The U.S. dollar gained slightly against major currencies on Wednesday as the Federal Reserve Open Committee (FOMC) meeting minutes were released. The meeting was the first since Trump took office and saw FOMC members report higher levels of confidence in the business community. They also predicted that the expected increase in economic growth related to Trump's policy proposals could push the Fed into action.
Despite stronger U.S. existing home sales for January of 5.69 million compared to expectations of 5.51 million, the dollar index failed to add gains in the U.S. session.
In addition, positive signs on a potential rate hike by the Fed failed to push gold prices lower as political uncertainly related to the upcoming European elections, the Greek bailout and the Brexit remain supportive of safe haven assets.
On Thursday, the Aussie fell in Asia as private spending for capital items dipped more than expected, raising some speculation that the economy may need more monetary help going forward.
Today, the U.S. is to release the weekly report in initial jobless claims and on Friday data on new home sales and a revised report on consumer sentiment are due.
The euro gained against the dollar on Wednesday, after the minutes of the Federal Reserve's previous meeting was released, as positive views regarding a rate hike from some Fed members came against concerns of the strength in the dollar, which could weigh on economic growth.
Fed Members confidence in the business community was also highlighted in the minutes, as members' predicted that Trump's policy proposals could lead to an increase in economic growth, which may prompt the Fed into action.
Today, the U.S. is to release the weekly report in initial jobless claims and on Friday data on new home sales and a revised report on consumer sentiment are due.
Pivot: 1.053Support: 1.053 1.049 1.045Resistance: 1.0575 1.06 1.063Scenario 1: long positions above 1.0530 with targets at 1.0575 & 1.0600 in extension.Scenario 2: below 1.0530 look for further downside with 1.0490 & 1.0450 as targets.Comment: the RSI shows upside momentum.
Gold
Gold prices fell as low as $1231 per ounce in the U.S. session, following the positive housing data, and then recovered later in the day, after the minutes of the FOMC were released.
Even though the minutes were supportive of a rate hike in the near future gold posted a slight increase to trade close to the $1240 level, approaching last week’s high of 1243.5, with uncertainty surrounding U.S. policy and upcoming elections in Europe still providing a boost to the precious metal.
Today, the U.S. is to release the weekly report in initial jobless claims and on Friday data on new home sales and a revised report on consumer sentiment are due.
Pivot: 1235.25Support: 1235.25 1233 1230Resistance: 1240.5 1243.1 1246Scenario 1: long positions above 1235.25 with targets at 1240.50 & 1243.10 in extension.Scenario 2: below 1235.25 look for further downside with 1233.00 & 1230.00 as targets. Comment: the RSI is mixed to bullish.Comment: the RSI is mixed to bullish.
WTI Oil
Crude oil prices fell on Wednesday, despite inventories posting a surprise drop last week. The American Petroleum Institute (API) reported late Wednesday a drop by 884,000 barrels, compared to a gain of 3.475 million barrels expected at the end of last week and breaking a trend of six-straight builds.
Gasoline inventories dipped 893,000 barrels, compared to the decline of 888,000 barrels seen and distillates dropped a sharp 4.23 million barrels, more than the drop of 483,000 barrels expected.
The oil storage hub of Cushing, Oklahoma, saw a draw of 1.73 million barrels, the sixth decline in seven weeks.
Attention is shifted on today’s inventory data from the U.S. Energy information Administration, where market participants will look to confirm if U.S. inventories are actually decreasing.
Pivot: 53.65Support: 53.65 53.35 53.15Resistance: 54.22 54.43 54.6Scenario 1: long positions above 53.65 with targets at 54.22 & 54.43 in extension.Scenario 2: below 53.65 look for further downside with 53.35 & 53.15 as targets.Comment: the RSI is mixed to bullish.
US 30
The main U.S. indices closed mixed, after minutes released from the Federal Reserve’s previous meeting signalled that an interest rate hike is coming “fairly soon”.
Some of the indices dipped into negative territory, after the Fed minutes were released, and couldn't recover as a slump in the energy sector capped upside momentum.
On the economic data front, U.S. home resales surged to a 10-year in January, as buyers ignored an increase in home prices and mortgage rates.
In corporate earnings news Tesla (NASDAQ:TSLA) Inc shares traded more than 1% higher, despite posting a loss per share of 69 cents compared to Wall Street estimates' of a 42 cents loss.
The Dow Jones Industrial Average posted a 9th straight record close closed up 31 points at 20,774.65.
Pivot: 20660 Support: 20660 20600 20560 Resistance: 20790 20860 20900 Scenario 1: long positions above 20660.00 with targets at 20790.00 & 20860.00 in extension. Scenario 2: below 20660.00 look for further downside with 20600.00 & 20560.00 as targets. Comment: the RSI is mixed with a bullish bias.