On Wednesday the US Dollar traded slightly lower against other major currencies with the US Dollar Index (USDX) closing 0.14% lower. This was to a significant part attributed to a strong Japanese Yen, following Tuesday’s announcement that the Bank of Japan would curb its bond purchases.
Oil traded almost unchanged as US productions fell, while crude oil stockpiles according to the EIA fell less than what the API calculated in its statistics published on Tuesday. Gold settled lower on weaker Dollar while gold traders await US inflation data due to be released on Friday.
US equity indices closed almost unchanged. Banks and financial stocks traded higher on expectations of higher yields, while most other sector stocks fell.
Bitcoin continued to trade at significant volatility but overall remaining in a constant range. The cryptocurrency markets continue to be concerned about the clampdown on exchanges in South Korea and mining activities in China. On Wednesday the US investment bank Goldman Sachs (NYSE:GS) surprisingly described ‘Bitcoin as Money’ in a client brief.
On Thursday the European Union publishes industrial production data. Italy releases retail sales statistics. The US will publish new jobless claims, the Treasury budget level, and Federal Reserve asset/credit statistics.
USD/JPYThe US Dollar lost significantly against the Japanese Yen and traded over 1% lower on Wednesday following Tuesday’s news that the Bank of Japan reduced its long-term bond purchases. The Dollar was also under pressure as China is reportedly considering reducing or completely halting the purchase of US Treasuries. The auction of 10 year US Treasury notes delivered the highest yield since 2014.
On Thursday in the US jobless claim and Treasury budget figures will be released. During Friday’s Asian trading session Japan releases data of its current account index.
Pivot: 111.65
Support: 111.05 110.85 110.65
Resistance: 111.65 112 112.4
Scenario 1: short positions below 111.65 with targets at 111.05 & 110.85 in extension.
Scenario 2: above 111.65 look for further upside with 112.00 & 112.40 as targets.
Comment: the RSI is capped by a declining trend line.
Gold experienced significant volatility and settled slightly higher, supported by a weaker Dollar and a retracement of US yields late in Wednesday’s trading. At its peak gold was trading close to its level last seen in mid-September.
Gold traders will be carefully watching Consumer Price Index (CPI) data from the US, which will be released on Friday.
Pivot: 1315
Support: 1315 1308 1305
Resistance: 1324.5 1328.5 1334
Scenario 1: long positions above 1315.00 with targets at 1324.50 & 1328.50 in extension.
Scenario 2: below 1315.00 look for further downside with 1308.00 & 1305.00 as targets.
Comment: the RSI is mixed to bullish. Prices broke above a falling channel.
Natural gas closed firmly lower, despite initially surging up on Wednesday’s trading. The winter weather in the US plays as significant role in gas price moves and some forecasts predict warmer weather this week, while for some areas ice storms are forecasted. On Tuesday the Energy Information Administration (EIA) published a report, predicting the highest increase in natural gas production in the US in absolute numbers.
On Thursday the EIA is set to publish its weekly natural gas storage statistics.
Pivot: 2.865
Support: 2.865 2.827 2.783
Resistance: 2.98 3.037 3.09
Scenario 1: long positions above 2.8650 with targets at 2.9800 & 3.0370 in extension.
Scenario 2: below 2.8650 look for further downside with 2.8270 & 2.7830 as targets.
Comment: the RSI is mixed to bullish.
US equity indices initially traded clearly in the red on Wednesday but managed to reach a level virtually unchanged from Tuesday’s closing prices. While mortgage market indicators were up, markets were concerned about lower than expected import and export prices and speculations of China possibly halting the purchase of US Treasuries. Banks (US Banks ETF +1.23%) and financial (US Financials ETF +0.80%) stocks were the best performing equities as yields shot up, while real estate (US Real Estate ETF -1.31%) and utilities (US Utilities ETF -1.13%) stocks were among the biggest losers in Wednesday’s trading. Delta Air Lines (NYSE:DAL) closed 2.82% higher ahead of earnings release on Thursday before trading. The Banks JP Morgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) are due to release earnings on Friday before trading opens.
On Thursday new jobless claims, the Treasury budget level, and Federal Reserve asset/credit statistics are due to be released.
Pivot: 2737
Support: 2737 2731 2726
Resistance: 2752 2755 2760
Scenario 1: long positions above 2737.00 with targets at 2752.00 & 2755.00 in extension.
Scenario 2: below 2737.00 look for further downside with 2731.00 & 2726.00 as targets.
Comment: the RSI is mixed to bullish.