The dollar remained at five-month lows against the other major currencies on Thursday, despite the release of positive U.S. data, as the Federal Reserve’s latest policy decision continued to weigh on the greenback.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 12 increased by 7,000 to 265,000, from the previous week’s total of 258,000.
In addition, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 12.4 this month, from February's reading of -2.8. The dollar remained under pressure after the Fed left its monetary policy unchanged on Wednesday and said that it is likely to raise interest rates twice this year – and not four times, as initially estimated.
Always on Thursday, in the euro zone, final data showed that the consumer price index rose 0.2% in February, exceeding expectations for a 0.1% uptick. Year-on-year, consumer prices fell 0.2% last month. Core CPI rose 0.4% in February, after a 1.7% decline the previous month.
Canada is to produce data on retail sales and inflation, while the U.S. is to round up the week with data on consumer sentiment.
The euro extended sharp gains from the previous session surging to five-month highs, as foreign exchange traders continued to digest a dovish monetary policy decision from the Federal Reserve 24 hours earlier.
The currency pair traded in a broad range between 1.1206 and 1.1343, before settling up 0.88% on the session. At session-highs, the euro soared to its strongest level against the dollar since mid-October. The developments may be unsettling for Mario Draghi and his colleagues at the European Central Bank, whose efforts to depress the euro as a means for boosting exports are increasing appearing futile. Since the ECB's Governing Council approved a wide range of easing measures last week, the euro has jumped nearly 3% against the dollar.
Today investors’ focus will be on U.S. data on consumer sentiment, for further information on the strength of the greenback.
Pivot: 1.124Support: 1.124 1.12 1.1165Resistance: 1.1345 1.1375 1.141Scenario 1: long positions above 1.1240 with targets @ 1.1345 & 1.1375 in extension.Scenario 2: below 1.1240 look for further downside with 1.1200 & 1.1165 as targets.Comment: the RSI is mixed with a bullish bias.
Silver
Gold built on gains from the previous day's surge on Thursday, as investors continued to react to a surprising move from the Federal Reserve to lower its interest rate forecast for the near-term future.
The precious metal traded in a broad range between $1,255.30 and $1,271.80 an ounce, before settling up 2.98% on the session. With the sharp gains, gold erased most of its losses from a brief sell-off over the previous week and a half when the precious metal fell by $40 an ounce. Since opening 2016 around $1,075, gold has surged more than 16%, posting one of its strongest starts to a year in three decades.
Today the U.S. is to round up the week preliminary data on consumer sentiment, while Fed Governors William Dudley, Eric Rosengren and James Bullard are due to speak at public events throughout the day.
Pivot: 1254Support: 1254 1235 1225Resistance: 1276 1286 1292Scenario 1: long positions above 1254 with targets @ 1276 & 1284 in extension.Scenario 2: below 1254 look for further downside with 1235 & 1225 as targets.Comment: the RSI is mixed with a bullish bias.
WTI Oil
U.S. crude surged more than 4% on Thursday, closing above $40 for the first time in more than three months, as the dollar continued its downward spiral in the wake of the Federal Reserve's dovish monetary policy decision 24 hours earlier.
WTI crude for April delivery traded in a broad range between $38.48 and $40.25 a barrel, before settling up 4.42% on the session.
The latest rally was triggered by reports on Wednesday that OPEC and Non-OPEC producers will meet in mid-April in Doha in their latest effort to stabilize oil prices. Next month's meeting will be held regardless of Iran willingness to join in on the talks, Al-Sada said, representing a shift in OPEC's stance on limiting production.
Today Baker Hughes will release weekly data on the U.S. oil rig count, which will be closely watched.
Pivot: 39Support: 39 38.15 37.45Resistance: 41 41.55 42.6Scenario 1: long positions above 39.00 with targets @ 41.00 & 41.55 in extension.Scenario 2: below 39.00 look for further downside with 38.15 & 37.45 as targets.Comment: the RSI lacks downward momentum.
US 500
U.S. stocks rose sharply on Thursday, continuing their dramatic rebound from a massive sell-off at the start of the New Year, as a plummeting dollar helped push oil prices above $40 a barrel for the first time in more than three months.
The Dow Jones Industrial Average gained 0.9%; while the NASDAQ Composite index added 0.23%; meanwhile the S&P 500 Composite index gained 0.66%, as nine of 10 sectors closed in the green. Stocks in the Basic Materials, Industrials and Energy industries led, each gaining at least 1.5%. Stocks in the Health Care sector lagged.
Today the U.S. is to round up the week preliminary data on consumer sentiment, while Fed Governors William Dudley, Eric Rosengren and James Bullard are due to speak at public events throughout the day.
Pivot: 1930 Support: 1930 1890 1810 Resistance: 2043 2080 2115 Scenario 1: long positions above 1930 with targets @ 2043 & 2080 in extension. Scenario 2: below 1930 look for further downside with 1890 & 1810 as targets. Comment: the RSI is mixed. Prices have confirmed a double-bottom pattern. The 20-day simple moving average has turned up and now plays a suppport role. Caution: The RSI is overbought (same situation as November 2015).