iFOREX Daily Analysis : August 26, 2016

The dollar showed little movement against most major currencies on Thursday, after the release of positive U.S. data, as investors remain cautious ahead of Yellen’s highly-awaited speech on Friday.

The Commerce Department said durable goods orders rose by 4.4% last month, compared to expectations for an advance of 3.3%. At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 20 decreased by 1,000 to a five-week low of 261,000 when analysts expected a rise by 3,000 to 265,000 last week. The annual economic symposium is in the spotlight with Fed Chair Janet Yellen's opening remarks on Friday at 10 a.m. EST. Besides Yellen, three other central bank officials will be speaking at the conference. Bank of Mexico Governor Agustin Carstens, ECB Executive Board Member Benoit Coeure and Bank of Japan Governor Kauhiko Kuroda will participate in a panel discussion Saturday at 12:25 p.m. ET to close the conference. For today, The U.K. is to release revised data on second quarter economic growth and the U.S. is also to produce revised data on second quarter growth, as well as a second look at consumer sentiment from the University of Michigan.

EUR/USD

The euro gained against the dollar on Thursday, despite U.S. data overnight reinforcing the recent positive assessments of the U.S. economy. New orders for U.S. manufactured capital goods rose for a second straight month in July as demand for machinery and a range of other products picked up, while the number of Americans filing for unemployment benefits unexpectedly dropped. After the release of the U.S. data, markets were indicating a 24 percent chance the Fed will hike rates at its policy meeting next month and a roughly 57 percent chance of an increase in December, according to the CME Group's (NASDAQ:CME) FedWatch. For today, the U.S. is to produce revised data on second quarter growth, as well as a second look at consumer sentiment. However, investors’ attention is mainly shifted towards the Jackson Hole symposium and Yellen’s upcoming speech for possible indications on any possible future rate hikes.

Pivot: 1.1255Support: 1.1255 1.124 1.1225Resistance: 1.1325 1.135 1.1365Scenario 1: long positions above 1.1255 with targets @ 1.1325 & 1.1350 in extension.Scenario 2: below 1.1255 look for further downside with 1.1240 & 1.1225 as targets.Comment: the RSI shows upside momentum.

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Gold

Gold prices fell to fresh four-week lows on Thursday, after solid U.S. economic reports on durable goods orders and jobless claims increased the chances of an interest rate increase in coming months. Meanwhile, investors stayed cautious ahead of Fed Chair Janet Yellen's speech which will be followed by several other significant bank officials including Mexico Governor Agustin Carstens, ECB Executive Board Member Benoit Coeure and Bank of Japan Governor Kauhiko Kuroda. For today, the U.S. will also be announcing revised data on second quarter growth, as well as consumer sentiment data. However, investors’ attention is mainly shifted towards the Jackson Hole symposium and Yellen’s upcoming speech for possible indications on any possible future rate hikes.

Pivot: 1331.5Support: 1315.5 1310 1304.75Resistance: 1331.5 1340 1345Scenario 1: short positions below 1331.50 with targets @ 1315.50 & 1310.00 in extension.Scenario 2: above 1331.50 look for further upside with 1340.00 & 1345.00 as targets.Comment: the upward potential is likely to be limited by the resistance at 1331.50.

WTI Oil

Oil prices rose nearly 1 percent on Thursday on expectations the dollar would weaken after Friday's key speech by U.S. Federal Reserve Chair Janet Yellen, making dollar-denominated commodities more attractive to holders of other currencies. Crude oil prices rebounded from a selloff in the previous session on support from players buying on market lows and looking for a bottom on speculation that next month's informal meeting between the Organization of the Petroleum Exporting Countries and other major producers could result in output curbs. Market focus is evolving around the Jackson Hole meeting for any possible indications that could affect the dollar while energy traders will also be watching data from Baker Hughes on oil rigs count.

Pivot: 47.7Support: 46.43 45.81 45Resistance: 47.7 48.34 49.35Scenario 1: short positions below 47.70 with targets @ 46.43 & 45.81 in extension.Scenario 2: above 47.70 look for further upside with 48.34 & 49.35 as targets.Comment: the upward potential is likely to be limited by the resistance at 47.70.

US 500

The main U.S. indices posted losses on Thursday, remaining close to all-time record-highs as investors remain cautious ahead of the highly-awaited Yellen speech in the Jackson Hole symposium and the possibility of a near-term interest rate hike and as gains in the Healthcare, Consumer Services and Oil & Gas sectors drove the market lower. Shares in Cisco Systems Inc (NASDAQ:CSCO) rose to 5-year highs and Shares in Procter & Gamble Company (NYSE:PG) rose to 52-week highs, however, the worst performer which was were Dollar General Corporation (NYSE:DG) which was down 17.77%. Besides key speeches from key central bankers today and tomorrow, investors will also be watching closely revised data for second quarter growth, as well as a second look at consumer sentiment from the University of Michigan.

Pivot: 2120 Support: 2120 2042 1992 Resistance: 2220 2250 2350 Scenario 1: long positions above 2120.00 with targets @ 2220.00 & 2250.00 in extension. Scenario 2: below 2120.00 look for further downside with 2042.00 & 1992.00 as targets. Comment: investors have to remain cautious since these levels may trigger profit taking.

Written By: iFOREX