The dollar moved higher on Thursday after the release of positive U.S. economic reports and as investors turned their attention Friday's highly-anticipated nonfarm payrolls data. The dollar was supported by the Institute of Supply Management report, showing that its non-manufacturing purchasing manager's index fell 59.0 last month from 60.3 in July, above forecasts for a reading of 58.1. However, the rise in the dollar was limited by the U.S. Department of Labor which reported that the number of individuals filing for initial jobless benefits in the week ending August 29 increased by 12,000 to 282,000 from the previous week’s total of 270,000. Analysts had expected initial jobless claims to rise by 5,000 to 275,000 last week. Initial jobless claims have held below the 300,000-level for 26 consecutive weeks, which is usually associated with a healthy labor market. Data also showed that the U.S. trade deficit narrowed to $41.86 billion in July when analysts had expected the deficit to narrow to $42.4 billion. In the european front, the euro fell broadly after the ECB indicated that it could expand its quantitative easing program while interest rates remained unchanged. For today, Germany is to report on factory orders, Canada is to publish its monthly employment report and the U.S. will beb closing the week with the closely watched nonfarm payrolls report, and data on wage growth.
The euro fell further against the U.S. dollar on Thursday, trading close to two-week lows, pressured by new indications that the ECB might expand its current quantitative easing measures and after positive ISM manufacturing and trade balance reports from the US. The ECB lowered its forecast for growth and inflation, giving clear signs that an increase in its stimulus measures is possible. The comments came after the ECB kept its benchmark interest rate at a record-low 0.05%, in line with the consensus expectation. ISM non-manufacturing data and trade balance data from the U.S. came out positive, adding further pressure on the pair while unemployment claims were reported worse than expected but still held below 300,000, indicating strength in the labor market. For today, investors are looking ahead to the U.S. jobs report for further indications on the strength of the economy and signs of a potential rate hike by the Federal Reserve this month.
Pivot: 1.1175 Support: 1.1085 1.105 1.102 Resistance: 1.1175 1.121 1.126 Scenario 1: Short positions below 1.1175 with targets @ 1.1085 & 1.105 in extension. Scenario 2: Above 1.1175 look for further upside with 1.121 & 1.126 as targets. Comment: The RSI is mixed to bearish.
Oil
West Texas Intermediate crude oil prices ended Thursday slightly higher, trading close to $47 after a volatile week where it was fluctuating between a high of $49.28 and a low of $43.18 per barrel. Previously, WTI closed more than 6% in either a positive or negative direction on four consecutive trading days. The commodity broke free from pressure seen on Wednesday where U.S. inventories added 4.7 million barrels as Russian and Venezuelan leaders initiated a new collaboration in order to boost oil prices. In Beijing, Russia president Vladimir Putin and Venezuela president Nicolas Maduro met on Thursday to discuss plans to address record declines in crude oil. Energy traders await the release of oil services firm Baker Hughes (NYSE:BHI) weekly rig count on Friday for further indications on the supply-demand balance nationwide. For the week ending on August 21, U.S. oil rigs rose by one to 675, representing the eighth increase over the last nine weeks.
Pivot: 45 Support: 45 43.2 41.75 Resistance: 48.7 49.4 50 Scenario 1: Long positions above 45 with targets @ 48.7 & 49.4 in extension. Scenario 2: Below 45 look for further downside with 43.2 & 41.75 as targets. Comment: The RSI is mixed to bullish.
U.S. stocks ended mixed on Thursday as investors remain alert after recent turmoil in China's markets, and look toward the key U.S. jobs report that may clear out the Federal Reserve's course with regards to monetary policy. Major U.S. indices at one point rose strongly over 1 percent but then gave up those gains and fell back into negative territory as worries about China's economy weighed on traders' minds. The S&P 500 remains around 9 percent lower from its all-time high posted in May. The index made its biggest monthly drop in three years in August. Apple (NASDAQ:AAPL) was the biggest drag on S&P 500 with a 1.75 percent drop while Exxon Mobil (NYSE:XOM)'s 0.76 percent gain helped push the index higher. The jobs report for August will be crucial to any decision in September on interest rates and market activity is expected to be high for this employment report, as it will be the last major piece of labor market data before the Fed meets later this month.
Pivot: 2044 Support: 1867 1820 1798 Resistance: 2044 2135 2180 Scenario 1: Short positions below 2044 with targets @ 1867 & 1820 in extension. Scenario 2: Above 2044 look for further upside with 2135 & 2180 as targets.Comment: The RSI is below its neutrality area at 50%
Twitter (NYSE:TWTR)
The search to find a permanent CEO of Twitter has become more urgent on Thursday as the board prepares to meet to discuss the situation. In the three months since the company started searching for a new chief executive officer, the stock has slipped 22 percent and several product executives have left. Co-founder and interim CEO Jack Dorsey remains the leading candidate, according to Bloomberg, even though he is still CEO of Square, which is set to go public. Twitter shares added nearly 10% in the last week.
Pivot: 18350 Support: 17200 17040 16820 Resistance: 18350 18650 18900 Scenario 1: short term rebound towards 34.1. Scenario 2: the downside breakout of 25 would call for 22 and 20.2. Comment: the RSI is below 50. The MACD is above its signal line and negative. The configuration is mixed.