The dollar trimmed gains against the other major currencies on Thursday, after the release of weak U.S. pending home sales data dampened optimism sparked by strong U.S. economic reports released earlier in the day.
The U.S. National Association of Realtors said its pending home sales index fell 2.4% last month, missing expectations for an increase of 0.3%. But official data earlier showed that the third estimate of U.S. second quarter gross domestic product showed growth of 1.4%, while analysts had expected a growth rate of 1.3%. Separately, the U.S. Department of Labor said initial jobless claims in the week ending September 24 increased by 3,000 to 254,000, from the previous week’s total of 251,000, below analysts’ expectations.
Today the U.K. is to report on the current account and publish revised data on second quarter growth; the euro zone is to release preliminary data on consumer inflation, while Germany is to release data on retail sales; Canada is to publish data on economic growth; while the U.S. is to round up the week with data on personal income and spending, a report on business activity in the Chicago region and revised data on consumer sentiment.
Demand for the safe-haven yen weakened after the OPEC said it agreed to reduce output to a range of 32.5-33.0 million barrels per day; it was the first such deal since 2008.
The Japanese currency was also under pressure after Bank of Japan Governor Haruhiko Kuroda earlier said that the central bank will pursue the most appropriate yield curve to achieve its 2% inflation target; and that the BoJ is ready to ease policy further by cutting its short and long-term interest rate targets or by expanding asset purchases.
The yen retraced earlier weakness in Asia on Friday, as the Caixin manufacturing PMI for China came in as expected, offsetting mixed Japanese data on consumer prices, household spending and industrial production and jobs.
Pivot: 101.85Support: 100.45 100.2 99.9Resistance: 101.85 102.1 102.45Scenario 1: short positions below 101.85 with targets @ 100.45 & 100.20 in extension.Scenario 2: above 101.85 look for further upside with 102.10 & 102.45 as targets.Comment: the RSI shows downside momentum.
Gold
Gold prices fall to a fresh one-week low on Thursday, as investors digested better than expected U.S. economic data.
But the yellow metal rose in Asia on Friday, after a key manufacturing survey from China came in as expected and investors looked ahead to more remarks from Fed policymakers.
The Caixin manufacturing PMI for September came in at 50.1, as expected with holidays in China next week in focus going forward.
Mr Zhengsheng Zhong, the director of macroeconomic analysis at Caixin said that the readings for the manufacturing PMI over the past three months seem to indicate that the economy has begun to stabilise, but cautioned that an increasingly strained fiscal budget could pose a risk to sustainable growth.
Pivot: 1325Support: 1315.8 1312 1307.5Resistance: 1325 1328 1331Scenario 1: short positions below 1325.00 with targets @ 1315.80 & 1312.00 in extension.Scenario 2: above 1325.00 look for further upside with 1328.00 & 1331.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1325.00.
WTI Oil
Oil prices rose nearly 3% on Thursday, extending their rally on optimism over OPEC's first output cut plan in eight years, despite some analysts' doubts that the reduction would be enough to rebalance a heavily over-supplied market.
The OPEC agreed on Wednesday to cut output to 32.5-33.0 million barrels per day (bpd), and added that other details of the plan will be known at its policy meeting in November, leaving unanswered when the agreement will come into effect, what new quotas for member countries will be and for what periods, and how compliance will be verified.
But WTI prices dropped on Friday, as investors took profits following a 7% rise in the last two sessions, amid doubts that OPEC's first planned output cut in eight years would make a substantial dent in the global crude glut. Today energy traders will focus on Baker Hughes’ weekly data on the U.S. oil rig count.
Pivot: 46.6Support: 46.6 45.95 45.15Resistance: 48.35 49 49.5Scenario 1: long positions above 46.60 with targets @ 48.35 & 49.00 in extension.Scenario 2: below 46.60 look for further downside with 45.95 & 45.15 as targets.Comment: the RSI is mixed to bullish.
US 500
Wall Street dropped on Thursday, weighed down by Apple (NASDAQ:AAPL), as well as selling in Wells Fargo (NYSE:WFC), Citigroup (NYSE:C) and other major banks, as investors worried about the health of Deutsche Bank (DE:DBKGn).
The S&P 500 financial index declined 1.49% after Bloomberg reported that some hedge funds have withdrawn excess cash and positions held at the German lender.
Growing concerns over the stability of Germany's biggest bank have pushed its shares to record lows and its U.S.-listed stock on Thursday tumbled 6.7%. Adding to negative sentiment in the banking sector, Wells Fargo & Co lost 2.07% after U.S. lawmakers rebuked CEO John Stumpf over his handling of sales abuses.
Today investors will focus on US data on personal income and spending, a report on business activity in the Chicago region and revised data on consumer sentiment.
Pivot: 2155 Support: 2138 2133 2130 Resistance: 2155 2161 2167 Scenario 1: short positions below 2155.00 with targets @ 2138.00 & 2133.00 in extension. Scenario 2: above 2155.00 look for further upside with 2161.00 & 2167.00 as targets. Comment: the RSI is mixed with a bearish bias.