The dollar ended the week with little change against most major currencies on Friday after weaker-than-expected figures on U.S. fourth quarter growth.
Weak exports curb fourth-quarter economic growth in the U.S., causing a sharp slowdown. The annual rate of economic growth slowed to 1.9% in the three months to December the Commerce Department reported Friday, slowing sharply from the 3.5% rate of growth seen in the third quarter.
The economy grew just 1.6% in 2016 as a whole, the slowest rate of growth since 2011.
The slowdown in growth prompted speculation that the Federal Reserve will avoid hiking interest rates too quickly.
The dollar pushed higher against the yen, with USD/JPY rising 0.47%. The euro edged higher, with EUR/USD up 0.18% to 1.0698.
Meanwhile, the Mexican peso regained ground against the dollar on Friday as investors hoped for a compromise on trade between the U.S. and Mexico.
In the week ahead, markets will be paying close attention to Friday’s U.S. nonfarm payrolls report for January as well as Wednesday’s policy statement by the Federal Reserve.
Investors will also be watching central bank meetings in Japan and the UK.
EUR/USD
The euro gained slightly against the dollar on Friday, following the release of disappointing U.S. economic growth and durable goods orders data, which dampened optimism over the outlook for the economy under the Trump administration, and raised the possibility for a delayed rate hike by the Fed.
EUR/USD edged up 0.13% to 1.0693, after reaching a session low at 1.0657.
For today in the euro zone, Germany is to release preliminary data on inflation and later in the day, the U.S. is to release figures on personal income and spending as well as a report on pending home sales.
Pivot: 1.072Support: 1.072 1.069 1.0665Resistance: 1.0775 1.08 1.0835Scenario 1: long positions above 1.0720 with targets at 1.0775 & 1.0800 in extension.Scenario 2: below 1.0720 look for further downside with 1.0690 & 1.0665 as targets.Comment: the RSI lacks downward momentum.
Gold
Gold ended little changed on Friday, after weaker-than-expected figures on U.S. fourth quarter growth dampened expectations for a faster rate of interest rate hikes this year. The precious metal was 1.35% lower for the week, due to pressure coming from a stronger U.S. dollar.
In the week ahead, markets will be paying close attention to Friday’s U.S. nonfarm payrolls report for January as well as Wednesday’s policy statement by the Fed. Investors will also be watching central bank meetings in Japan and the UK.
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 finished lower on Friday, posting a small weekly loss, as investors turned their attention to rising production in the U.S. and away from OPEC and other producers' commitment to curbing global oversupply.
Prices dropped to the lowest levels of the session after oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 15 last week, the 12th gain in 13 weeks. That brought the total count to 566, the most since November 2015.
The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
In the week ahead, market participants will focus on the next weekly data on U.S. inventories due on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
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 mixed after the close on Friday, as gains in the Healthcare, Telecoms and Technology sectors led shares higher while losses in the Oil & Gas, Financials and Consumer Goods sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average fell 0.04%, while the S&P 500 index declined 0.09%, and the NASDAQ Composite index gained 0.10%.
One of the best performers of the session was Microsoft Corporation (NASDAQ:MSFT) which rose 2.35%, while some of the worst performers were Wal-Mart Stores Inc (NYSE:WMT) which declined 1.60% and Goldman Sachs Group Inc (NYSE:GS) which was down 1.10%.
In the week ahead, markets will be paying close attention to Friday’s U.S. nonfarm payrolls report for January as well as Wednesday’s policy statement by the Fed.
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.