The dollar pushed lower to a one-week trough against the other major currencies on Thursday, as investors continued to lock-in profits from the greenback’s recent rally to two-month highs, after the release of strong U.S. data added to expectations for an upcoming U.S. rate hike.
The U.S. National Association of Realtors said pending home sales rose by 5.1% last month, beating expectations for a gain of 0.6% and hitting the highest level in over a decade. The report came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 21 decreased by 10,000 to 268,000, from the previous week’s total of 278,000; while analysts expected jobless claims to fall by 3,000 to 275,000 last week. Separately, the U.S. Commerce Department said durable goods orders rose 3.4% last month, compared to economists' expectations for an increase of 0.5%. Core durablegoods orders, which exclude volatile transportation items, rose 0.4% last month, compared to forecasts for a 0.3% gain.
Elsewhere the euro gained ground after Greece and its creditors reached a deal on Wednesday to unlock €10 billion in bailout funds and trigger work on debt relief, easing concerns over another euro zone debt crisis.
Today the U.S. is to round up the week with a revised estimate of first quarter growth and revised data on consumer sentiment, while this afternoon the Yellen will make her first public appearance in nearly two months at a ceremony when she receives the Radcliffe Medal from Harvard University's Radcliffe Institute for Advanced Study.
The euro rose moderately on Thursday, extending slight gains from the previous session, as foreign exchange traders awaited comments from Janet Yellen for possible signs of whether the Federal Reserve could tighten its monetary policy cycle next, while the European Central Bank maintains an unorthodox negative interest rate policy.
The currency pair traded between 1.1155 and 1.1217, before settling up 0.34% for the session. Despite the brief gains over the last two sessions, the euro is still in the midst of one of its driest spells on the calendar year. Since hitting nine-months in early-May, EUR/USD has fallen considerably by nearly 3%.
Today Yellen will make her first public appearance in nearly two months at a ceremony when she receives the Radcliffe Medal from Harvard University's Radcliffe Institute for Advanced Study, and investors are hoping that she could provide further hints on the pace of the Fed's long-term rate path in a Question-And-Answer session with Harvard economics professor Gregory Mankiw after the presentation.
Pivot: 1.1165Support: 1.1165 1.1145 1.113Resistance: 1.1215 1.123 1.1225Scenario 1: long positions above 1.1165 with targets @ 1.1215 & 1.1230 in extension.Scenario 2: below 1.1165 look for further downside with 1.1145 & 1.1130 as targets.Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Gold
Gold closed virtually flat on Thursday, amid strong U.S. economic data and a slightly lower dollar, as investors await a highly-anticipated appearance from Federal Reserve chair Janet Yellen for further signals on whether the U.S. central bank could raise interest rates at a closely-watched meeting next month.
The precious metal traded between $1,218.50 and $1,234.00 an ounce before settling down $3.30 or 0.27% on the session. Gold suffered its seventh straight loss and eighth losing session over the last 10 trading days, while remaining near 7-week lows. Despite the recent downturn, the yellow metal is up by more than 13% since the start of the year and is on pace for one of its strongest first halves of a year in more than a decade.
Pivot: 1227Support: 1211.5 1207 1202Resistance: 1227 1234.5 1242.5Scenario 1: short positions below 1227.00 with targets @ 1211.50 & 1207.00 in extension.Scenario 2: above 1227.00 look for further upside with 1234.50 & 1242.50 as targets.Comment: technically the RSI is below its neutrality area at 50.
WTI Oil
Crude futures cleared the $50 hurdle for the first time since October on Thursday, before falling back to close slightly lower for the session, as investors responded to reports of further supply disruptions in Nigeria and growing Asian demand for Saudi Arabian oil.
WTI crude for June delivery traded in a broad range between $49.23 and $50.21 a barrel before settling down 0.10 or 0.20% on the session.
In overnight, Asian trading, crude eclipsed a key psychological barrier of $50 a barrel after a group of militant avengers in the Niger delta region of Southern Nigeria claimed responsibility for an attack that shut down Chevron (NYSE:CVX)'s oil facility in the area. It was the latest assault against a major oil company by the Niger Delta Avengers, a local group that has targeted global energy companies in an attempt to defend the environment.
Today Baker Hughes will release weekly data on the U.S. oil rig count, which will be closely watched.
Pivot: 48.9Support: 48.9 48.2 47.65Resistance: 50.23 50.6 51.14Scenario 1: long positions above 48.90 with targets @ 50.23 & 50.60 in extension.Scenario 2: below 48.90 look for further downside with 48.20 & 47.65 as targets.Comment: a support base at 48.90 has formed and has allowed for a temporary stabilisation.
US 500
U.S. stocks were mixed on Thursday, losing momentum from the strongest two day rally since late-March, as investors traded cautiously ahead of a speech from Federal Reserve chair Janet Yellen and oil pared gains after hitting $50 a barrel for the first time this year.
As a result, stocks in the energy industry are up 12% this year – the top performing sector on the S&P 500 Composite index.
The Dow Jones Industrial Average lost 0.13%, while the S&P 500 fell 0.02%, as the major indices remained flat for the month of May; and the NASDAQ Composite index, meanwhile, inched up 0.14%, amid strong performances from Yahoo! Inc (NASDAQ:YHOO) and Netflix Inc (NASDAQ:NFLX). On the S&P 500, five of 10 sectors closed in the red as stocks in the Basic Materials, Energy and Financials industries lagged. Stocks in the Utilities and Telecommunications sector led, each gaining more than 0.2%.
Pivot: 2025 Support: 2025 1970 1950 Resistance: 2100 2130 2190 Scenario 1: long positions above 2025.00 with targets @ 2100.00 & 2130.00 in extension. Scenario 2: below 2025.00 look for further downside with 1970.00 & 1950.00 as targets. Comment: the RSI is bullish and calls for further advance. A bullish continuation flag is confirmed.