The dollar bounced back to a fresh seven-month high against the other majors currencies on Thursday, after slipping briefly, as markets digested comments by European Central Bank president Mario Draghi, as well as a string of mixed U.S. data.
The U.S. National Association of Realtors reported on Thursday that existing home sales increased by 3.2% in September, to 5.47 million units, from 5.30 million in August, while the consensus forecast was for a 0.4% advance to 5.35 million units. The data came after the U.S. Department of Labor said initial jobless claims increased by 13,000 in the week ending October 15 to 260,000, from the previous week’s total of 247,000, while analysts had expected jobless claims to rise by 4,000 to 250,000 last week. In addition, the Philadelphia Federal Reserve said its business conditions index came in at 9.7 this month, down from 12.8 in September, while economists had expected a reading of 5.3 this month.
Elsewhere, the ECB left interest rates unchanged at record lows of zero and held its quantitative easing program unchanged at €80 billion per month, and, in a subsequent press conference, ECB President Mario Draghi said the central bank would wait for updated economic forecasts in December to make a decision, and that it had not discussed either tapering the size of its asset purchase program, or extending the horizon of the purchases.
Today the U.K. is to release data on public sector borrowing, while Canada is to round up the week with reports on retail sales and inflation.
The euro fell to four-month lows against the dollar in volatile trade on Thursday, after European Central Bank President Mario Draghi indicated that an adjustment to the banks stimulus program could come in December.
Earlier Thursday, the ECB left interest rates across the euro zone unchanged at record lows of zero and kept the deposit facility rate at -0.4%. The single currency initially popped higher after Draghi said the ECB did not discuss a tapering its asset purchase program, or the possible horizon at which stimulus might end at its meeting.
But the euro quickly turned lower after Draghi indicated that an adjustment to the bank’s stimulus program could come in December, because he added that the euro zone economy is continuing to post a “moderate recovery, and a gradual rise in inflation” and, furthermore, he said that also the euro area continued to show “resilience” to economic and political uncertainty, in the aftermath of the June 23 vote by Britain to exit the European Union.
Pivot: 1.095Support: 1.089 1.0865 1.083Resistance: 1.095 1.0985 1.1005Scenario 1: short positions below 1.0950 with targets at 1.0890 & 1.0865 in extension.Scenario 2: above 1.0950 look for further upside with 1.0985 & 1.1005 as targets.Comment: the RSI is mixed to bearish.
Gold prices were trading close to two-week highs on Thursday, after the European Central Bank indicated that it would wait until December to discuss tapering its asset purchase program, or the possible horizon at which stimulus might end.
Meanwhile, traders continued to mull over the prospects for a December rate hike by the Federal Reserve. Expectations for a December rate hike remained high, with markets currently pricing in around a 65% chance of a hike, according to the Fed Rate Monitor Tool.
Pivot: 1267.5Support: 1256 1252 1249.5Resistance: 1267.5 1270.7 1274.5Scenario 1: short positions below 1267.50 with targets at 1256.00 & 1252.00 in extension.Scenario 2: above 1267.50 look for further upside with 1270.70 & 1274.50 as targets.Comment: technically the RSI is below its neutrality area at 50.
Oil prices fell on Thursday, as traders took profits following a rally in the previous session, fueled by an unexpectedly large U.S. oil inventory drawdown last week and hopes for an output cut by major producers.
U.S. crude oil was at $50.54 a barrel, down $1.28 or 2.49% from its previous close.
OPEC is now expected to complete details of the proposed production cut at its next official meeting on November 30, but many market analysts remain doubtful of the deal, amid uncertainty over how the agreement would be coordinated.
Today energy traders will focus on Baker Hughes weekly data on the U.S. oil rig count.
Pivot: 51.13Support: 50.13 49.9 49.7Resistance: 49.7 51.53 51.83Scenario 1: short positions below 51.13 with targets at 50.13 & 49.90 in extension.Scenario 2: above 51.13 look for further upside with 51.53 & 51.83 as targets.Comment: technically the RSI is below its neutrality area at 50.
U.S. stocks ended a choppy session on Thursday with a slight decline as investors digested the latest round of earnings, with a sharp drop in Telecoms offset by gains in healthcare.
Telecoms were down 2%, their biggest percentage decline in five weeks, as Verizon lost 2.5%. The company added fewer than expected wireless subscribers in the third quarter and revenue fell short of expectations. But a 10.3% jump in American Express (NYSE:AXP) helped offset the decline, after the credit card issuer posted strong quarterly results and boosted its 2016 forecast. The gains gave the stock its best day in over seven years.
At the close on the NYSE, the Dow Jones industrial average fell 0.22%, the S&P 500 lost 0.14%, and the Nasdaq Composite dropped 0.09%.
Pivot: 2145 Support: 2118 2114 2108 Resistance: 2145 2152 2156 Scenario 1: short positions below 2145.00 with targets at 2118.00 & 2114.00 in extension. Scenario 2: above 2145.00 look for further upside with 2152.00 & 2156.00 as targets. Comment: the RSI is mixed with a bearish bias.