The dollar fell lower against most major currencies on Wednesday, following the Federal Reserve’s policy decision to keep interest rates unchanged, in line with market expectations. The press conference held by Fed president Janet Yellen provided hints that the case for one rate hike before the end of the year had strengthened but the committee decided, for the time being, to wait for further evidence of continued progress toward its objectives before it moves on with a rate hike. On the labour market, the committee noted that job gains have been strong in recent months although the unemployment rate was steady. Regarding inflation, which is still below its 2% target, the Fed said it expects prices to remain low because of the drop in energy costs. Commodity prices along with the main U.S. indices were supported by these developments as low interest rates and weakness in the dollar will continue to stimulate economic activity and to support the markets. For today, the U.S. is to release data on initial jobless claims and existing home sales while the European Central Bank President Mario Draghi is to speak at an event in Frankfurt.
The euro gained against the dollar on Wednesday, after the FOMC left interest rates unchanged as expected, but signalled that one increase in the Fed funds rate was likely by December. Yellen emphasised that assessment in her press conference saying that the decision to leave rates on hold in September “did not reflect a lack of confidence in the economy but the committee decided, for the time being, to wait for further evidence of continued progress toward its objectives before it moves on with a rate hike. The EUR/USD ended the day with a 0.33% rise and continues to move higher on Thursday crossing the 1.12 level. For today, the U.S. is to release data on initial jobless claims and existing home sales while the European Central Bank President Mario Draghi is to speak at an event in Frankfurt.
Pivot:1.115Support:1.1151.11351.112Resistance:1.12151.12351.125Scenario 1:long positions above 1.1150 with targets @ 1.1215 & 1.1235 in extension.Scenario 2:below 1.1150 look for further downside with 1.1135 & 1.1120 as targets.Comment:the RSI advocates for further advance.
Gold
Gold prices posted strong overnight gains reaching their highest level in 12 days on Wednesday, following the Fed’s decision to keep interest rates unchanged. Lower interest rates increase demand for the yellow metal as they makes it more competitive against interest bearing investments and also cause the dollar to weaken, stimulating demand for dollar denominated commodities. For today, gold traders will be focusing on U.S. data on initial jobless claims and existing home sales.
Pivot:1325.5Support:1325.513191311.8Resistance:1339.7513431348Scenario 1:long positions above 1325.50 with targets @ 1339.75 & 1343.00 in extension.Scenario 2:below 1325.50 look for further downside with 1319.00 & 1311.80 as targets.Comment:the RSI lacks downward momentum.
WTI Oil
Oil prices extended gains on Wednesday, surging to weekly highs, after data showed that oil supplies in the U.S. unexpectedly fell and as the Fed’s decision to leave interest rates unchanged added pressure on the dollar, boosting dollar denominated commodities. The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.2 million barrels in the week ended September 16 when analysts' expected a rise of 3.35 million barrels. Oil traders are now focusing on whether major oil producing nations will freeze output to support the market when they meet next week.
Pivot:44.73Support:44.7344.2543.75Resistance:46.374747.7Scenario 1:long positions above 44.73 with targets @ 46.37 & 47.00 in extension.Scenario 2:below 44.73 look for further downside with 44.25 & 43.75 as targets.Comment:the RSI calls for a rebound.
US 500
The main U.S. indices posted a sharp rise on Wednesday, moving closer to all-time record-highs after the U.S. Federal Reserve kept interest rates unchanged, for now leaving intact the low-rate environment, aiming to boost further the recent progress made in the economy. The central bank strongly signalled it could still tighten monetary policy by the end of this year as the labour market improved further. The Dow Jones rose 0.9 percent, the S&P 500 gained 1.09 percent and the Nasdaq added 1.03 percent. All 11 major S&P sectors finished in positive territory with energy shares being the best performing sector, as oil prices rose. For today, traders will be focusing on U.S. data on initial jobless claims and existing home sales.
Pivot: 2125 Support: 2125 2113 2100 Resistance: 2169 2182 2193 Scenario 1: long positions above 2125.00 with targets @ 2169.00 & 2182.00 in extension. Scenario 2: below 2125.00 look for further downside with 2113.00 & 2100.00 as targets. Comment: the RSI shows upside momentum.