The dollar pushed higher against the other majors currencies on Thursday, despite the release of disappointing U.S. jobless claims and housing sector data, as investors paused amid ongoing concerns over Donald Trump’s policies.
The U.S. Commerce Department said new home sales sank by 10.4% to 536,000 units last month, compared to expectations for a 1.0% drop to 588,000 units. The report came after the U.S. Department of Labor said that initial jobless claims increased by 22,000 in the week ending January 21 to 259,000, from the previous week’s total of 237,000, while analysts had expected jobless claims to rise by 13,000 last week.
Investors remained cautious after Trump on Wednesday ordered construction of a U.S.-Mexican border wall and punishment for cities shielding illegal immigrants. In addition, Trump was expected to sign an executive order in the coming days to block the entry of refugees from Syria and suspend the entry of any immigrants from Muslim-majority Middle Eastern and African countries. The dollar has been under pressure since Donald Trump’s inauguration last Friday amid concerns over a lack of clarity on his economic policies and fears that his protectionist trade stance could hit corporate profits and act as a drag on growth.
Today Shanghai stock exchange will be shut for a holiday. The U.S. is to round up the week with a preliminary estimate of fourth quarter economic growth, as well as a report on durable goods orders and revised data on consumer sentiment.
Sterling retreated 0.44% to 1.2579 on Thursday, pulling away from a six-week high of 1.2624 hit overnight.
The pound strengthened earlier, after the U.K. Office for National Statistics said gross domestic product grew by 0.6% in the three months to December, above forecasts of 0.5% and matching the rate of expansion seen the previous quarter. On an annual basis, the economy grew by 2.2%, slightly faster than the 2.1% growth expected.
Today U.K. PM Theresa May will meet president Trump, amid hopes of a bilateral trade deal.
The U.K. economy has held up better than expected since the June 23 vote to leave the EU. However, observers expect the British economy to feel the effects of divorce proceedings with the EU.
Pivot: 1.2675Support: 1.255 1.2495 1.242Resistance: 1.2675 1.273 1.277Scenario 1: short positions below 1.2675 with targets at 1.2550 & 1.2495 in extension.Scenario 2: above 1.2675 look for further upside with 1.2730 & 1.2770 as targets.Comment: the RSI is mixed to bearish.
Gold
Gold prices sank to a new two-week low on Thursday, as the U.S. dollar pushed higher and stocks around the world extended their recent rally, dimming the metal’s safe-haven appeal.
It fell to 99.77 overnight, a level not seen since December 8, amid concerns over President Donald Trump's protectionist stance. Trump signed executive orders on immigration on Wednesday, including one of border security and the intent to build a wall along the U.S.-Mexico border. The president is also planning 'extreme vetting' of visa applications and a temporary ban on virtually all refugee admissions into the U.S. as early as Thursday.
Metal traders will continue to focus on Trump for further details on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.
Pivot: 1193Support: 1185.25 1182 1179.3Resistance: 1193 1198.3 1202.7Scenario 1: short positions below 1193.00 with targets at 1185.25 & 1182.00 in extension.Scenario 2: above 1193.00 look for further upside with 1198.30 & 1202.70 as targets.Comment: the RSI is mixed to bearish.
WTI Oil
Oil prices were sharply higher on Thursday, bouncing back from the prior session's losses, as market players embraced riskier assets despite another big jump in U.S. oil inventories.
Supporting prices was a report that more than 4 million barrels of Venezuelan crude and fuels are sitting in tankers anchored in the Caribbean sea, unable to reach their final destination because state-run PDVSA cannot pay for hull cleaning, inspections, and other port services.
Futures have been trading in a narrow range around the low-to-mid $50s per barrel over the past month, as sentiment in oil markets has been torn between expectations of a rebound in U.S. shale production and hopes that oversupply may be curbed by output cuts announced by major global producers. U.S. drilling activity has risen by more than 6% since mid-2016, taking it back to levels seen in late 2014, raising concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
Today energy traders will focus on the U.S. oil rig count weekly data, released by Baker Hughes.
Pivot: 53.5Support: 53.5 53.25 52.95Resistance: 54.05 54.25 54.35Scenario 1: long positions above 53.50 with targets at 54.05 & 54.25 in extension.Scenario 2: below 53.50 look for further downside with 53.25 & 52.95 as targets.Comment: the RSI advocates for further upside.
US 500
U.S. stocks were little changed on Thursday, as investors paused following a two-day rally that pushed the Dow Jones Industrial Average above the 20,000 mark, while the latest wave of earnings rolled in.
The post-election rally reignited this week following a solid start to earnings season and optimism over U.S. President Donald Trump's pro-growth initiatives, giving the benchmark S&P 500 its best two-day performance in seven weeks and catapulting the Dow above 20,000 for the first time.
Early fourth-quarter earnings have also boosted sentiment and are now expected to show growth of 7 percent, their biggest increase in two years, according to Thomson Reuters data.
Meanwhile, oil prices were sharply higher on Thursday, bouncing back from the prior session's losses, as market players embraced riskier assets despite another big jump in U.S. oil inventories.
Pivot: 2291 Support: 2291 2279 2268 Resistance: 2299 2310 2315 Scenario 1: long positions above 2291.00 with targets at 2299.00 & 2310.00 in extension. Scenario 2: below 2291.00 look for further downside with 2279.00 & 2268.00 as targets. Comment: the RSI is mixed with a bullish bias.