The dollar trimmed losses and continued to trade within close distance of a 14-year high against the other majors currencies on Tuesday, after upbeat U.S. data boosted optimism over the U.S. economy and added to expectations for a rate hike by the Federal Reserve.
The U.S. Commerce Department said retail sales rose 0.8% in October, compared to expectations for a 0.6% increase. Core retail sales, which exclude automobile sales, increased by 0.8% last month, compared to forecasts for an advance of 0.5%. In addition, the Federal Reserve of New York said its Empire State manufacturing index climbed to 1.50 in November from -6.80 the previous month. Analysts had expected to improve to -2.50 this month.
The dollar also remained broadly supported amid hopes that increased fiscal spending and tax cuts under a Trump administration will bolster economic growth and inflation.
Today the U.K. is to publish its closely watched monthly jobs report ; Canada is to report on manufacturing sales ; while the U.S. is to release data on industrial production and producer prices.
The euro was up 0.11% at 1.0749 on Tuesday, after rising to highs of 1.0840 hit earlier in the day, and not far from Monday’s 10-month trough of 1.0706.
Earlier Tuesday, preliminary data showed that German gross domestic product rose .2% in the third quarter, disappointing expectations for an increase of 0.3% and down from a growth rate of 0.4% in the previous quarter. A separate report showed that the ZEW German economic sentiment index rose to 13.8 this month from October’s reading of 6.2. Analysts had expected the index to increase to 8.1 in October.
Today investors will focus on U.S. data on industrial production and producer prices, to gain more information on the strength of the greenback.
Pivot: 1.077Support: 1.067 1.0595 1.053Resistance: 1.077 1.082 1.0865Scenario 1: short positions below 1.0770 with targets at 1.0670 & 1.0595 in extension.Scenario 2: above 1.0770 look for further upside with 1.0820 & 1.0865 as targets.Comment: the RSI shows downside momentum.
Gold
Gold erased overnight gains on Tuesday, falling back towards a six-month low, after data showed that U.S. retail sales rose more than expected in October, boosting optimism over the health of the economy. The data comes after reports earlier this month showed a rapidly tightening labor market and signs of a recovery in the manufacturing sector, underscoring the economy's strength at the start of the fourth quarter.
Market analysts warned that the outlook for gold remains cloudy in the near-term. Prices of the yellow metal are down more than 6% over the past week amid optimism that increased fiscal spending and tax cuts under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.
Pivot: 1238Support: 1211 1200 1184Resistance: 1238 1251 1270Scenario 1: short positions below 1238.00 with targets at 1211.00 & 1200.00 in extension.Scenario 2: above 1238.00 look for further upside with 1251.00 & 1270.00 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
WTI Oil
Crude oil prices fell in Asia on Wednesday as U.S. industry estimates showed another solid build in inventories.
The American Petroleum Institute said Tuesday crude oil inventories rose 3.65 million barrels last week, building on an increase of 4.4 million barrels the previous week and rose more than expected. Gasoline inventories recorded a slight draw of 160,000 barrels in the week while there was an increase in distillate inventories of 3.0 million barrels, the first gain in six weeks.
Cushing recorded a build of 1.13 million barrels after a slight increase the previous week.
Today will be released official data from the Energy Information Administration.
Pivot: 44.85Support: 44.85 44.25 43.6Resistance: 46.45 46.9 47.53Scenario 1: long positions above 44.85 with targets at 46.45 & 46.90 in extension.Scenario 2: below 44.85 look for further downside with 44.25 & 43.60 as targets.Comment: the RSI advocates for further advance.
US 500
U.S. stocks were higher after the close on Tuesday, as gains in the Oil & Gas, Telecoms and Utilities sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 0.29% to hit a new all-time high, while the S&P 500 index climbed 0.75%, and the NASDAQ Composite index gained 1.10%.
Today investors will focus on U.S. data on industrial production and producer prices, to gain more information on the strength of the American economy.
Pivot: 2140 Support: 2140 2100 2078 Resistance: 2200 2216 2235 Scenario 1: long positions above 2140.00 with targets at 2200.00 & 2216.00 in extension. Scenario 2: below 2140.00 look for further downside with 2100.00 & 2078.00 as targets. Comment: the RSI lacks downward momentum.