesday that job openings in March rose by 149,000 on a seasonally-adjusted basis, lifting the job opening rate by 0.1% to 3.9%. Hiring rates, though, fell slightly by 0.1% to 3.7%, providing indications that employers experienced difficulty finding qualified workers. Separately, the Federal Reserve Bank of Atlanta said Tuesday that its GDP Now Forecast model now sees an increase of 2.2% in second quarter GDP, up from estimates of 1.7% on May 4. Earlier, New York Fed president William Dudley noted in a closely-watched speech in Zurich that he doesn't believe the dollar would falter if other top currencies materialized as alternatives to the greenback as the world's reserve currency.
The single currency inched down on Tuesday, extending losses from the last several sessions, as upbeat labor and GDP data in the U.S. bolstered the greenback, slightly increasing expectations for multiple interest rate hikes from the Federal Reserve this year.
In the euro zone, data on Tuesday showed that German industrial output fell more than expected in March, but exports rose strongly. German industrial production fell by 1.3% in March, the largest monthly decline since August 2014. A separate report showed that Germany’s exports rose by a larger-than-forecast 1.9% in March while imports fell by 2.3%, widening the trade surplus to €23.6 billion.
Today investors’ focus will be on U.K. data on industrial production.
Pivot: 1.142Support: 1.134 1.131 1.128Resistance: 1.142 1.1445 1.148Scenario 1: short positions below 1.1420 with targets @ 1.1340 & 1.1310 in extension.Scenario 2: above 1.1420 look for further upside with 1.1445 & 1.1480 as targets.Comment: The pair has formed a bearish channel.
Gold
Gold stabilized on Tuesday, one day after suffering their worst one-day decline in two months, as investors reacted to relatively flat China inflation data and an unexpected rise in U.S. job openings in a pair of closely watched reports.
The precious metal wavered between $1,258.00 and $1,269.45 an ounce, before settling down $4.85 or 0.38% on the session.
In overnight asian trading, China's National Statistics Bureau said its Consumer Price Index for April rose 2.3% on an annual basis, in line with March's reading. The overall index received a boost from a surge in food prices, which rose 7.4% over the last year, amid continual increases in pork prices. At the same time, the Producer Price Index (PPI) decreased by 3.8% on an annual basis in April, but at a lower rate than in March when it fell sharply by 4.3%. Still, producer prices in China have fallen on a yearly basis for each of the last 50 months.
Pivot: 1261.5Support: 1261.5 1256.48 1251.23Resistance: 1277 1282.25 1289.5Scenario 1: long positions above 1261.50 with targets @ 1277.00 & 1282.25 in extension.Scenario 2: below 1261.50 look for further downside with 1256.48 & 1251.23 as targets.Comment: the RSI is mixed with a bullish bias.
WTI Oil
Crude futures rose sharply, amid heavy short covering, one day after suffering one of its worst single-day sessions on the calendar year, as investors continued to react to devastating wildfires in Canada and widespread changes in the leadership structure of Saudi Arabia's leading state-run oil company.
WTI crude for June delivery traded in a broad range between $43.04 and $44.76 a barrel, before settling up 1.22 or 2.81% on the session.
But crude prices fell in Asia on Wednesday after a bearish industry report on U.S, stockpiles, particularly a smaller than expected build in gasoline supplies ahead of the summer driving season. The API said crude oil stock rose 3.450 million barrels last week, well above the 300,000 build seen. Distillates stocks dropped 1.360 million barrels, compared with a fall of 1.3 million barrels seen, while gasoline stock rose 217,000 barrels, below the 800,000 barrel gain seen.
Today investors’ focus will be on EIA report, for fresh supply-and-demand signals.
Pivot: 44Support: 44 43.54 43Resistance: 45.1 45.78 46.08Scenario 1: long positions above 44.00 with targets @ 45.10 & 45.78 in extension.Scenario 2: below 44.00 look for further downside with 43.54 & 43.00 as targets.Comment: the RSI is mixed to bullish.
US 500
U.S. stocks surged on Tuesday, closing the day near session-highs, as a rally in persistently sluggish oil prices and financial stocks provided a boost to the major indices.
The Dow Jones Industrial Average soared 1.26%, while the NASDAQ Composite index gained 1.26%, as stocks on Wall Street closed higher for the third consecutive session.
At one point, shares in McDonald’s Corporation, Home Depot Inc (NYSE:HD) and Johnson & Johnson (NYSE:JNJ) all reached all-time intraday highs.
The S&P 500 Composite index, meanwhile, added 1.25%, as all 10 sectors closed in the green. Stocks in the Basic Materials, Industrials and Energy industries led, each gaining more than 1% on the session.
Now investors will be looking to Friday’s U.S. data on retail sales, producer prices and consumer sentiment, for fresh indications on the health of the world’s largest economy.
Pivot: 2033 Support: 2033 2006 1970 Resistance: 2100 2111 2130 Scenario 1: long positions above 2033.00 with targets @ 2100.00 & 2111.00 in extension. Scenario 2: below 2033.00 look for further downside with 2006.00 & 1970.00 as targets. Comment: the RSI is mixed to bullish. The 50-period simple moving average is in support.