The dollar extended losses against the other major currencies on Thursday, as the Federal Reserve’s decision to leave interest rates unchanged at the conclusion of its policy meeting on Wednesday continued to dampen demand for the greenback. In addition, the Fed cut the number of rate increases it expects this year to one from two, and projected a less aggressive rise in interest rates next year and in 2018, but it also signaled that could tighten monetary policy before the end of the year, if the job market continued to improve.
Markets shrugged off a report by the U.S. Department of Labor showing that initial jobless claims in the week ending September 17 decreased by 8,000 to 252,000, from the previous week’s total of 260,000, and reaching its lowest level since July. A separate report showed that U.S. existing home sales decreased by 0.9% in August to 5.33 million units, from the 5.38 million units in July, while the consensus forecast was for a 1.1% advance to 5.45 million units.
Elsewhere, in a widely expected move, also the Reserve Bank of New Zealand left its benchamark interest rate unchanged at 2.00% earlier, but said that further rate cuts would be needed to boost inflation.
Today the euro zone is to release data on private sector activity, while Canada is to round up the week with data on retail sales and inflation.
The yen held slightly weaker in Asia on Friday in a light regional data day with markets broadly assessing continued easy monetary conditions globally until the end of the year, including the Federal Reserve.
Markets are still digesting the Bank of Japan’s decision to refrain from cutting interest rates further into negative territory or expanding its asset purchase program on Wednesday, instead switching to targeting interest rates as a way to reach its inflation target.
Pivot:101.25Support:100.5100.0599.6Resistance:101.25101.6102.5Scenario 1:short @ 100.90 with targets @ 100.50 & 100.05 in extension.Scenario 2:above 101.25 look for further upside with 101.60 & 102.05 as targets.Comment:The pair is validating a bearish flag.
Gold
Gold prices extended overnight gains on Thursday, touching a fresh two-week peak, as the U.S. dollar sold off after the Federal Reserve held off on raising interest rates and scaled back the number of rate hikes it expects next year.
Markets are currently pricing in a 15% chance of a rate hike at November's meeting, according to the Fed Rate Monitor Tool, while for December, odds stood at around 60%.
Pivot:1330Support:133013251319.9Resistance:134313481352Scenario 1:long positions above 1330.00 with targets @ 1343.00 & 1348.00 in extension.Scenario 2:below 1330.00 look for further downside with 1325.00 & 1319.90 as targets.Comment:a support base at 1330.00 has formed and has allowed for a temporary stabilisation.
WTI Oil
Oil prices extended sharp overnight gains on Thursday, as a broadly weaker U.S. dollar and easing concerns over a slowdown in U.S. crude demand boosted sentiment.
Another supportive factor was an oil workers' strike in Norway, which threatened to cut North Sea crude output.
According to the U.S. Energy Information Administration, crude oil inventories fell by 6.2 million barrels last week to 504.6 million, surprising market analysts who expected an increase of 3.35 million barrels.
The report also showed that gasoline inventories tumbled by 3.204 million barrels, while distillate stockpiles rose by 2.238 million barrels.
Oil traders continued to weigh prospects that major oil producing nations will freeze output to support the market when they meet next week in Algeria between September 26 and 28.
Pivot:45.5Support:45.545.144.7Resistance:46.534747.7Scenario 1:long positions above 45.50 with targets @ 46.53 & 47.00 in extension.Scenario 2:below 45.50 look for further downside with 45.10 & 44.70 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
US 500
U.S. stocks climbed on Thursday, with big tech names leading broad gains, building on strength from a day earlier that was fueled by the Federal Reserve's decision to stand pat on interest rates.
The S&P 500 tallied its best two-day performance in more than two months, while the Nasdaq closed at a record high.
Fed Chair Janet Yellen said on Wednesday that U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating and fuelling high inflation. But the central bank maintained the low-interest rate environment that has helped underpin the bull market for stocks.
The Dow Jones industrial average rose 0.54%, the S&P 500 gained 0.65% and the Nasdaq Composite added 0.84%. The three indexes recorded their third straight session of gains.
Pivot: 2147 Support: 2147 2131 2123 Resistance: 2182 2190 2200 Scenario 1: long positions above 2147.00 with targets @ 2182.00 & 2190.00 in extension. Scenario 2: below 2147.00 look for further downside with 2131.00 & 2123.00 as targets. Comment: the RSI is mixed with a bullish bias.