The dollar regained momentum against most major currencies on Thursday, after data showed that U.S. initial jobless claims fell more than anticipated last week. The U.S. Department of Labor announced a drop in initial unemployment claims by 8,000 reaching to 276,000 from previous week's 284,000. Analysts forecasted a drop of 5,000 to 279,000. The report improved market sentiment towards the U.S. economic recovery recent strength in the dollar and added some strong pressure on precious metals as well as on the energy sector. Elsewhere, the euro was also supported as German bond yields rose to their highest level since September. Investors are looking forward to Friday's NFP report, for further indications of a potential early rate hike. The report is expected to show an increase of 225,000 for May, following the 223,000 figure posted in April.
The euro started Thursday on a very strong note, surging to levels right below 1.14 against the dollar following the recent series of positive macroeconomic figures from Eurozone and a very optimistic speech by ECB President Mario Draghi on Wednesday. The pair was also supported by a rise in German bond yields that reached their highest level since September. Nonetheless, better than expected jobless claims data from the U.S. were the highlight of the day bringing the pair back below 1.13 as investors are now expecting the Non-Farm Payrolls report to provide the final indication on where the U.S. employment sector is currently standing. In the European front, Germany will be releasing data on factory orders earlier in the day.
Pivot: 1.119
Support: 1.119; 1.1105; 1.1015
Resistance: 1.1285; 1.1385, 1.1465
Scenario 1: Long positions above 1.119 with targets @ 1.1285 & 1.1385 in extension.
Scenario 2: Below 1.119 look for further downside with 1.1105 & 1.1015 as targets.
Comment: Intraday technical indicators are mixed and call for caution.
Gold prices posted a sharp drop on Thursday, reaching 5-week lows, as positive figures from the U.S. employment sector cause the Federal Reserve to reevaluate the status of the economy following the contraction of the first quarter, and increase the possibility for a rate hike in the near future. Strength in the dollar and improvement in market sentiment add strong pressure on safe haven investments such as gold. The fall came after U.S. Department of Labor announced a decrease by 8000 in initial jobless claims when analysts expected a drop of 5000. The focus now is shifted towards Friday's Non-Farm Employment report for further indications on economic recovery.
Pivot: 1233
Support: 1160; 1130; 1080
Resistance: 1233; 1255, 1309
Scenario 1: Short positions below 1233 with targets @ 1160 & 1130 in extension.
Scenario 2: Above 1233 look for further upside with 1255 & 1309 as targets.
Comment: The RSI broke below a rising trend line. The prices broke below the 20-day and 50-day moving averages.
OIL/USD
Recent strength in the dollar and comments by senior members of OPEC countries added significant pressure on crude oil prices on Thursday, causing them to fall by more than 2% and sending them to one-week lows. A senior OPEC delegate said that there is "consensus" among Gulf OPEC countries to keep output levels unchanged above 30 million barrels per day, despite the fact that the market remains oversupplied. Traders are now looking ahead to the result of the Non-Farm Payrolls report for signs related to the strength of the dollar and to a key meeting of the Organization of the Petroleum Exporting Counties in Vienna on Friday for further supply indications.
Pivot: 59.3
Support: 57.75; 57.35; 56.62
Resistance: 59.3; 60; 60.64
Scenario 1: Short positions below 59.3 with targets @ 57.75 & 57.35 in extension.
Scenario 2: Above 59.3 look for further upside with 60 & 60.64 as targets.
Comment: As long as 59.3 is resistance, likely decline to 57.75.
AMAZON
Amazon.com Inc (NASDAQ:AMZN). rose by more than 42% over the past year, with the future outlook remaining positive as PiperJaffray raised its price target on the stock to $520 from $475 on Wednesday. Amazon.com Inc is currently competing against Google Inc (NASDAQ:GOOGL) in a new industry related to storing human DNA data and helping scientists make new medical discoveries. The growth of this sector is supported by the need for personalized medicine that aims to treat each patient's DNA profile. As the two companies compete for market share in a business that may be worth $1 billion a year by 2018, healthcare companies are picking sides between their cloud computing offerings - Google Genomics or Amazon Web Services.
Pivot: 365
Support: 365; 341; 317
Resistance: 480; 522; 549
Scenario 1: Long positions above 365 with targets @ 480 & 522 in extension.
Scenario 2: Below 365 look for further downside with 341 & 317 as targets.
Comment: The immediate trend remains up and the momentum is strong..
The main U.S. stock indices posted a drop on Thursday, as positive initial jobless claims data are suggesting that the Federal Reserve will remain on track to raise interest rates later this year. The drop in oil and gold prices added further pressure on energy and materials shares, which pushed the S&P 500 even lower. Prices remain vulnerable as uncertainty remains over a potential deal between Greece and its creditors, however, on Friday all eyes are turned towards the U.S. Non-Farm Payrolls report where an increase of 225,000 is expected according to Reuters.
Pivot: 2067
Support: 2067; 2021; 1972
Resistance: 2135; 2180; 2215
Scenario 1: Long positions above 2067 with targets @ 2135 & 2180 in extension.
Scenario 2: Below 2067 look for further downside with 2021 & 1972 as targets.
Comment: The RSI is mixed with a bullish bias.