The dollar remains stronger against other major currencies on Thursday, supported by comments from the U.S. Federal Reserve chairman, which boosted expectations about the central bank's possible interest rate hikes later this year.
In a testimony on Tuesday and Wednesday, Fed Chairman Jerome Powell said he believed the United States was on course to a steady growth, and carefully downgraded the risks of an escalating trade conflict.
Oil prices trade lower on Thursday after the Energy Information Administration (EIA) published a report showing an unexpected rise in U.S. crude stockpiles due to a surge in imports.
Cryptocurrencies continued to rally on Wednesday, with the Bitcoin recording its biggest three-day gain this year, climbing above the $7,500 level earlier this week, however, it is still more than 60% lower than its all-time high posted in December.
For Thursday, the UK will be releasing its data on retail sales while later in the day, the U.S. is to publish reports on jobless claims and manufacturing activity in the Philadelphia region. Market focus is shifted towards the finance ministers and central bankers from the Group of 20 leading economies that are due to meet in Buenos Aires Saturday and Sunday, where they could respond to concerns on US trade policies.
The EUR/USD remains lower on Wednesday, trading close to the 1.16 level as the Federal Reserve chairman Jerome Powell was delivering his Congressional testimony for the second day on Wednesday.
The speech failed to support the US Dollar as much as on Day 1 of his testimony while some pressure came from soft U.S. economic data showing subdued housing market activity. Housing starts dropped to a nine-month low as rising mortgage rates and costs for labor and materials weighed on the housing market.
Today, U.S. is to publish reports on jobless claims and manufacturing activity in the Philadelphia region while investors are mostly focusing on the G 20 meeting in Buenos Aires Saturday and Sunday, where talks will be held on global trade matters.
Pivot:1.1665Support:1.16151.161.1575Resistance:1.16651.16851.1705Scenario 1:short positions below 1.1665 with targets at 1.1615 & 1.1600 in extension.Scenario 2:above 1.1665 look for further upside with 1.1685 & 1.1705 as targets.Comment:the RSI shows downside momentum.
Gold
Gold prices posted new one year lows on Wednesday as the Chairman of the Federal Reserve Jerome Powell supported further interest rate hikes over a considerably stronger economic growth in his testimony before the Banking Committee of the US Senate on Tuesday.
Recent strength in the dollar which remained near a three-week high continues to add pressure on the precious metal prices.
Employment and manufacturing data from the US will be in the spotlight for today, while on the trade front, White House economic advisor Larry Kudlow said trade talks with China have paused for now, although discussions with the European Union have been more promising, and a significant trade offer is expected from the European Union soon.
Pivot:1221.5Support:1221.512171214Resistance:12291234.51237.5Scenario 1:long positions above 1221.50 with targets at 1229.00 & 1234.50 in extension.Scenario 2:below 1221.50 look for further downside with 1217.00 & 1214.00 as targets.Comment:the next resistances are at 1229.00 and then at 1234.50.
WTI Oil
Oil prices fluctuated between gains and losses Wednesday after the EIA Inventories report showed an increase by 5.836 million barrels for the week ended July 13, compared to expectations for a drop of 3.622 million barrels.
The unexpected increase in crude supplies came as imports rose by 1.635 million barrels a day (bpd) and output rose to a record 11 million bpd, the EIA said.
Crude prices were also supported by supply disruptions in the Middle East as rebels in Yemen attacked an oil facility in Saudi Arabia, Reuters reported.
Oil traders are now turning their attention to the Baker Hughes weekly data on the U.S. oil rig count.
Pivot:68.45Support:67.0566.465.85Resistance:68.4869.2569.95Scenario 1:long at 68.76 with targets at 69.25 & 69.95 in extension.Scenario 2:below 67.95 look for further downside with 67.05 & 66.40 as targets.Comment:the RSI is mixed to bullish.
US 500
The main US indices closed higher on Wednesday, supported by sharp gains in industrials and financials as investors welcomed solid earnings.
The Dow Jones Industrial Average gained approximately 0.32%, the S&P 500 gained almost 0.22%, and the Nasdaq Composite fell about 0.01%.
Morgan Stanley (NYSE:MS) stock rallied by more than 2%, boosting the banking sector, after earnings and revenue that exceeded expectations after some strong trading and investment activity.
Financials were also lifted by a sharp rise in Berkshire Hathaway B (NYSE:BRKb) stock raising expectations that the company would aggressively buy back shares after it reports second-quarter earnings on Aug. 3.
Upbeat earnings from U.S. corporates overshadowed renewed threats from China warning that it was preparing new countermeasures against U.S. tariffs.
Pivot: 2809 Support: 2809 2803 2800 Resistance: 2823 2826 2833 Scenario 1: long positions above 2809.00 with targets at 2823.00 & 2826.50 in extension. Scenario 2: below 2809.00 look for further downside with 2803.00 & 2800.00 as targets. Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited. The downside potential should be limited by the key support at 2809.