The dollar edged up and hovered close to a fresh 14-year peak against the other majors currencies on Thursday, as strong U.S. data continued to boost optimism over the strength of the economy.
The U.S. Department of Labor said initial jobless claims in the week ending November 12 fell by 19,000 to 235,000, the lowest level since 1973. Analysts expected jobless claims to rise by 3,000 to 257,000 last week.
Separately, the Commerce Department said housing starts surged 25% in October to hit 1.323 million units, while building permits rose 0.3% to 1.229 million units.
Data also showed that U.S. consumer prices rose 0.4% in October, in line with expectations. Year-over-year, consumer prices increased by 1.6% last month, its highest reading since October 2014.
The upbeat data added to optimism over the strength of the U.S. economy and fueled further expectations for a December rate hike by the Federal Reserve.
Earlier in the day, Fed Chair Janet Yellen warned of the danger of waiting too long to tighten monetary policy.
Today ECB head Mario Draghi is to speak at an event in Frankfurt, while Canada is to round up the week with data on consumer prices.
On Thursday EUR/USD slipped 0.19% to 1.0671, just off Wednesday’s 11-month trough of 1.0663.
The single currency stayed under pressure due to the prospects for a Fed rate hike well anchored in the market after data and top policymaker comments in the U.S.
Infact, always yesterday, Fed Chair Janet Yellen warned of the danger of waiting too long to tighten monetary policy. The comments came a day after Philadelphia Fed head Patrick Harker said that he was in favour of raising interest rates, while Cleveland Fed President Loretta Mester said the Fed must not overreact to market moves following the shock result of the presidential election.
Today investors’ focus will be on Mario Draghi’ speech at an event in Frankfurt.
Pivot: 1.0665Support: 1.056 1.051 1.046Resistance: 1.0665 1.074 1.081Scenario 1: short positions below 1.0665 with targets at 1.0560 & 1.0510 in extension.Scenario 2: above 1.0665 look for further upside with 1.0740 & 1.0810 as targets.Comment: as long as 1.0665 is resistance, look for choppy price action with a bearish bias.
Gold
Gold prices ticked higher on Thursday, holding in a familiar range as markets awaited testimony from Federal Reserve Chair Janet Yellen later in the day.
But the precious metal prices dipped in Asia on Friday, as sentiment moved into bear territory ahead of an expected Fed rate hike next month and a strong dollar curbed buying interest.
Overnight, gold prices traded in a narrow range after remarks from Federal Reserve Chair Janet Yellen that signaled a rate hike soon and U.S. data that was seen as upbeat.
Today metal traders’ focus will be on Mario Draghi’ speech at an event in Frankfurt.
Pivot: 1200Support: 1200 1193 1184Resistance: 1222 1233 1245Scenario 1: long positions above 1200.00 with targets at 1222.00 & 1233.00 in extension.Scenario 2: below 1200.00 look for further downside with 1193.00 & 1184.00 as targets.Comment: a support base at 1200.00 has formed and has allowed for a temporary stabilisation.
WTI Oil
Oil prices rose on Thursday, with U.S. crude briefly rising as much as $1 a barrel, as expectations of an OPEC deal to limit production outweighed oversupply concerns, but a rallying dollar capped gains.
Saudi Energy Minister Khalid al-Falih said he was optimistic the Organization of the Petroleum Exporting Countries would formalize a preliminary oil output deal reached in Algeria in September. Falih also said that he believed the market was on its way to becoming balanced and that an agreement by OPEC at its meeting in Vienna on Nov. 30 would speed the recovery.
OPEC members are ready to reach a "forceful" agreement, Venezuelan President Nicolas Maduro said on Wednesday, following a meeting with OPEC Secretary-General Mohammed Barkindo, who described the situation as the most severe oil market crisis in 50 years.
Today energy traders will focus on Baker Hughes’s weekly data on the U.S. oil rig count.
Pivot: 45.6Support: 44.62 44.25 43.6Resistance: 45.6 46.12 46.6Scenario 1: short positions below 45.60 with targets at 44.62 & 44.25 in extension.Scenario 2: above 45.60 look for further upside with 46.12 & 46.60 as targets.Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
US 500
The U.S. dollar climbed to a 13-1/2-year high and global stock indexes rose on Thursday, after comments by U.S. Federal Reserve Chair Janet Yellen bolstered the case for raising interest rates next month.
Yellen, who testified on the economic outlook before the congressional Joint Economic Committee, indicated little had changed following the victory of Donald Trump in the Nov. 8 U.S. presidential election. She said she intended to serve out her term, which ends in 2018, and indicated the Fed remained on track to raise rates at its meeting next month.
The Dow Jones industrial average closed up 0.19%; the S&P 500 gained 0.47% and the Nasdaq Composite added 0.74%.
Today investors’ focus will be on Mario Draghi’ speech at an event in Frankfurt.
Pivot: 2168 Support: 2168 2150 2100 Resistance: 2190 2200 2216 Scenario 1: long positions above 2168.00 with targets at 2190.00 & 2200.00 in extension. Scenario 2: below 2168.00 look for further downside with 2150.00 & 2100.00 as targets. Comment: the RSI calls for a rebound.