iFOREX Daily Analysis : December 23, 2016
iFOREX | Dec 23, 2016 04:59AM ET
The dollar posted little change against the other major currencies on Thursday, still hovering close to 14-year highs amid optimism regarding the strength of the U.S. economy and as trading volumes are expected to remain low ahead of the Christmas holiday. The U.S. Commerce Department said on Thursday that gross domestic product grew at an annual rate of 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%.
The report showed personal consumption rose 3.0% in the third quarter, up from an initial estimate of 2.7%. Consumer spending typically accounts for nearly 70% of U.S. economic growth. The government said new orders for U.S. capital goods rose more than forecast in November, however, jobless claims rose to their highest since June.The dollar has been broadly supported since the Federal Reserve concluded its policy meeting last week by raising interest rates by 25 basis points and hinted that three more rate hikes could take place for 2017.
The euro rose slightly by 0.08% to 1.0443 and the sterling held steady against the dollar at 1.2287 while the USD/JPY edged down 0.14% to trade at 117.38. Market participants are now looking ahead to U.S. reports on new home sales and consumer sentiment for further indications on the strength of the economy.
EUR/USD
The EUR/USD was up 0.51% at 1.0480, recovering from Tuesday’s fresh 14-year low of 1.0349, despite the fact that U.S. gross domestic product grew at an annual rate of 3.5% in the three months ending September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%. The dollar received pressure by weaker than expected data on personal spending and durable goods orders.
Meanwhile, the U.S. Labor Department said initial jobless claims rose by 21,000 to 275,000 last week, compared to expectations for a rise of only 2,000. Market participants are now looking ahead to U.S. reports on new home sales and consumer sentiment for further indications on the strength of the economy.
Pivot:1.043
Support:1.0431.04151.04
Resistance:1.0461.0471.048
Scenario 1:long positions above 1.0430 with targets at 1.0460 & 1.0470 in extension.
Scenario 2:below 1.0430 look for further downside with 1.0415 & 1.0400 as targets.
Comment:the RSI is mixed to bullish.
Get The News You Want
Gold
Gold prices fell towards last week's 11-month lows on Thursday, after data showed that the U.S. economy grew faster than initially estimated in the third quarter, posting its best performance in two years. Gold has been fluctuating within a tight range between $1142 and $1125 per ounce in the last week with buying sentiment appearing weak despite recent geopolitical turmoil.
Market analysts warned that the outlook for gold remains cloudy in the near-term, given expectations for higher U.S. interest rates in the months ahead. Market participants are now looking ahead to U.S. reports on new home sales and consumer sentiment for further indications on the strength of the economy.
Pivot:1129
Support:11291127.51125.5
Resistance:113411351137
Scenario 1:long positions above 1129.00 with targets at 1134.00 & 1135.50 in extension.
Scenario 2:below 1129.00 look for further downside with 1127.50 & 1125.50 as targets.
Comment:the RSI is supported by a rising trend line.
WTI Oil
Oil prices rose in quiet trading on Thursday, supported by strong U.S. economic data, a pause in the U.S. dollar rally and optimism that crude producers would abide by an agreement to limit output. A weaker dollar makes dollar-denominated commodities including oil cheaper for holders of other currencies.
Thursday's gains were curbed by an unexpected rise in U.S. crude inventories last week and moves by Libya to boost output over the next few months.
Elsewhere, Talal Nasser Al Athbi, head of the Organization of Arab Petroleum Exporting Countries' Executive Bureau said on Thursday that supply and demand in global oil markets should rebalance during the first or second quarter of next year.
A report by Baker Hughes on U.S. active oil rigs will be in focus for this week for further indications on U.S crude oil supply.
Pivot:52.54
Support:52.5452.3252.08
Resistance:53.253.453.8
Scenario 1:long positions above 52.54 with targets at 53.20 & 53.40 in extension.
Scenario 2:below 52.54 look for further downside with 52.32 & 52.08 as targets.
Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
US 500
The main U.S. indices fell on Thursday, with losses in the Consumer Services, Basic Materials and Technology sectors led shares lower. At the close in NYSE, the Dow Jones Industrial Average declined 0.19%, while the S&P 500 index declined 0.36%, and the NASDAQ Composite index fell 0.61%. Some of the best performing stocks in yesterday’s session were Chevron Corporation (NYSE:CVX) which added 0.53% and Exxon Mobil Corporation (NYSE:XOM) which was up 0.40%.
The worst performers of the session were Wal-Mart Stores Inc (NYSE:WMT) which fell 2.65, Home Depot Inc (NYSE:HD) which declined 1.07% and Apple Inc (NASDAQ:AAPL) which was down 1.03%. Some investors worry that the so-called Trump rally has made stocks expensive and are concerned that legislators may resist strong tax cuts and other policies that could widen the federal deficit.
So far in 2016, the S&P 500 has risen 11 percent, topping the 8 percent gain for the year that strategists predicted on average in a Reuters poll 12 months ago. For today, market focus will be shifted towards new home sales and consumer sentiment for further indications on the strength of the economy.
Pivot: 2261
Support: 2255 2252 2250
Resistance: 2261 2265 2269
Scenario 1: short positions below 2261.00 with targets at 2255.00 & 2252.00 in extension.
Scenario 2: above 2261.00 look for further upside with 2265.00 & 2269.00 as targets.
Comment: the RSI is mixed with a bearish bias.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.