The dollar trades lower on Friday, awaiting for the U.S. inflation data for a potential boost following this week's fall from 10-week highs. The dollar index, which tracks the U.S. currency against six other major currencies is almost 1% lower for the week. A major drag in the dollar was the Fed's September meeting minutes which showed that while policymakers are open to raising interest rates in December, they were still concerned about inflation.
On Thursday, the U.S. Department of Labor said its producer price index for final demand increased 0.4 percent on-month and 2.6 percent on-year in September, the biggest annual gain since February 2012.
The number of individuals filing for jobless benefits in the last week declined by 15,000 to 243,000 from the previous week’s revised total of 258,000, the U.S. Department of Labor said. Analysts expected a drop by 7,000 to 251,000 last week.
The main U.S. indices traded slightly lower following the data due to limited risk appetite in the markets, while in the commodities markets, gold was strongly supported by safe haven demand while crude oil prices settled lower after the International Agency Energy suggested that global demand for oil could come under pressure next year.
Bitcoin prices rose on Thursday as reports that China could reserve its ban on domestic bitcoin exchanges pushed the digital currency above $5,000 for the first time in its nine-year history.
For today, the U.S. is to release data on inflation and retail sales, as well as preliminary data on consumer sentiment.
Despite the positive data on rising producer prices on Thursday, the dollar continues to lose ground against the euro, as concerns of a weakness in inflation still add pressure on the dollar and raise questions on whether a third rate hike is appropriate this year.
Several policymakers believe additional tightening of monetary policy will depend on upcoming inflation data and that is why today’s report on inflation is key.
Later in the day, additional data from the U.S. is expected, including retail sales as well as preliminary data on consumer sentiment.
Pivot:1.1855Support:1.1821.17951.176Resistance:1.18551.1881.19Scenario 1:short positions below 1.1855 with targets at 1.1820 & 1.1795 in extension.Scenario 2:above 1.1855 look for further upside with 1.1880 & 1.1900 as targets.Comment:intraday technical indicators are mixed and call for caution.
Gold (EUR)
Gold prices trade right below $1,300 supported by concerns on low inflation and doubts over a third rate hike, despite Thursday’s reports pointing to underlying strength in the U.S. economy.
Gold traders will be looking at today’s inflation report for further indications on the monetary policy path that the Fed could take.
In Europe, meanwhile, political uncertainty supported demand for safe-haven gold after Spanish Prime Minister Mariano Rajoy gave the Catalan government eight days to abandon its independence bid.
Pivot:1289.5Support:1289.512841281Resistance:130113061310Scenario 1:long positions above 1289.50 with targets at 1301.00 & 1306.00 in extension.Scenario 2:below 1289.50 look for further downside with 1284.00 & 1281.00 as targets.Comment:the RSI advocates for further advance.
WTI Oil
Crude oil prices ended lower on Thursday, as a weak outlook on global oil demand for 2018 offset data showing U.S. crude oil inventories fell for the third-straight week.
The Energy Information Administration (EIA) showed crude inventories fell more than expected while gasoline supplies gained.
The mixed report on inventories from the EIA came ahead of a monthly update from the International Agency Energy on Thursday suggesting that global demand for oil could come under pressure next year.
Data on active U.S. oil rigs count will remain in focus for Friday.
Pivot:50.25Support:50.2549.7549.2Resistance:51.151.451.75Scenario 1:long positions above 50.25 with targets at 51.10 & 51.40 in extension.Scenario 2:below 50.25 look for further downside with 49.75 & 49.20 as targets.Comment:the RSI advocates for further advance. A strong support base around 50.25 (the previous swing low) has formed,and should limit any downward attempts.
US 500
The main US indices fell on Thursday as AT&T (NYSE:T) shares sank after it said it lost subscribers in the last quarter and banks slipped following results from JPMorgan and Citigroup.
JPMorgan Chase & Co (NYSE:JPM) and Citigroup Inc (NYSE:C) said they had set aside more money for credit card lending losses in the third quarter, stoking concerns about consumer credit, even as they reported results that topped analyst estimates.
JPMorgan shares eased 0.9 percent and Citigroup fell 3.4 percent, making them among the biggest drags on the S&P 500.
Earnings will continue to be in focus for today along with inflation data from the U.S. which could pave the way for the Fed’s monetary policy path.
Pivot: 2545 Support: 2545 2542 2540 Resistance: 2553.5 2558 2562 Scenario 1: long positions above 2545.00 with targets at 2553.50 & 2558.00 in extension. Scenario 2: below 2545.00 look for further downside with 2542.50 & 2540.00 as targets. Comment: the RSI calls for a rebound. The prices are now trading sideways with the range between 2545 and 2553.50. Nevertheless, as long as 2545 is not broken, the intraday outlook remains bullish.