Positive data from both the Eurozone and mixed data from the U.S., supported both the dollar and the euro, however the latter received an additional boost by optimistic comments from ECB President Mario Draghi at a press conference that took place after the central bank released its monetary policy statement. The ECB left interest rates unchanged and mentioned that the recent monetary easing program is providing what is necessary for accelerating growth in the region. Mario Draghi also added that the program will continue until the end of September 2016 and until inflation approaches 2%. In addition, Eurozone announced an increase in retail sales combined with a drop in unemployment causing the single currency to rally against most currencies for a second day. In the U.S. service sector activity in the U.S. grew at the slowest pace in more than a year in May, however, ADP payroll processing firm reported an increase in private employment by 201,000 last month, just above expectations of 200,000. Moreover, the U.S. trade balance showed a shrinking trade deficit of $40.88 billion in April from $50.57 billion posted in March. For today, the U.S. is to release the weekly report on initial jobless claims while the energy sector will be focusing on the EIA Natural Gas Storage report.
The euro continues to rise against the dollar on Wednesday, following a series of positive macroeconomic figures in the region, including a rise in retail sales by 0.7% and a drop in unemployment to 11.1% in April from 11.2% in March. The single currency received further support by comments from ECB President Mario Draghi related to the positive impact that the central bank's monetary easing program has brought to the euro area economy. However, the rise in the pair was limited by positive ADP employment figures and a sharp decrease in the U.S. trade deficit. For today, the U.S. is to release the weekly report on initial jobless claims.
Pivot: 1.119
Support: 1.119; 1.1105; 1.1015
Resistance: 1.129; 1.1325, 1.1365
Scenario 1: Long positions above 1.119 with targets @ 1.129 & 1.1325 in extension.
Scenario 2: Below 1.119 look for further downside with 1.1105 & 1.1015 as targets.
Comment: The RSI is well directed.
Gold prices posted a drop on Wednesday following positive economic announcements from the U.S. and optimistic comments by ECB president Mario Draghi that make safe haven investments such as the yellow metal, less attractive to investors. ADP payroll processing firm reported an increase in private employment by 201,000 last month, above expectations for a 200,000 increase and also, the U.S. trade balance showed a shrinking trade deficit of $40.88 billion in April from $50.57 billion posted in March indicating that the U.S. economy is on a good path. For today, the U.S. is to release the weekly report on initial jobless claims.
Pivot: 1187
Support: 1180; 1178; 1170
Resistance: 1187; 1195, 1204
Scenario 1: Short positions below 1187 with targets @ 1180 & 1178 in extension.
Scenario 2: Above 1187 look for further upside with 1195 & 1204 as targets.
Comment: As long as 1187 is resistance, look for choppy price action with a bearish bias.
OIL/USD
WTI crude oil prices traded between gains and losses on Wednesday to end the day in negative territory despite the fact that the EIA report showed a drop in U.S. inventories for a fifth consecutive week last week. A drop of 1.9 million barrels was announced by the U.S. Energy Information Administration for last week compared to expectations for a drop of 1.7 million barrels. Energy traders will now be watching closely on the Natural gas storage report due later in the day while the outcome of a key OPEC meeting that will take place in Vienna on Friday is also considered important for further indications on market supply levels.
Pivot: 60.44
Support: 58.7; 57.7; 56.5
Resistance: 60.44; 61; 61.6
Scenario 1: Short positions below 60.44 with targets @ 58.7 & 57.7 in extension.
Scenario 2: Above 60.44 look for further upside with 61 & 61.6 as targets.
Comment: As long as 60.44 is resistance, likely decline to 58.7.
U.S. stocks rose on Wednesday, helped by optimism that Greece was close to an agreement to avoid bankruptcy, while further gains in bond yields supported the financial sector. Further support came as international creditors gave hints that they might compromise to avoid a default even when Athens indicated it might skip an IMF loan repayment due this week. However, strong data including reports showing the U.S. trade deficit narrowed, imply that the Federal Reserve may consider raising interest rates sooner this year. For today, the focus will be shifted towards initial jobless claims data from the U.S. while markets will be looking ahead to Friday's employment report.
Pivot: 2106
Support: 2106; 2099; 2083
Resistance: 2122; 2126; 2135
Scenario 1: Long positions above 2106 with targets @ 2122 & 2126 in extension.
Scenario 2: Below 2106 look for further downside with 2099 & 2083 as targets.
Comment: The RSI is mixed with a bullish bias.