The dollar extended losses against a basket of the other major currencies Thursday, as it remained under pressure amid uncertainty over how much the Federal Reserve will be able to raise interest rates this year.
Data on Thursday showed that initial jobless claims rose by a larger than forecast 8,000 to 285,000 last week, but remained in territory usually associated with a firming labor market.
The dollar has now handed back all of the gains made in the wake of last Friday’s shock decision by the Bank of Japan to adopt negative interest rates.
Elsewhere, the pound gave back almost all the day’s gains against the dollar after the Bank of England voted to hold interest rates at current low of 0.5% in a unanimous vote, and also cut its forecasts for economic growth. While the commodity linked currencies remained broadly higher, despite oil prices retreating from earlier highs.
Today in the euro zone, Germany is to publish a report on factory orders; the Swiss National Bank is to publish data on its foreign currency reserves; Canada is to publish its monthly employment report and data on the trade balance; while The U.S. is to round up the week with the closely watched report on nonfarm payrolls and data on the trade balance.
The Labor Department's Bureau of Labor Statistics is expected to report that nonfarm payrolls increased by 188,000 in January, falling sharply from December's robust gain of 292,000. It would mark the first month that the figure dipped under 200,000 since September. The unemployment rate, meanwhile, is expected to remain unchanged at 5.0%.
EUR/USDThe euro surged on Thursday to fresh 3 months highs, extending sharp gains from the previous session, as currency traders continued to gear up for the likelihood of a disappointing U.S. jobs report which could cap a stellar week for the euro.
The currency pair traded in a broad range between 1.1070 and 1.1238, before settling up 1.04% on the session. The euro soared above 1.12 against the dollar for the first time since late October, then held onto the gains to post its strongest two day move since the August flash crash. EUR/USD has closed higher in each of the last four sessions, jumping more than 3.3% from last Friday's lows, after the Bank of Japan propped up the dollar with a shocking decision to push interest rates into negative territory.
Today investors are looking to the U.S. nonfarm payrolls report for January, for fresh indications on the strength of the labor market.
Pivot:1.1115Support:1.11151.1071.1Resistance:1.1241.1311.137Scenario 1:long positions above 1.1115 with targets @ 1.124 & 1.131 in extension.Scenario 2:below 1.1115 look for further downside with 1.107 & 1.1 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
On Thursday gold surged to fresh 3 months highs amid a continuing slumping dollar, as investors prepared for a disappointing U.S. jobs report following the release of soft employment data.
Gold for April delivery traded in a broad range between $1,140.20 and $1,157.20 an ounce before settling up 1.29% on the day. At session highs, gold reached its highest level since October 29, when it traded above $1,160. The precious has soared this week, jumping more than $40 an ounce from its opening level on Monday. Since closing 2015 around $1,060, gold futures have skyrocketed more than 8% on the new year.
Today all the focus will be on the U.S. nonfarm payrolls report for January, for fresh indications on the strength of the greenback.
Pivot:1147.5Support:1147.511411136.6Resistance:116011661170Scenario 1:long positions above 1147.5 with targets @ 1160 & 1166 in extension.Scenario 2:below 1147.5 look for further downside with 1141 & 1136.6 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Crude futures moved lower on Thursday, as Saudi Arabia remains non-committal on a potential extraordinary OPEC meeting later this month, aimed at curbing a glut of oversupply on energy markets throughout the world.
WTI crude for March delivery traded in a broad range between $31.54 and $33.59 a barrel, before settling down 2.00% on the day. Volatility remained high, as U.S. crude futures closed by more than 1% in a positive or negative direction for the 13th consecutive session. In 2016, there have only been five sessions where WTI crude has closed below 1% from its previous day's settlement level.
Both the international and U.S. domestic benchmarks of crude surged more than 8% on Wednesday, enjoying their strongest one-day move in nearly two weeks. Still, WTI and Brent futures remain near 12-year lows, hit earlier last month, after a wide range of economic sanctions were dropped against Iran, paving the way for the Gulf nation to ramp up it exports in the coming months.
Pivot:32.95Support:31.330.629.73Resistance:32.9533.634.43Scenario 1:short positions below 32.95 with targets @ 31.3 & 30.6 in extension.Scenario 2:above 32.95 look for further upside with 33.6 & 34.43 as targets.Comment:as long as the resistance at 32.95 is not surpassed, the risk of the break below 31.3 remains high.
U.S. stocks rise for second day on Thursday, as a jump in materials shares helped, though disappointing forecasts from retailers and anxiety ahead of Friday's jobs report limited the advance.
The S&P 500 materials index rose 2.8%, leading the day's gains, as declines in the U.S. dollar lifted copper and other metals prices; the Dow Jones industrial average rose 0.49%; and the Nasdaq Composite added 0.12%.
Data showed non-farm productivity fell in the fourth quarter at its fastest pace in more than a year, while new orders for U.S. factory goods also fell in December by the most in a year. The weaker data came ahead of today's key monthly jobs report from the U.S. government, which is expected to show 190,000 non-farm jobs added in January.
Pivot: 1950 Support: 1821 1738 1650 Resistance: 1950 2010 2080 Scenario 1: short positions below 1950 with targets @ 1821 & 1738 in extension. Scenario 2: above 1950 look for further upside with 2010 & 2080 as targets. Comment: the RSI has just struck against its neutrality area at 50% and is reversing down.