The dollar ended in negative territory against the euro on Wednesday but gained against most other currencies on hopes for fresh easing measures by the Bank of China after the country’s finance ministry said it would introduce "more forceful" fiscal measures in order to boost slowing economic growth. Data from China added to worries about slow global growth, weakening investors' appetite for risky assets. China's consumer inflation in August moved up, but producer prices fell for the 42nd straight month indicating that deflation remains a significant risk for the world's second-largest economy. In addition, the Reserve Bank of New Zealand which cut its benchmark rate by 25 basis points to 2.75 percent, signalled more easing if China's economy slows further. Furthermore, Japan's key capital spending index unexpectedly fell for a second straight month, signaling that the economy is struggling to get back on track after contracting in the second quarter. For today, The Bank of England is to announce its rate statement and the U.S. is to release data on initial jobless claims.
The euro gained slightly against the dollar on Wednesday, despite optimistic data on U.S. job openings which raise expectations for a September interest rate hike. The U.S. Labor Department said on Wednesday in its Job Openings and Labor Turnover Survey that nationwide openings increased to a new high in July. After falling below 1.10 on August 10, the euro is now up 2.2% against the dollar over the last month. Prior to next week’s monetary policy meeting by the Fed, investors are now focusing on upcoming data on U.S. initial jobless claims, producer price and consumer sentiment data from the U.S. and the European Union finance minister talks in Brussels.
Pivot:1.1185
Support:1.11851.1131.109
Resistance:1.1261.1291.132
Scenario 1:Long positions above 1.1185 with targets @ 1.126 & 1.129 in extension.
Scenario 2:Below 1.1185 look for further downside with 1.113 & 1.109 as targets.
Comment:Technically the RSI is above its neutrality area at 50.
WTI Oil
Crude oil prices fell sharply on Wednesday, due to a stronger dollar and as industry data showed an increase in U.S. crude supplies. The American Petroleum Institute said that crude oil inventories rose last week by 2.1 million barrels, far above the 300,000 barrels build expected. In addition, the Energy Information Administration lowered its forecast for crude prices through 2016. Prices fell by more than 3% on Wednesday and analysts expect demand to fall considerably over the next several weeks following the completion of the summer driving season. On Thursday, the U.S. Department of Energy will release the more closely-watched government data on U.S. crude oil inventories.
Pivot:46.4
Support:43.241.7540.5
Resistance:46.447.2548.45
Scenario 1:Short positions below 46.4 with targets @ 43.2 & 41.75 in extension.
Scenario 2:Above 46.4 look for further upside with 47.25 & 48.45 as targets.
Comment:As long as 46.4 is resistance, likely decline to 43.2.
Dow Jones
A new major crude oil selloff added some strong support on the U.S. stock market on Wednesday causing all 3 main indices ending the in the negative by more than 1%. The stock market was gaining early on Wednesday until the Energy Information Administration, lowered its forecast for crude prices through 2016 prompting a decline across commodities. In addition, further easing measures from China to tackle growth and more job openings announced by the U.S. JOLTS report raised fears that the Federal Reserve had another reason to hike rates sooner than later. Dow Jones Industrial Average fell 1.5% with Apple (NASDAQ:AAPL) being one of the worst performers, ending the day lower by almost 2% as expectations were so high ahead of the latest event. For today, market focus is on U.S. initial jobless claims data.
Pivot:16190
Support:161901599015900
Resistance:167251695517120
Scenario 1:Long positions above 16190 with targets @ 16725 & 16955 in extension.
Scenario 2:Below 16190 look for further downside with 15990 & 15900 as targets.
Comment:The RSI is mixed with a bullish bias.
NETFLIX
Netflix (NASDAQ:NFLX) climbed more than 4% on news it will continue to infiltrate the Asian market. The streaming service is reportedly preparing to launch in South Korea, Hong Kong, Singapore and Taiwan at the beginning of next year.
