On Thursday the dollar slid lower against the other major currencies, as investors locked in profits from the greenback's broad rally following fresh signs of a potential U.S. rate hike before the end of the year. The greenback registered losses even if data showed that the number of people who filed for unemployment assistance in the U.S. fell in line with expectations last week.
The U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending November 14 declined by 5,000 to 271,000 from the previous week’s total of 276,000. First-time jobless claims have held below the 300,000-level for 36 consecutive weeks, which is usually associated with a firming labor market.
At the same time, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 1.9 this month, from October's reading of -4.5, above analysts’ expectations.
Today ECB head Mario Draghi is to speak at an event in Frankfurt, the U.K. is to release data on public sector borrowing and Canada is to round up the week with data on retail sales and consumer inflation.
On Thursday the euro rallied considerably, to move above near seven month lows, even if the minutes of the European Central Bank’s October meeting said the risk that it would miss its inflation target again has increased.
Most members of the Governing Council shared the view that inflation risks have increased and anticipated the timing of inflation getting back to target is likely to be pushed back again.
The central bank reiterated that it is ready to act and would reexamine its policies at its upcoming meeting on December 3.
Today investors’ focus will be on Mario Draghi’ speech at an event in Frankfurt, to gain more information on the strength of the European economy.
Pivot: 1.067Support: 1.067 1.062 1.056Resistance: 1.0765 1.081 1.083Scenario 1: Long positions above 1.067 with targets @ 1.0765 & 1.081 in extension.Scenario 2: Below 1.067 look for further downside with 1.062 & 1.056 as targets.Comment: The RSI is well directed.
Gold
Gold surged by more than 1% on Thursday amid a weaker dollar, as investors covered short positions one day after the precious metal fell to fresh five-year lows.
But despite this, gold futures are nearly 10% below highs hit in mid-October, as investors recalibrated their expectations of U.S. monetary policy in response to hawkish signals from the Fed.
Metal traders also kept an eye on developments related to last week's terrorist attacks in Paris, after authorities in Saint Denis detained seven suspects and killed two others in raids on Wednesday. Abdelhamid Abaaoud, the suspected ringleader of the attacks, was killed in the roundup. Separately, terrorist attacks in the West Bank on Thursday claimed the lives of three people, including an American tourist.
Gold prices gained also in Asia on Friday, with investors seeing some support on political risk, but an expected Federal Reserve rate hike next month weights.
Pivot: 1077Support: 1077 1070 1064Resistance: 1090 1094.5 1098Scenario 1: Long positions above 1077 with targets @ 1090 & 1094.5 in extension.Scenario 2: Below 1077 look for further downside with 1070 & 1064 as targets.Comment: The RSI is mixed to bullish.
WTI Oil
Oil prices reversed earlier gains sliding around $40 on Thursday, reaching near 10-week lows, as lingering concerns over a glut in world markets drove down prices.
Traders are preparing for another downward turn in prices by March 2016, market data suggests, as what is expected to be an unusually warm winter dents demand just as Iran's resurgent crude exports hit global markets after sanctions end.
Big oil suppliers have started requiring prepayment when selling crude and refined products to Venezuela's PDVSA, a bid to curb potential risks from the state-run company's cash flow, sources involved in the deals told Reuters.
OPEC will meet on December 4 to decide whether to extend their strategy of defending market share by keeping production high.
Pivot: 41.5Support: 40 39.2 38.3Resistance: 41.5 42.25 43.3Scenario 1: Short positions below 41.5 with targets @ 40 & 39.2 in extension.Scenario 2: Above 41.5 look for further upside with 42.25 & 43.3 as targets.Comment: As long as 41.5 is resistance, likely decline to 40.
Wall Street ended a little lower on Thursday, as falling healthcare stocks offset gains in Intel (O:INTC) and other technology names, while investors eyed an expected rate hike in December.
The S&P healthcare sector was the worst performer among the 10 major S&P sectors, with a 1.63% decline.
The Dow Jones industrial average closed the day 0.02% weaker at 17,732.75 points, while the S&P 500 lost 0.11% to 2,081.24, and the Nasdaq Composite edged 0.03% lower to 5,073.64.
Data on Thursday appeared to support the Federal Reserve's view of a strengthening labor market ahead of its meeting next month. The number of Americans filing for unemployment benefits fell last week.
Pivot: 1990 Support: 1990 1928 1867 Resistance: 2116 2135 2180 Scenario 1: Long positions above 1990 with targets @ 2116 & 2135 in extension. Scenario 2: Below 1990 look for further downside with 1928 & 1867 as targets. Comment: The RSI is above its neutrality area at 50%.