The dollar moved slightly higher against most major currencies on Wednesday, following Tuesday’s strong U.S. housing sector data which continue to provide support, while trading was expected to remain quiet with no major data to be released throughout the day. Sterling eased further against the dollar after the U.K. Office for National Statistics reported that public sector net borrowing fell to £8.63 billion in September from £10.79 billion in August, whose figure was revised from a previously estimated £11.31 billion. Analysts had expected public sector net borrowing to decline to £9.40 billion last month. Meanwhile, USD/CAD rallied 0.92% to trade at two-week highs of 1.3106 after the Bank of Canada decided to hold its benchmark interest rate at 0.50%, in a widely expected move, and downgraded its economic outlook citing the "complex" aftershocks of lower oil prices. On Thursday, the ECB's governing council will conclude its two-day meeting in Malta, one of two annual meetings its holds each year outside Frankfurt. Traders appear hesitant to make any major moves ahead of the ECB meeting. Other major releases for today are the Spanish unemployment rate, U.K retail sales, U.S. jobless claims and U.S. existing home sales.
EUR/USD ended Wednesday's session almost unchanged trading in a tight range between 1.1324 and 1.1386, still supported by Tuesday’s positive housing data. The dollar continues to show little movement against the euro on Thursday, as investors remain on the side-lines ahead of the ECB monetary policy meeting in Malta where an extension of the bank’s current monetary policy program is anticipated. Later in the day, the focus will shift to the U.S. and specifically on U.S. jobless claims and existing home sales data for further indications on the strength of the economy. For next week, the Federal Reserve's policy meeting will be in the spotlight. Other major releases for today are the Spanish unemployment rate, U.S. jobless claims and U.S. existing home sales.
Pivot: 1.1395Support: 1.1305 1.1265 1.123Resistance: 1.1395 1.145 1.1495Scenario 1: Short positions below 1.1395 with targets @ 1.1305 & 1.1265 in extension.Scenario 2: Above 1.1395 look for further upside with 1.145 & 1.1495 as targets.Comment: As long as 1.1395 is resistance, look for choppy price action with a bearish bias.
WTI Oil
Crude oil prices fell considerably on Wednesday dipping to near October lows, as U.S. stockpiles shot up last week adding to long-term concerns related to a record-high supply on energy markets nationwide. Crude oil prices traded in a broad range between $44.88 and $46.08 a barrel, before settling at $45.20, down by more than 2% for the day. The U.S. Energy Information Administration (EIA) said U.S. crude stockpiles surged by 8 million for the week ending on Oct. 16. At 476.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least 80 years. On Wednesday, an OPEC meeting in Vienna with eight non-OPEC members, including Russia, did not produce any meaningful headlines. Investors are now looking ahead to next week's Federal Reserve open market meeting on Oct. 27-28 to see if there are any policy changes that could affect the dollar.
Pivot: 45.8Support: 44.85 44.45 43.95Resistance: 45.8 46.4 46.95Scenario 1: Short positions below 45.8 with targets @ 44.85 & 44.45 in extension.Scenario 2: Above 45.8 look for further upside with 46.4 & 46.95 as targets.Comment: As long as 45.8 is resistance, likely decline to 44.85.
U.S. stocks fell slightly on Wednesday as a sell-off among Health Care and Biotechnology stocks offset gains from a GM and Boeing-inspired rally. Shares in Valeant Pharmaceuticals International Inc (N:VRX) fell as much as 25% after a report from short-seller Citron Research accused the $50 billion pharmaceutical giant of a wide range of improprieties, including creating fake invoices for deceiving auditors and booking artificially high revenues. The biotech sector managed to recover most of the day's losses by market close but bearish sentiment still remains. The S&P 500 was down 0.58%, the Dow Jones Industrial Average slid 0.28%, and the Nasdaq fell 0.84%. Markets focus remains on third quarter corporate earnings data, while iinvestors are also looking ahead to next week's Federal Reserve open market meeting on Oct. 27-28 to see if there are any policy changes that could affect the dollar
Pivot: 2044Support: 1867 1820 1798Resistance: 2044 2135 2180Scenario 1: Short positions below 2044 with targets @ 1952 & 1867 in extension.Scenario 2: Above 2044 look for further upside with 2135 & 2180 as targets.Comment: As long as 2044 is resistance, look for choppy price action with a bearish bias.
Coca-Cola
Coca-Cola (KO) reported sales of $11.4 billion, slightly below forecasts. Revenue dipped from a year earlier as the effects of a stronger U.S. dollar had a strong impact on sales being brought back to the U.S. from overseas.
Pivot: 40.4 Support: 36.55 35.55 34.9 Resistance: 40.4 42.25 43.7 Scenario 1: Short positions below 40.4 with targets @ 36.55 & 35.55 in extension. Scenario 2: Above 40.4 look for further upside with 42.25 & 43.7 as targets. Comment: The RSI lacks upward momentum.