The dollar continued to trade near one-week highs against the other major currencies after data on Tuesday reinforced optimism over the strength of the U.S. job market.
The U.S. Labor Department said on Tuesday that the number of job openings, excluding the farming industry, settled at a record-high 6.163 million in June from 5.702 million a month earlier.
The report came after data on Friday showed that the U.S. economy added 209,000 jobs last month, blowing past expectations for an increase of 183,000.
The strong numbers fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.
Investors were now eyeing U.S. inflation reports later in the week for indications of whether the recovery in the dollar is sustainable in the longer term.
Energy markets are looking ahead to the highly-anticipated meeting of oil ministers from selected OPEC and non-OPEC producer countries to evaluate how the group can increase compliance with agreed production cuts that began at the start of the year.
Today, Canada is to report on building permits and the U.S. is to report on nonfarm productivity and labor costs.
The yen reached eight-week highs against most currencies on Wednesday, reacting to the latest geopolitical tensions arising from the Korean Peninsula.
North Korea said on Wednesday it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat it presented to the United States would be met with "fire and fury".
Market participants' focus has now turned to the next trigger points that could heighten geopolitical tensions between the two countries.
Pivot: 110.5
Support: 109.65 109.35 109
Resistance: 110.5 110.8 111.05
Scenario 1: short positions below 110.50 with targets at 109.65 & 109.35 in extension.
Scenario 2: above 110.50 look for further upside with 110.80 & 111.05 as targets.
Comment: a break below 109.65 would trigger a drop towards 109.35.
Gold
Gold struggled on Tuesday to regain the previous day’s losses, pressured by a rebound in the dollar, after U.S. job openings exceeded forecasts. The U.S. job openings, a measure of labor demand, increased 461,000 to a seasonally adjusted 6.2 million, the highest level since December 2000, the Labor Department said on Tuesday. This in turn points to an improving labor market, raising expectations that the Federal Reserve will stick to its plan to raise rates at least one more time this year.
The producer price index and the consumer price index data due Thursday and Friday, is expected to provide market participants with fresh insight into the pace of inflation. Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Pivot: 1254.5
Support: 1254.5 1251 1248.5
Resistance: 1265 1267.5 1271
Scenario 1: long positions above 1254.50 with targets at 1265.00 & 1267.50 in extension.
Scenario 2: below 1254.50 look for further downside with 1251.00 & 1248.50 as targets.
Comment: the RSI is supported by a rising trend line.
WTI Oil
Oil futures fell on Tuesday, as increasing production from major oil producers offset reports that Saudi Arabia is planning to cut exports to Asia next month.
Saudi Arabia, the world’s largest producer of oil, is expected to cut sales of oil supplies to Asia by up to 10% in September, to get the global crude glut under control, according to multiple reports Tuesday. After an initial rise, oil futures reversed gains, on growing doubts that the two-day meeting of OPEC and non-OPEC members on compliance which concludes on Tuesday, would yield any results. The American Petroleum Institute also announced that crude inventories declined 7.8 million barrels
Today’s data from the EIA (Energy Information Administration) could give fresh impulses into the direction of the oil price.
Pivot: 49.55
Support: 48.55 48.3 48
Resistance: 49.55 49.73 49.95
Scenario 1: short positions below 49.55 with targets at 48.55 & 48.30 in extension.
Scenario 2: above 49.55 look for further upside with 49.73 & 49.95 as targets.
Comment: the RSI broke below a rising trend line.
US 500
U.S. stocks closed lower on Tuesday after a late afternoon selling spree as investors fled for safety after U.S. President Donald Trump vowed to respond aggressively to any threats from North Korea.
After scaling back from record highs earlier in the session, Wall Street's three major indexes dipped after Trump said North Korea "will be met with fire and fury" like the world has never seen if it threatens the United States.
The Dow Jones ended down 0.15 percent, ending a 9-day streak of closing records, the S&P 500 lost 0.24 percent and the Nasdaq dropped 0.21 percent.
Ten out of the 11 major S&P 500 sectors ended lower after the comments with the only gains seen in the utilities sector.
Investors are now eyeing U.S. inflation reports later in the week for indications of whether the recovery in the dollar will be sustainable in the longer term.
Pivot: 2473
Support: 2460.5 2457 2452
Resistance: 2473 2478 2482
Scenario 1: short positions below 2473.00 with targets at 2460.50 & 2457.00 in extension.
Scenario 2: above 2473.00 look for further upside with 2478.00 & 2482.00 as targets.
Comment: the RSI advocates for further downside.