The dollar hit multi-month highs against the other major currencies on Tuesday, as expectations for a near-term rate hike by the Federal Reserve underpinned demand, while sterling was pressured lower.
The index has rallied around 3.5% so far this month as hawkish remarks by Federal Reserve officials in recent week solidified expectations for a rate hike before the year’s end.
Elsewhere, the sterling came under pressure, with GBP/USD hitting a low of 1.2083, the lowest level since the flash-crash earlier this month, before pulling back to 1.2155.
The pound regained ground after Bank of England Governor Mark Carney said the bank has to weigh the recent increase in inflation against supporting the economy with low interest rates.
The remarks came as Carney testified about the economic consequences of the Brexit vote before the Economic Affairs Committee in the House of Lords. Carney also said it is frustrating to have interest rates so low for so long, but added that the bank’s focus is on its remit to get inflation where it needs to be.
Today the U.S. is to report on new home sales, which will be closely watched by investors to gain further information on the strength of the American Economy.
The euro fell to a fresh seven-month low on Tuesday, with EUR/USD touching lows of 1.0851.
The single currency remained on the back foot after the European Central Bank indicated last week that it could expand its stimulus program in December.
The euro shrugged off data showing that German business confidence hit a two-year high this month, despite uncertainty over the Brexit vote and the upcoming U.S. presidential election.
Today investors will focus on US report on new home sales, to gain further information on the strength of the greenback.
Pivot: 1.0915Support: 1.085 1.083 1.08Resistance: 1.0915 1.095 1.0985Scenario 1: short positions below 1.0915 with targets at 1.0850 & 1.0830 in extension.Scenario 2: above 1.0915 look for further upside with 1.0950 & 1.0985 as targets.Comment: the RSI is mixed to bearish.
Gold
Gold prices added to overnight gains on Tuesday, despite strong dollar, as market players looked ahead to more U.S. economic data for clues on the likelihood of a December rate hike.
The precious metal prices posted mild gains also in Asia on Wednesday, as a recent string of upbeat U.S. economic data combined with hawkish remarks from key Fed officials heightened expectations for higher interest rates in the coming months.
However, a dip in the October U.S. Conference Board consumer confidence index to 98.6 from 103.5 the previous month caught attention.
Traders are currently pricing in around a 78.3% chance of a rate hike at the Fed's December meeting, according to the Fed Rate Monitor Tool.
Pivot: 1267Support: 1267 1262 1258Resistance: 1281 1285 1291Scenario 1: long positions above 1267.00 with targets at 1281.00 & 1285.00 in extension.Scenario 2: below 1267.00 look for further downside with 1262.00 & 1258.00 as targets.Comment: the RSI is mixed to bullish.
WTI Oil
Oil prices were under pressure on Tuesday, reversing earlier gains, as fading expectations of a coordinated production cut among major global oil producers and a stronger U.S. dollar weighed.
Crude prices dipped sharply also in early Asia on Wednesday, after industry figures showed a major build in U.S. crude stockpiles.
The American Petroleum Institute (API) said late Tuesday that crude inventories rose 4.8 million barrels last week, larger than expected, and following a 3.8 million draw the previous week. Stocks at Cushing eased 2.3 million barrels, API said, as an outage of a pipeline feeding the facility continues to crimp flows. Gasoline inventories recorded a build of 1.7 million barrels, and distillates fell 900,000 barrels.
Today, official data from the Energy Information Administration will be released, amid forecasts for an oil-stock increase of 800,000 barrels.
Pivot: 50.35Support: 48.3 47.62 47.16Resistance: 50.35 51 51.51Scenario 1: short positions below 50.35 with targets at 48.30 & 47.62 in extension.Scenario 2: above 50.35 look for further upside with 51.00 & 51.51 as targets.Comment: the RSI advocates for further downside.
US 500
U.S. stocks were lower after the close on Tuesday, as losses in the consumer services, telecoms and oil & gas sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average fell 0.30%, while the S&P 500 index declined 0.38%, and the NASDAQ Composite index fell 0.50%.
Today the U.S. is to report on new home sales, which will be closely watched by investors to gain further information on the strength of the American Economy.
Pivot: 2144 Support: 2127 2123 2117 Resistance: 2144 2150 2157 Scenario 1: short positions below 2144.00 with targets at 2127.00 & 2123.00 in extension. Scenario 2: above 2144.00 look for further upside with 2150.00 & 2157.00 as targets. Comment: the RSI is mixed with a bearish bias.