The FOMC, which raised the federal funds rate by 25 basis points on Dec. 16 after seven years, gave no hint of when it might raise that and other short-term interest rates again, although its acknowledgement of threats from "global economic and financial developments" could potentially mean greater delay. Neither did it give any indication it is backing away from the "gradual" rate normalization strategy announced last month. The dollar covered losses against most major currencies on Wednesday besides the euro, after the release of upbeat U.S. housing sector data. The U.S. Commerce Department said new home sales rose by 10.8% to 544,000 units last month, compared to expectations for a gain of 2.0% to 500,000. New home sales in November were revised up to 491,000 units from a previously reported 490,000 units. In a statement Thursday, the RBNZ said headline inflation is expected to increase over 2016 but it will now take longer to reach the target range than previously expected, indicating an easing may be required to achieve this earlier. For today, Germany is to publish preliminary data on inflation and Spain is to report on the unemployment rate. The U.S. is to release data on initial jobless claims, durable goods orders and pending home sales.
EUR/USDFor today, the euro posted modest gains against the dollar on Wednesday despite positive housing data from the U.S., after the Federal Reserve left short-term interest rates unchanged, one month after abandoning a seven-year zero interest rate policy with a historic rate hike. The euro shot up to session-highs versus the dollar following the release, before falling back slightly at the close. With the gains, the euro finished with its third consecutive winning session against its American counterpart and closed at its highest level in more than a week. Citing projections for weak economic growth and sluggish inflation expectations, the FOMC blamed the recent slowdown in part on soft net export prices and the decline of inventory investment. Investors now await the release of January industrial and consumer data in the euro zone on Thursday for further signals of potential divergence between the Fed and the European Central Bank. U.S. durable goods orders, jobless claims and pending home sales will also be in focus.
Pivot: 1.085Support: 1.085 1.082 1.08Resistance: 1.092 1.094 1.0965Scenario 1: long positions above 1.085 with targets @ 1.092 & 1.094 in extension.Scenario 2: below 1.085 look for further downside with 1.082 & 1.08 as targets.Comment: the RSI lacks downward momentum.
Gold prices continued to rise on Wednesday remaining near three-month highs in cautious trading ahead of the first monetary policy statement by the Federal Reserve since the U.S. central bank lifted interest rates at a historic meeting last month. The FOMC gave no hint of when it might raise that and other short-term interest rates again, although its acknowledgement of threats from "global economic and financial developments" could potentially mean greater delay supporting the precious metal. Elsewhere, the Shanghai Composite Index fell to fresh 14-month lows before closing down by 0.52%. A session earlier, equities on China's benchmark index plunged nearly 7% amid renewed concerns on the likelihood of further devaluations of the yuan providing further support on gold. For today, gold traders will be focusing on durable goods orders, jobless claims and pending home sales from the U.S.
Pivot: 1114.5Support: 1114.5 1109.5 1104.5Resistance: 1128 1133 1138Scenario 1: long positions above 1114.5 with targets @ 1128 & 1133 in extension.Scenario 2: below 1114.5 look for further downside with 1109.5 & 1104.5 as targets.Comment: a support base at 1114.5 has formed and has allowed for a temporary stabilisation.
U.S. crude futures pared early losses, closing up by more than 3% on Wednesday, as a considerable inventory stockpile did not surge as high as some investors feared, following a massive build from the American Petroleum Institute hours earlier. On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude oil inventories for the week ending on January 22, increased by 8.4 million barrels from the previous week. Prices are still supported by reports that OPEC and Russia may consider to work collaboratively in order to slash output in an effort to stem the downturn in prices. Currently, production among Saudi Arabia and Russia, two of the largest oil powers in the world, remains near record-highs.
Pivot: 35Support: 25 23.3 20Resistance: 35 38.5 43.5Scenario 1: short positions below 35 with targets @ 25 & 23.3 in extension.Scenario 2: above 35 look for further upside with 38.5 & 43.5 as targets.Comment: technically the RSI is below its neutrality area at 50.
U.S. stocks fell sharply in Wednesday's session, reversing territory after the Federal Reserve held interest rates steady at its January monetary policy meeting, while offering little direction on the timing of its next hike. The Dow Jones Industrial Average fell by 1.38%, while the NASDAQ Composite index lost 2.18% to 4,468.17. The S&P 500 Composite index, meanwhile, dropped 20.68 or 1.09% to 1,882.95, as eight of 10 sectors closed in the red. Stocks in the Technology, Consumer Services and Health Care industries lagged, each falling more than 1% on the session. Apple (O:AAPL) fell 6.36% one day after the world's largest company reported the slowest annual pace in iPhone sales growth in the history of the device. Boeing (N:BA), the Dow's worst performer, plunged 8.95% after offering a disappointing outlook for its production of new planes. For today, traders will be focusing on durable goods orders, jobless claims and pending home sales from the U.S.
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 is mixed to bearish.