The dollar traded mixed against other major currencies on Friday, as recent comments by the Federal Reserve as investors awaited the release of second-quarter growth data due later in the day.
The dollar remained under pressure after the Fed said that inflation remains below its 2% target even as near-term risks to the economic outlook appear “roughly balanced.”
Economic data is pointing to potential headwinds in the U.S. labor market as the U.S. Department of Labor reported Thursday that initial jobless claims rose by more than expected to 244,000 in the week ended July 23, missing forecasts of a 7,000 decline.
However, better than expected durable goods orders data for June provided some support to the dollar helping it recover.
Today, in the euro zone, Germany is to release preliminary inflation data and Canada is to release monthly data on economic growth. The U.S. is to round up the week with advance data on second quarter growth.
The euro continues reached fresh two year highs on Thursday, only to return and end the day in negative territory on Thursday, as weak jobless claims data was offset by a solid durable goods orders report.
Cautious wording by the Fed on the inflation outlook continues to weigh on the dollar, supporting the view that the Fed might not hike interest rates again this year.
For today, the focus is shifted towards Germany’s preliminary inflation data while the U.S. is to close the week with advance data on second quarter growth.
Pivot: 1.1705
Support: 1.165 1.162 1.158
Resistance: 1.1705 1.1735 1.1775
Scenario 1: short positions below 1.1705 with targets at 1.1650 & 1.1620 in extension.
Scenario 2: above 1.1705 look for further upside with 1.1735 & 1.1775 as targets.
Comment: the upward potential is likely to be limited by the resistance at 1.1705.
Gold
Gold prices fluctuated between gains and losses on Thursday, ending the day slightly lower, supported by a recent wave of uncertainty caused by the Fed’s comments while at the same time receiving pressure by a solid durable goods orders report and optimistic views on second quarter US growth.
He precious metal has risen by almost 5% in the last 2 weeks, currently trading in a range between $1254 to $1265 on Thursday, with today’s GDP data from the US expected to provide direction to prices.
Pivot: 1254
Support: 1254 1250.5 1248
Resistance: 1264 1267 1270
Scenario 1: long positions above 1254.00 with targets at 1264.00 & 1267.00 in extension.
Scenario 2: below 1254.00 look for further downside with 1250.50 & 1248.00 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
WTI Oil
Oil prices finished higher for the fourth-session in a row onThursday, as data showing a fourth consecutive week of declines in U.S. crude inventories added to optimism that the market was rebalancing.
U.S. oil inventories fell by 7.2 million barrels at the end of last week to 483.4 million barrels, much more than the expected drop of around 2.6 million barrels.
Oil is on track to score a weekly gain of more than 6% as fresh pledges from Saudi Arabia and Nigeria to respectively pull back on exports and output boosted sentiment.
Data on active oil rigs on Friday will remain infocus for further signs on demand for crude and refinery activity.
Pivot: 48.25
Support: 48.25 47.7 47.17
Resistance: 49.58 50.17 50.7
Scenario 1: long positions above 48.25 with targets at 49.58 & 50.17 in extension.
Scenario 2: below 48.25 look for further downside with 47.70 & 47.17 as targets.
Comment: a support base at 48.25 has formed and has allowed for a temporary stabilisation.
US 500
The main US indices were mixed on Thursday, as gains in the Telecoms, Oil & Gas and Consumer Services sectors led shares higher while losses in the Technology, Healthcare and Basic Materials sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average gained 0.39% to hit a new all time high, while the S&P 500 index lost 0.10%, and the NASDAQ Composite index declined 0.63%.
The best performers of the session were Verizon Communications (NYSE:VZ) which rose 7.68% and Boeing (NYSE:BA) which added 3.23%. The worst performers of the session were Apple Inc (NASDAQ:AAPL) which fell 1.89% and American Express Company (NYSE:AXP) which declined 1.70%.
Stock traders will be watching closely on Friday’s data for second quarter growth in the US.
Pivot: 2470.5
Support: 2470.5 2463.75 2458
Resistance: 2480 2485 2490
Scenario 1: long positions above 2470.50 with targets at 2480.00 & 2485.00 in extension.
Scenario 2: below 2470.50 look for further downside with 2463.75 & 2458.00 as targets.
Comment: the RSI is mixed to bullish.