The U.S. dollar extended losses against other major currencies on Thursday, despite the latest positive economic releases on U.S. employment and business climate.
The U.S. Department of Labor said initial jobless claims increased by 5,000 to 239,000 in the week ending February 11 from the previous week’s total of 234,000. Analysts expected jobless claims to rise by 11,000 to 245,000 last week.
In addition, the Philadelphia Federal Reserve said its business conditions index jumped to 43.3 this month from 23.6 in January, which was the highest level since November 2014. Economists had expected a reading of 18.0 this month.
The fall in the U.S. dollar appears to ignore hopes of a March rate hike, after Fed Chair Janet Yellen, in her testimony to congress on Wednesday, hinted that more interest rate increases were on the way, as the US economy is “coming close to achieving Fed mandates”.
The Euro starts to recover, after it ended a four-day losing streak in Wednesday session. Elsewhere GBP/USD traded close to session lows of $1.2523, as market participants' look ahead to UK retail sales, expected on Friday at 09:30 GMT.
In the next week investors will be focusing on the Fed’s last policy meeting minutes for fresh indications on its future monetary policy while a batch of manufacturing PMI data will be released from the Eurozone.
The euro climbed 0.7 percent against the dollar [i] on Thursday, despite the release of positive employment and business conditions data from the US, with the pair trading around $1.0674. Investors continue to watch Greece in it’s efforts for reaching a deal on the country’s next bailout payment before February 20th.
The drop in the U.S. dollar comes even after renewed hopes of a March rate hike, following Fed Janet Yellen’s hawkish comments in her testimony to congress on Wednesday.
In the next week investors will be focusing on the Fed’s last policy meeting minutes for fresh indications on its future monetary policy while a batch of manufacturing PMI data will be released from the Eurozone.
Pivot: 1.0645Support: 1.0645 1.062 1.0595Resistance: 1.0685 1.071 1.0745Scenario 1: long positions above 1.0645 with targets at 1.0685 & 1.0710 in extension.Scenario 2: below 1.0645 look for further downside with 1.0620 & 1.0595 as targets.Comment: the RSI lacks downward momentum.
Gold
Gold prices continue to gain on Thursday, heading to cross the $1240 level and to reach last week’s high at $1245 despite the fact that hawkish comments by Fed Chair Janet Yellen combined with better-than-expected U.S. economic data this week boosted prospects of a March interest rate hike from the Fed.
Fed fund futures priced in around a 27% chance of a rate hike in March, according to Fed Rate Monitor Tool, up from less than 10% at the start of the week.
In the coming week, minutes from the Fed’s last meeting will be in focus along with developments regarding the Greek bailout, the French and German elections, and the Brexit.
Pivot: 1235.5Support: 1235.5 1232 1228Resistance: 1242 1245 1249Scenario 1: long positions above 1235.50 with targets at 1242.00 & 1245.00 in extension.Scenario 2: below 1235.50 look for further downside with 1232.00 & 1228.00 as targets.Comment: the RSI lacks downward momentum.
WTI Oil
Crude oil prices bounced off session lows and settled more than 0.5% higher on Thursday [i], following reports OPEC could extend its output-cut agreement to non-members amid concerns of a surge in U.S. production.
Crude prices have come under pressure in recent sessions, as the latest drilling reports from the U.S. Energy Information Administration (EIA), increased fears that drilling activity from U.S. will offset OPEC and other producers’ efforts to combat the demand and supply imbalance in the industry.
A report on U.S. drilling rigs by Baker Hughes is in focus for today.
Pivot: 53.25Support: 53.25 52.95 52.78Resistance: 53.55 53.7 53.95Scenario 1: long positions above 53.25 with targets at 53.55 & 53.70 in extension.Scenario 2: below 53.25 look for further downside with 52.95 & 52.78 as targets.Comment: the RSI lacks downward momentum.
US 30
The Dow Jones Industrial Average posted a sixth straight record high on Thursday, while the S&P 500 edged lower due to declining energy stocks.
It was a mixed day on Wall Street as investors digested recent gains and sold bank shares that have posted an excessive rally recently.
The S&P 500 gained about 5 percent so far in 2017, and the Dow Jones Industrial Average up 4 percent as signs of an improving economy and promises by President Donald Trump to cut corporate taxes and reduce financial regulations have been behind much of the recent gains.
Now, with a strong fourth-quarter earnings season mostly complete, many investors say they need concrete signs of progress from Trump to justify more gains.
Pivot: 20640 Support: 20525 20475 20390 Resistance: 20640 20700 20775 Scenario 1: short positions below 20640.00 with targets at 20525.00 & 20475.00 in extension. Scenario 2: above 20640.00 look for further upside with 20700.00 & 20775.00 as targets. Comment: the RSI calls for a new downleg.