The dollar trimmed gains against the other major currencies on Thursday, after data showed that U.S. jobless claims rose unexpectedly last week, fueling concerns over the strength of the job market.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 6 increased by 20,000 to 294,000 from the previous week’s total of 274,000, while analysts had expected jobless claims to drop by 4,000 to 270,000 last week.
Meanwhile, the sterling strengthened after the Bank of England said it was holding the benchmark interest rate at 0.50%, in a widely expected move, and to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion. In the separately released inflation report, the BoE cut its growth forecast for the second quarter to 0.3%, lowering its estimate for growth in 2016 to 2.0%. Speaking shortly after, BoE Governor Mark Carney warned that the upcoming June 23 Referendum on the U.K.’s European Union membership had “pushed up uncertainty measures to levels not seen since the euro zone crisis” and defined the vote as the “elephant in the room”.
Today Germany is to release preliminary data on inflation, the euro zone is to release a revised estimate of first quarter economic growth and the U.S. is to round up the week with data on retail sales, producer prices and consumer sentiment.
The euro fell mildly on Thursday, erasing most of its gains from the previous session, as government bond yields remained in range-bound trade and investors awaited the release of a wave of key U.S. economic data at week's end.
For the most part, foreign exchange traders proceeded cautiously on Thursday ahead of the release of monthly retail and consumer reports to close the week. This morning, the U.S. Census Bureau is expected to report a sharp increase in retail sales for the month of April, follow a mild decline a month earlier. Shortly after, the University of Michigan could report a 0.7 increase in the preliminary May reading of its Consumer Sentiment Index, rebounding from a surprising downturn in April. Also on Friday, the U.S. Bureau of Labor Statistics is expected to report a 0.3% increase in its PPI for April, following a 0.1% decline a month earlier. The Core PPI Index is expected to increase 0.1% one month, after falling 0.1% in March.
Pivot: 1.1415Support: 1.134 1.131 1.128Resistance: 1.1415 1.14445 1.1465Scenario 1: short positions below 1.1415 with targets @ 1.1340 & 1.1310 in extension.Scenario 2: above 1.1415 look for further upside with 1.1445 & 1.1465 as targets.Comment: the RSI is badly directed.
Gold
Gold inched down on Thursday, amid a slightly appreciating dollar, as investors awaited the release of a wave of key U.S. economic data at week's end for further signals on the pace of second quarter GDP growth in the world's largest economy.
But global gold demand at the start of 2016 rose at its fastest pace ever on inflows from exchange traded funds (ETFs), according to an industry report released on Thursday. Gold demand increased by 21% year-on-year to 1,290 tons in the first quarter, according to the World Gold Council report, and this was its fastest pace ever for the first three months of the year and the second largest quarter on record. The Council noted that the increase was driven by “huge inflows” into ETFs, “fuelled by concerns around the shifting global economic and financial landscape.”
Pivot: 1279Support: 1256 1250 1241Resistance: 1279 1283 1288Scenario 1: short positions below 1279.00 with targets @ 1256.00 & 1250.00 in extension.Scenario 2: above 1279.00 look for further upside with 1283.00 & 1288.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1279.00.
WTI Oil
U.S. crude futures fluctuated wildly on Thursday, falling off fresh six-month highs, as investors digested reports of a sizable build at the Cushing Oil Hub, along with strong indications of a tightening in the massive gulf between global supply and demand. On Thursday, U.S. crude futures surged above $47 for the first time on the calendar year after forecasts from the influential Paris-based International Energy Agency predicted a further tightening in global supply and demand before the end of the year, easing some fears related to the excessive production glut worldwide. Oil prices turned negative for the session on Thursday afternoon, before recovering just before the close of trading.
Today investors’ focus will be on the OPEC’s oil markets’ monthly assessment and on Baker Hughes weekly data on the U.S. oil rig count. But oil traders are also awaiting the next OPEC meeting scheduled for the 2nd of June, in order to gain fresh information on the dialogue between its members regarding possible market intervention to support the price.
Pivot: 45.58Support: 45.58 44.92 44.05Resistance: 47.04 47.7 48.15Scenario 1: long positions above 45.58 with targets @ 47.04 & 47.70 in extension.Scenario 2: below 45.58 look for further downside with 44.92 & 44.05 as targets.Comment: the RSI is mixed to bullish.
US 500
On Thursday U.S. stocks were mixed during a volatile session, as oil futures wavered from fresh six-month highs and Apple Inc (NASDAQ:AAPL) weighed on the major indices, after briefly touching down to its lowest level in two years.
The Dow Jones Industrial Average gained 0.05%, while the NASDAQ Composite index lost 0.49%, extending losses from the previous session. The S&P 500, meanwhile, fell 0.02%, as four of 10 sectors closed in the red. Stocks in the Technology and the Health Care industries lagged, each losing more than 0.5% on the session. Stocks in the Consumer Goods and Energy sectors led.
Today investors’ focus will be on U.S. data on retail sales, producer prices and consumer sentiment, to gain more information on the strength of the American 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 lacks downward momentum. The 50-period simple moving average is in support.