The US Dollar traded lower against other major currencies with the US Dollar Index (USDX) closing 0.79% lower due to Durable Goods New Orders below expectations and the FOMC stating in its minutes that it is concerned that the economy could overheat at some point.
The South African Rand (ZAR) improved over 1 percent against the US Dollar as investors have mixed expectations whether rating agencies Moody’s and S&P would downgrade the country’s sovereign rating to “junk”.
Gold edged higher on lower long term Treasury yields and fears of an inverted yield curve which some investors believe could indicate a long term lower growth expectation. Oil raced higher reaching a new 2.5 year high as the Energy Information Administration’s (EIA) US oil stockpile figures were lower by 1.9 million barrels. Markets will continue to evaluate what progress the OPEC will make of an extension agreement for production cuts at their meeting on the 30th November in Vienna.
US equity indices closed mostly lower after mixed economic data and concern by the Federal Reserve that the markets could be showing signs of overheating.
Bitcoin traded within Tuesday’s range and held over a week a gain of over 13%. Other major cryptocurrencies were also higher with Dash and Monero continuing their rally with a weekly performance of close to 40% higher. Fundstrat's Tom Lee, a leading Wall Street analyst, raised its outlook for mid-2018 for Bitcoin to $11,500 after being less optimistic in the past.
On Thursday Germany is publishing GDP, Services and Manufacturing PMI data complemented by said PMI data from the European Union. From France we will see the Business Climate Indicator. The European Central Bank (ECB) is set to release its meeting’s minutes. The United Kingdom will publish GDP and CBI Distributive Trades data. Canada publishes Retail Sales statistics.
EUR/USDThe Euro sharply gained against the US Dollar on Wednesday as the FOMC minutes indicated that the central bank fears imbalances in the markets while being supporting of the proposed tax reform by the Trump administration. The Durable Goods New Orders were in monthly comparison down by 1.2% (previous +2.2%), while traders expected a gain of 0.4%.
On Thursday Germany is publishing GDP, Services and Manufacturing PMI data complemented by said PMI data from the European Union. From France we will see the Business Climate Indicator. The European Central Bank (ECB) is set to release its meeting’s minutes.
Pivot: 1.1775
Support: 1.1775 1.173 1.171
Resistance: 1.185 1.188 1.1925
Scenario 1: long positions above 1.1775 with targets at 1.1850 & 1.1880 in extension.
Scenario 2: below 1.1775 look for further downside with 1.1730 & 1.1710 as targets.
Comment: the RSI shows upside momentum.
A weaker Dollar and lower long term US Treasury yields pushed gold higher. Markets are concerned that the yield curve flattening could turn into a curve inversion which is believed could lower the long term economic outlook.
Amid the Thanksgiving Holiday Gold traders could be increasingly watching global politics as the US recently reinstated North Korea’s status as a sponsor of terror, sparking concerns that the tension could again flare up.
Pivot: 1284
Support: 1284 1279.5 1276
Resistance: 1297 1300.5 1303.5
Scenario 1: long positions above 1284.00 with targets at 1297.00 & 1300.50 in extension.
Scenario 2: below 1284.00 look for further downside with 1279.50 & 1276.00 as targets.
Comment: the RSI is supported by a bullish trend line.
Oil edged higher after the oil inventories according to the Energy Information Administration (EIA) reduced in the US by 1.9 million barrels in the previous week following also lower stockpiles announced by the American Petroleum Institute (API) on Tuesday.
The markets will be increasingly focusing on the OPEC meeting on November 30, where, according to a Bloomberg survey the majority of traders expect an extension of production cuts beyond March 2018. However it remains unclear how much Russia will be also committed to make such deal amid fears that higher prices will help US shale oil producers.
Pivot: 57.35
Support: 57.35 56.85 56.55
Resistance: 58.15 58.6 59
Scenario 1: long positions above 57.35 with targets at 58.15 & 58.60 in extension.
Scenario 2: below 57.35 look for further downside with 56.85 & 56.55 as targets.
Comment: the RSI is mixed to bullish.
US equity indices traded predominantly lower as monthly Durable Goods New Orders were 1.2 % lower than in the previous month (previous +2.2% / expected +0.4%). The FOMC minutes from the October meeting indicated that the central bank body is concerned about the buildup of financial imbalances. The FOMC members indicated differing approaches towards inflation and continued long term rate hikes, while markets assess the probability of a rate hike by the Federal Reserve in December at close to 100 percent.
Biggest losses were seen in bank and financial stocks (US Banks ETF -0.31% / US Financials ETF -0.42%) due to falling yields, while biotech (US Biotech ETF +0.60%) and energy (US Energy ETF (NYSE:XLE) +0.49%) stocks were the winners of the day.
While many indices continue trading with some restrictions on Thanksgiving (Thursday), US stocks and ETFs are not being traded on exchange due to the Holiday.
Pivot: 2589
Support: 2589 2579 2573
Resistance: 2605.5 2609 2613
Scenario 1: long positions above 2589.00 with targets at 2605.50 & 2609.00 in extension.
Scenario 2: below 2589.00 look for further downside with 2579.00 & 2573.00 as targets.
Comment: the RSI is mixed to bullish.