The dollar fell against most major currencies on Wednesday, as investors questioned the progress of Trump’s economic policies while weaker than expected existing home sales weighed on sentiment.
The dollar continues to head lower as investors focus on the lack of progress from the Trump administration regarding his promised growth policies ahead of a key House vote on Thursday.
In the meantime weaker than expected existing home sales added to the downside momentum as the National Association of Realtors said on Wednesday, existing home sales declined 3.7% to an annual rate of 5.48 million units last month.
In addition, investors welcome the first round of Federal Reserve speakers, after the U.S. Central Bank raised rates last Wednesday.
For today, the UK is to produce data on retail sales and the US is to release the weekly report on jobless claims as well as data on new home sales.
Later, Fed Chair Janet Yellen is to deliver opening remarks at the Federal Reserve System Community Development Research Conference, in Washington DC.
Minnepolis Fed President Neel Kashkari at Strong Foundations Conference and Dallas Fed President Rob Kaplan are also due to speak.
GBP/USDThe pound moved lower against the dollar on Wednesday, following a reported terror incident in the UK, only to recover later in the day with GBP/USD trading roughly flat at $1.2482.
An assailant stabbed a policeman and was shot by police just outside Britain's parliament building in London in what police described as a "terrorist incident".
Sterling earlier hit a four-week high of $1.2507, having surged 3 percent in the past week on the back of a weaker dollar and after reports showed a rapidly accelerating inflation.
For today, the UK is to produce data on retail sales and the US is to release the weekly report on jobless claims as well as data on new home sales.
Pivot: 1.2425Support: 1.2425 1.238 1.2335Resistance: 1.2535 1.2565 1.2595Scenario 1: long positions above 1.2425 with targets at 1.2535 & 1.2565 in extension.Scenario 2: below 1.2425 look for further downside with 1.2380 & 1.2335 as targets.Comment: the RSI shows upside momentum.
Gold prices continue to gain on Wednesday hitting temporarily the $1250 level, as investors focus on the lack of progress concerning the Trump administration’s promised tax-cuts and deregulation reforms ahead of a key House vote on Thursday.
House Republicans plan to vote on their bill to repeal and replace the Affordable Care Act on Thursday.
Meanwhile weaker than expected U.S. home resales weighed on the U.S. dollar and added a layer of supported for dollar-denominated gold.
Housing data, jobless claims and durable goods orders from the U.S. will be in the spotlight for the remaining of the week.
Pivot: 1244.3Support: 1244.3 1239.5 1235.5Resistance: 1251.5 1255 1258Scenario 1: long positions above 1244.30 with targets at 1251.50 & 1255.00 in extension.Scenario 2: below 1244.30 look for further downside with 1239.50 & 1235.50 as targets.Comment: a support base at 1244.30 has formed and has allowed for a temporary stabilisation.
Crude futures settled lower on Wednesday, after the latest Energy Information Administration (EIA) report showed a faster rise than expected in U.S. crude inventories.
For last week the EIA said that crude oil inventories rose by 5 million barrels to 533.1 million barrels compared to estimates of an increase of only 2.8 million barrels. Gasoline inventories fell by 2.811 million against expectations for a drop of 2.008 million barrels while distillate stockpiles fell by 1.910 million barrels, compared to expectations of a 1.386 million decline.
Crude futures have retreat for a third straight day, on worries that a rise up in U.S. crude oil production may dampen OPEC’s efforts to support prices.
Friday’s oil rig count report by Baker Hughes remains in focus for energy traders.
Pivot: 47.8Support: 47.8 47.45 47Resistance: 48.92 49.17 49.5Scenario 1: long positions above 47.80 with targets at 48.92 & 49.17 in extension.Scenario 2: below 47.80 look for further downside with 47.45 & 47.00 as targets.Comment: the RSI advocates for further advance.
Transportation and infrastructure shares are trading lower this week along with a major drop in U.S. financial shares.
The Dow Jones Transportation Average, seen as a barometer of economic health, rose after the election and closed at a record high on March 1 but is now down nearly 5 percent for the month so far.
Steel shares, which gained just after the Nov. 8 election, fell sharply this week and are down for the month of March. Also, the S&P 1500 construction and engineering index is down 3.6 percent so far for March.
Investors are worried that if the Trump administration cannot pass a healthcare bill that is up for vote this week, it will be harder to deliver on the promises for tax and regulatory reform, which helped propel bank stocks to their highest levels since November 2007.
Pivot: 2330 Support: 2330 2298 2246 Resistance: 2400 2450 2500 Scenario 1: long positions above 2330.00 with targets at 2400.00 & 2450.00 in extension. Scenario 2: below 2330.00 look for further downside with 2298.00 & 2246.00 as targets. Comment: the RSI is supported by a rising trend line. Supported by a rising trendline.