The dollar was little changed at an eight month peak against the other major currencies on Thursday, as trading volumes remained thin with U.S. markets closed for the Thanksgiving holiday.
The greenback remained broadly supported after the string of upbeat U.S. data of Wednesday added to expectations that the Federal Reserve will raise interest rates next month.
On the other side, the ECB released a stability review on Wednesday that pointed to both the lack of eurozone growth and the impending rate hike were "of particular concern" to the eurozone's stability.
Analysts at Goldman Sachs (N:GS) believe the euro could be heading for parity with the dollar.
Today the U.K. is to release revised data on third quarter economic growth; in the euro zone, Spain is to release preliminary data on consumer inflation; while Canada is to round up the week with data on raw material price inflation.
The euro dropped below $1.06 on Thursday, following an exclusive report by Reuters that claimed the European Central Bank had been considering a variety of options before the next ECB meeting.
The ECB is expected to decide at the meeting whether to expand its current program of quantitative easing. The bank could also potentially cut interest rates further.
"They expect EUR/USD to go to 0.95 over the next 12-months but this level could be reached sooner," said an outlook from Goldman. "Until the ECB meeting they expect 1.05, and parity by year-end."
One of the options the ECB has been considering is a two-tier bank charge on those who seek to keep their money with the ECB. This would help alleviate major charges for commercial banks.
Analysts voiced their concerns about the eurozone's near-stagnation, and the need for action at the ECB meeting. On the other side of the pond, the Federal Reserve is expected to raise interest rates.
Pivot: 1.065Support: 1.0595 1.056 1.052Resistance: 1.065 1.068 1.071Scenario 1: Short positions below 1.065 with targets @ 1.0595 & 1.056 in extension.Scenario 2: Above 1.065 look for further upside with 1.068 & 1.071 as targets.Comment: The RSI lacks upward momentum.
Gold
Gold prices were little changed on Thursday, as trading conditions remained thin with markets in the U.S. closed for the Thanksgiving Day holiday.
But gold ticked a bit higher in Asia on Friday, as investors awaited further cues from the U.S.
Elsewhere in metals trading, copper dropped 0.14% to $2.087 a pound, after surging on Thursday, along with other base metals, as China regulators were said to consider a probe into metal short-selling in the local market. Prices received another boost amid reports that Chinese smelters are planning a meeting to consider taking action against falling prices.
Gold is down more than 6% so far in November, and Copper is down more than 10% so far this month, as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed on the metals.
Pivot: 1067Support: 1067 1063.5 1061Resistance: 1075 1077.6 1081.2Scenario 1: Long positions above 1067 with targets @ 1075 & 1077.6 in extension.Scenario 2: Below 1067 look for further downside with 1063.5 & 1061 as targets.Comment: Investors have to remain cautious since these levels may trigger profit taking.
WTI Oil
Crude oil prices declined in holiday-thinned trade on Thursday, amid uncertainty about how quickly the global glut of crude is set to shrink.
Saudi Arabia said earlier this week that it is prepared to use all measures necessary to ensure a stable oil market and that it is ready to cooperate with OPEC and non-OPEC producers in order to stabilize prices. Despite this declaration, on Wednesday, Saudi Aramco, the Kingdom’s largest oil producer, said it will not cut production in 2016, but will meet customer's demands.
On Wednesday, the U.S. Energy Information Administration said crude oil inventories rose by 961,000 barrels last week, below expectations for a gain of 1.2 million barrels. Meanwhile, the same day, industry research group Baker Hughes (N:BHI) said that the number of rigs drilling for oil in the U.S. declined by 9 to 555 last week. A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the future.
Pivot: 43.45 Support: 41.7 41.26 40.43 Resistance: 43.45 43.9 44.52 Scenario 1: Short positions below 43.45 with targets @ 41.7 & 41.26 in extension. Scenario 2: Above 43.45 look for further upside with 43.9 & 44.52 as targets. Comment: As long as 43.45 is resistance, likely decline to 41.7.