The dollar remained lower against the other major currencies on Tuesday, after the release of mixed U.S. data fueled further uncertainty over the timing of a U.S. rate hike.
The U.S. Commerce Department said that housing starts rose 6.5% to 1.206 million units last month from August’s total of 1.132 million units, above analysts’ expectations, but the report also showed that the number of building permits issued dropped by 5.0% to 1.103 million units from August’s total of 1.170 million, below analysts’ expectations.
On Wednesday the dollar was steady against the euro, as the previous session's upbeat U.S. housing starts data support the greenback.
Meanwhile, the single currency strengthened as investors looked ahead to Thursday’s European Central Bank meeting in Malta, amid speculation that it could flag plans to enlarge its stimulus program.
Today investors’ focus will be on the U.K. data on public sector net borrowing and later on the Bank of Canada announcement of its benchmark interest rate, which outlines economic conditions and the factors affecting the monetary policy decision.
The euro edged higher against the dollar on Tuesday, as investors looked ahead to a European Central Bank meeting later in the week, amid speculation that it could flag plans to enlarge its stimulus program.
The single currency has come under pressure since late last week when ECB governing council member Ewald Nowotny said that additional measures to boost price growth in the euro zone are needed.
Data on Friday confirmed that the rate of inflation in the euro area turned negative in September for the first time since the ECB launched its easing program in March. The ECB launched its €60 billion-a-month asset purchase program to combat persistently low inflation in the euro area and it is set to run until at least September 2016.
Pivot: 1.1395Support: 1.1305 1.1265 1.123Resistance: 1.1395 1.145 1.1495Scenario 1: Short positions below 1.1395 with targets @ 1.1305 & 1.1265 in extensionScenario 2: Above 1.1395 look for further upside with 1.145 & 1.1495 as targets.Comment: As long as 1.1395 is resistance, look for choppy price action with a bearish bias.
Gold
Gold futures were little changed on Tuesday after data showed the number of housing starts issued in the U.S. rose more than expected in September, while building permits fell more than forecast, painting a mixed picture of the economy and adding to uncertainty over the timing of a U.S. rate hike.
Later on during the day the gold went up, amid a slightly weaker dollar, one session after tumbling nearly 1% following indications from China that the world's second-largest economy could expand this year at its lowest rate in more than a decade. Metal traders continued to digest weak economic data from China when the National Bureau of Statistics reported that Chinese GDP grew by 6.9% in the third quarter, marking the slowest three-month period of growth since the height of the Financial Crisis.
But gold prices held flat to weaker again in Asia on Wednesday with the focus on the Federal Reserve latest monetary review this month.
Pivot: 1169Support: 1169 1163 1158Resistance: 1184.5 1190 1195Scenario 1: Long positions above 1169 with targets @ 1184.5 & 1190 in extension.Scenario 2: Below 1169 look for further downside with 1163 & 1158 as targets. Comment: The RSI is mixed to bullish.
WTI Oil
Crude futures closed slightly higher on Tuesday, as market players looked ahead to fresh weekly information from this week special OPEC meeting with a host of non-OPEC members including Russia.
But oil prices fell again on Wednesday, after data showed a larger-than-expected build in U.S. crude inventories last week, fanning worries over global oversupply, even as a slightly weaker dollar provided some support.
Oil traders now are focused on today special meeting of the Organization of the Petroleum Exporting Countries and non-OPEC members in Vienna, as it may shed further light on the group's position of maintaining production at current levels as prices remain muted.
According to industry research group Baker Hughes (N:BHI) the number of rigs drilling for oil in the U.S. decreased by 10 last week to 595, the seventh straight weekly decline. Over the prior six weeks, drillers had cut 70 rigs. But despite this tighter outlook for North America, output remains robust in other countries.
Pivot: 46.95Support: 45.12 44.45 43.45Resistance: 46.95 47.6 47.95Scenario 1: Short positions below 46.95 with targets @ 45.12 & 44.45 in extension.Scenario 2: Above 46.95 look for further upside with 47.6 & 47.95 as targets.Comment: As long as 46.95 is resistance, likely decline to 45.12.
U.S. stocks ended slightly lower on Tuesday, as a decline in healthcare and biotech stocks offset gains in United Technologies (N:UTX) and Verizon.
Verizon and United Technologies rose after strong quarterly results, limiting the losses caused by IBM (N:IBM)'s disappointing results and lowered forecast.
Third-quarter company earnings are in focus this week, with investors keeping an eye on revenue growth and outlook commentary on the effects of a global economic slowdown.
S&P 500 companies are expected to show a 3.9% fall in third-quarter profit, while revenue is expected to fall 3.8%, according to Thomson Reuters data.
Pivot: 2044Support: 1867 1820 1798Resistance: 2044 2135 2180Scenario 1: Short positions below 2044 with targets @ 1952 & 1867 in extension.Scenario 2: Above 2044 look for further upside with 2135 & 2180 as targets.Comment: As long as 2044 is resistance, look for choppy price action with a bearish bias.
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