The U.S. Dollar managed to rebound on Tuesday despite weak economic data as the focus shifted to the upcoming FED rate decision. The retail sales monthly figures fell to 0.2% down from 0.5%, moreover, both industrial production and the capacity utilization rate came out below expectations while in Canada, inflation cooled down as the CPI declined to 0.1% compared to 0.4% registered previously. USDCAD retreated after reaching a high of 1.3243 following the release which keeps this pair under pressure in the short term, therefore, a continuation lower towards the 1.3100 daily support remains possible.
Daily Market Report
Looking at the latest stock market price action, all three major benchmarks extended their advance yesterday. The Dow added another 300 points closing 1.06% higher for the seventh consecutive day, in the meantime, the S&P500 rose 0.71% while the Nasdaq composite gained 0.76%. It is important to note that all those indices closed at their highest levels since April 2022. The Bullish momentum is set to continue boosted by strong earnings from major banking companies such as Bank of America and Morgan Stanley which reported better-than-expected financial results, seeing their stock prices advancing by more than 4% and 6% respectively.
On the other side, gold rallied on Tuesday after buyers succeeded to overtake last week’s highs and the yellow metal managed to reach the weekly resistance zone mentioned in our previous report located between the 1975 and 1983 levels. Therefore, we might see price stabilization in the near term due to potential profit-taking before seeing another advance. Gold trend has turned bullish now and if prices continue to hold above 1945 support, the upside pressure is likely to remain unchanged. A successful breakout above 1984 high should expose 1993 followed by the psychological barrier of $2000 per ounce. On the flip side, if the resistance holds, we might see a retest of the 1963-1954 support zone before finding new buyers.
Likewise, WTI crude traded in line with our expectations as prices managed to recover from yesterday’s sell-off bouncing from the 73.85 initial support. Technically, oil prices are following an uptrend in the near term which keeps the downside potential limited, therefore, a continuation higher in the coming hours towards the 76.00 resistance is likely. From a wider angle, prices are trading inside a wide range located between an important resistance at $83.00 and a key support located at $64.00 a barrel.
Finally, market participants will be waiting for the release of the recent inflation figures from the UK which are expected to decline from 0.7% to 0.4% on a monthly basis. Conversely, forecasts are pointing to an increase in the Eurozone consumer price index from 0.0% to 0.3%. In the U.S., building permits are due to rise from 1.496M to 1.500M, meanwhile, housing starts are expected to drop from 1.631M to 1.480M.