The dollar fell lower against the other majors currencies on Wednesday, despite the release of upbeat U.S. housing sector data as traders were beginning to unwind positions ahead of the Christmas holiday. The National Association of Realtors said that existing home sales rose to 5.61 million units in November from 5.57 million units the previous month. Analysts had expected existing home sales to fall to 5.50 million last month. Market sentiment had taken a hit after a Russian ambassador to Turkey, Andrei Karlov, was shot and killed and a few hours later, a truck plowed into a crowded Christmas market in central Berlin, killing 12 people and injuring 50 others.
The dollar was still supported by the Federal Reserve’s decision last week to raise interest rates by 25 basis points. The central bank also hinted three more rate hikes for 2017. Elsewhere the U.K. Office for National Statistics reported that public sector net borrowing increased by £12.21 billion in November, compared to expectations for a rise of £11.30 billion with the GBP posting a gain of 0.2% against the dollar. For today, the focus is shifted on data from the U.S. on third quarter economic growth, initial jobless claims, durable goods orders and personal spending.
The euro gained by 0.55% to 1.0447, recovering from the previous session’s fresh 14-year low of 1.0349 as investors appear to be cashing out from their dollar positions or to hedge positions in the run-up to the Christmas weekend. The recent drop in the dollar came despite the upbeat U.S. housing data.
The dollar reached its highest since January 2003 against most currencies last week and threatened parity with the euro, after the U.S. Federal Reserve hinted that rates could rise as many as three times next year. For today, market participants will be focusing on U.S. housing data, third quarter economic growth, initial jobless claims, durable goods orders and personal spending.
Pivot:1.0415
Support:1.04151.03751.035
Resistance:1.0451.0481.052
Scenario 1:long positions above 1.0415 with targets at 1.0450 & 1.0480 in extension.
Scenario 2:below 1.0415 look for further downside with 1.0375 & 1.0350 as targets.
Comment:the RSI is mixed with a bullish bias.
Gold
Gold traders appear reluctant to enter into buy positions on the precious metal, following six consecutive weeks of losses, caused mainly by the sharp rise in the dollar after Trump’s election. Prices are fluctuating within a tight range between $1142 and $1125 per ounce ending Wednesday in negative territory, at $1130 per ounce.
Recent geopolitical turmoil in Berlin and Ankara failed to give a boost to the precious metal which is still under pressure following the fact that the Federal Reserve signaled it expects to raise rates more quickly than previously anticipated in 2017. In addition, rising U.S. bond yields and a rally in stocks markets have also shifted investors’ attention away from the yellow metal.
For today, gold traders will be focusing on U.S. housing data, third quarter economic growth, initial jobless claims, durable goods orders and personal spending.
Pivot:1129
Support:11291126.51124
Resistance:113511371139.5
Scenario 1:long positions above 1129.00 with targets at 1135.00 & 1137.00 in extension.
Scenario 2:below 1129.00 look for further downside with 1126.50 & 1124.00 as targets.
Comment:the RSI broke above a declining trend line.
WTI Oil
Oil prices pushed lower on Wednesday, posting a drop of 1.9% as U.S. crude stocks posted a surprise increase last week, climbing by 2.3 million barrels compared with an expected decline of 2.5 million barrels, the U.S. Energy Information Administration said on Wednesday. In addition, Libya's National Oil Corporation (NOC) said it hoped to add 270,000 barrels per day (bpd) to national production after it confirmed on Tuesday that pipelines leading from the Sharara and El Feel fields had reopened.
That came as Russian Energy Minister Alexander Novak on Wednesday said trust between oil producing countries is important if the global deal to curtail output is to succeed. Prices are receiving pressure by worries in the market about production increases in the U.S., where rigs drilling for oil rose to a level not seen in almost a year. Market focus will now be shifted on Friday’s data on active oil rigs by Baker Hughes.
Pivot:52.85
Support:52.8553.1553.46
Resistance:52.1551.951.6
Scenario 1:short positions below 52.85 with targets at 52.15 & 51.90 in extension.
Scenario 2:above 52.85 look for further upside with 53.15 & 53.46 as targets.
Comment:the RSI broke below a rising trend line.
US 500
The main U.S. indices fell on Wednesday, with healthcare and real estate shares posting losses, one day after the Nasdaq Composite and the Dow Jones Industrial Average hit record highs. The Dow briefly approached the 20,000 level, which has never reached, but later on it reversed gains and dropped down to negative territory.
U.S. stocks have rallied since the Nov. 8 election, with the Dow up 9 percent and the S&P 500 gaining 6 percent on speculation that President-elect Donald Trump's plans for deregulation and infrastructure spending will boost the economy. Some investors worry that the so-called Trump rally has made stocks expensive and are concerned that legislators may resist strong tax cuts and other policies that could widen the federal deficit.
So far in 2016, the S&P 500 has risen 11 percent, topping the 8 percent gain for the year that strategists predicted on average in a Reuters poll 12 months ago. For today, market focus will be shifted towards the U.S. GDP report for further indications on the strength of the dollar.
Pivot: 2262
Support: 2255 2250 2247
Resistance: 2262 2265 2269
Scenario 1: short positions below 2262.00 with targets at 2255.00 & 2250.00 in extension.
Scenario 2: above 2262.00 look for further upside with 2265.00 & 2269.00 as targets.
Comment: as long as 2262.00 is resistance, likely decline to 2255.00.