The dollar held steady at two-month highs against the other major currencies on Wednesday, as expectations for a June rate hike in the U.S. continued to boost demand for the greenback. The dollar remained supported after data on Tuesday showed that U.S. new home sales soared to the highest level since the start of 2008 in April. The euro gained ground after Greece and its creditors reached a deal on Wednesday to unlock €10 billion in bailout funds and trigger work on debt relief, easing concerns over another euro zone debt crisis. Sterling found some support as uncertainty over the referendum on Britain’s European Union membership eased. The yen gained further on Thursday after corporate price index data came in as expected, while the Aussie rebounded on a mixed set of capital expenditure figures. For today, the U.K. is to produce revised data on first quarter growth and the U.S. is to release reports on durable goods orders, initial jobless claims and pending home sales.
EUR/USDThe euro rose moderately against the dollar on Wednesday, in a quiet trading session, as investors wait for key economic data at the end of the week for further signs of potential divergence between the Federal Reserve and the European Central Bank. Currency traders remain cautious ahead of a closely-watched speech by Fed chair Janet Yellen and the release of the second estimate for first quarter GDP in the U.S. where analysts expect to see a 0.4% increase from initial forecasts. In addition, the University of Michigan is expected to report a slight decline in consumer sentiment to 95.5, after the flash reading surged by almost 7 points to 95.8, its strongest level in more than a year. For today, the U.S. is to release reports on durable goods orders, initial jobless claims and pending home sales.
Pivot: 1.119 Support: 1.1145 1.1125 1.108 Resistance: 1.119 1.123 1.126 Scenario 1: short positions below 1.1190 with targets @ 1.1145 & 1.1125 in extension. Scenario 2: above 1.1190 look for further upside with 1.1230 & 1.1260 as targets. Comment:intraday technical indicators are mixed and call for caution.
Gold fell to fresh 7-week lows on Wednesday, as investors continued to speculate on a summer interest rate hike by the Federal Reserve. Investors waiting for a speech by Fed chair Janet Yellen on Friday at Harvard University for further indications on the timing of the Federal Open Market Committee's (FOMC) first interest rate hike in 2016.In two rare public appearances this spring, Yellen has largely maintained a dovish stance that the Fed will raise rates gradually in the current cycle, amid widespread volatility in global financial markets and persistently low inflation. In addition, the U.S. Census Bureau reports its second estimate for first quarter GDP on Friday. For today, the U.S. is to release reports on durable goods orders, initial jobless claims and pending home sales.
Pivot: 1217.5 Support: 1217.5 1210 1202 Resistance: 1242.5 1248 1248 Scenario 1: long positions above 1217.50 with targets @ 1242.50 & 1248.00 in extension. Scenario 2: below 1217.50 look for further downside with 1210.00 & 1202.00 as targets. Comment:the RSI is mixed with a bullish bias.
Oil prices tested $50 a barrel on Wednesday, a level last reached in mid-October, as continued declines in U.S. domestic production offset an unexpected rise in U.S. gasoline inventories last week. On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories fell by 4.2 million barrels for the week ending on May 20 in comparison with the previous week. Notably, gasoline stockpiles rose by 2.04 million barrels on the week. Investors are now cautious ahead of an OPEC meeting next week in Vienna which will be notable with Saudi oil minister Ali bin Ibrahim Al-Naimi not heading the Saudi delegation. Russia energy minister Alexander Novak expressed skepticism that OPEC will accomplish any meaningful developments at the meeting that could lead to a comprehensive freeze.
Pivot: 48.65 Support: 50.46 50.95 51.98 Resistance: 48.65 48.2 47.65 Scenario 1: long positions above 48.65 with targets @ 50.46 & 50.95 in extension. Scenario 2: below 48.65 look for further downside with 48.20 & 47.65 as targets. Comment:the RSI is mixed to bullish.
U.S. stocks rose sharply on Wednesday, completing one of their strongest two-day rallies since late-March, as crude oil prices hit fresh 6-month highs while testing a key technical level at $50 a barrel. Oil prices rose more than 1% in Wednesday's session after the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories fell by 4.2 million barrels for the week ending on May 20. The Dow Jones rose 0.82%, while the NASDAQ added 0.70% and the S&P 500, jumped 0.70%, as nine of 10 sectors closed in the green. Stocks in the Energy and Basic Materials industries led, each gaining more than 1% while stocks in the utilities sector fell. The top performer on the Dow was Goldman Sachs Group (NYSE:GS), which added 2.57%. Yahoo (NASDAQ:YHOO) was also the worst performer on the S&P dropping by 3.98%. For today, the U.S. is to release reports on durable goods orders, initial jobless claims and pending home sales.
Pivot: 2034 Support: 2034 2006 1970 Resistance: 2085 2100 2130 Scenario 1: long positions above 2034.00 with targets @ 2100.00 & 2130.00 in extension. Scenario 2: below 2034.00 look for further downside with 2006.00 & 1970.00 as targets. Comment: the RSI calls for a rebound. Thanks to a hammer candlestick on Thursday, the price has just escaped from a declining channel.