Euro and USD

The single currency dropped versus the US dollar as the latter was bolstered by data which showed that sentiments of American consumers surprisingly improved in October.

The EUR/USD pair went down 0.38% to 1.2759 during late trading last week. This was not a long way from lows of 1.2745.

The pair will probably get support at approximately 1.2625. Resistance is seen at 1.2843.

The University of Michigan’s index for consumer outlook increased to 86.4 this month which is the highest since July of 2007.

A separate report pointed out that housing starts went up more than expectations in September.

Data boosted anticipation that the central bank will really increase interest rates during the second semester of 2015.

However, the US currency declined against other major currencies which led to a three-week slump against the common currency.

Germany is looking at a possible of 1.2% for 2014 although this was down from the previous 1.8 percent and a growth rate of 1.3 percent next year.

The ECB has already brought down interest rates to exceptional lows and offered four-year loans to commercial banks.

The euro scaled higher against the Japanese yen. EUR/JPY eased 0.15% to 136.38 in late trading last week.

Gold Recommendation

GOLDThe strong showing of the US data provided strength to the greenback and pushed the gold further downward despite the zone of key resistance at $1,240 and $1,250 levels. During the past days, the metal was supported by the concerns of IMF that slowed down the German economy and the relaxation of bets on the interest of Fed rate hike.

In the early term, gold is still holding tightly to the triple bottom that was near $1,180 levels. In the session of yesterday, gold is able to reach a high of the rate $1,244.80 despite presence of strong resistance found in 50Dsma at a rate of $1,252. Today the precious metal has support reaching $1,236.60 levels.

In case, the yellow metal culminates above the rate of $1,252 per day, then it can only rally up to the $1,264; then to $1,274; then to $1,278; and then to $1,285 levels. The term of short and medium still appears looks bearish. Alternating on the down side, in case the precious metal breaks beneath $1,238, it supported at $1,235; then $1,232; and finally $1,217 levels. In the daily chart,
stochastics indicates time for selling.

 

US Stocks Pull Through

US stocks recovered and reduced the weakening this week. Earnings were higher than projections while consumer confidence attained a seven-year peak.

Meanwhile, investors believed central banks will put in additional stimulus.

Schlumberger, the biggest provider of oilfield services, vaulted 3.7 percent after indicating revenue and announcing that falling crude prices will not have any significant impact on businesses.

Morgan Stanley had 2.1 percent as third-quarter revenues nearly doubled.

Standard & Poor’s Index increased 1.3 percent to 1,886.76 at the NYSE and trimmed the previous recovery of 1.9 percent. The gauge dropped one percent this week. It was the fourth week of losses and the longest collapse since 2011.

Dow Jones increased 263.17 points. This was 1.6 percent or 16,380.41 and the first gain in one week. NASDAQ Composite Index went up by one percent.

The ECB will begin to acquire assets under its new program as support for the economy.

Consumer confidence rose this month to the greatest level during the last seven years. Energy prices dropped while the labour market gained. Thomson Reuters and the University of Michigan initial sentiment index for October stepped up at 86.4 which is the most formidable since July of 2007.

US Versus Euro and Yen

usd vs euro and yenThe US currency was up against the Japanese yen and the single currency after potent US economic data supported the perception that the selloff of the dollar was exaggerated.

Figures from the US Labor Department indicated that the number of citizens seeking new claims for unemployment benefits dropped to the lowest in the last 14 years. Meanwhile, a report from the central bank indicated production in factories and mines and utilities moved higher than expected at 1.0 percent in September.

Economic observers believe that the economic viewpoint has not changed significantly.

An auction of debt and data in Spain underscored deflation hitting five unimportant euro zone countries last month.

Consumer inflation at the 0.3 percent rate did not change based on Euro Stat estimates last September 30.

Italy, Spain, Greece, Slovakia, and Slovenia and Spain showed indications of depreciation in September due to recurring low household demand.

The dollar gained moved forward after reaching a three-week slump against the common currency, the Swiss Franc and Japanese yen.

The dollar reduced gains following comments made by US Federal Reserve in St. Louis President James Bullard that the central bank may retain bond-buying longer than expected with the decreases of inflation expectations.

These remarks increased the UK sterling’s rise versus the dollar. It enhanced the outlook that the Bank of England can strengthen monetary policy before the Federal Reserve does.

The euro was down 0.23 percent versus the dollar at $1.2807 after it reached $1.2885. The euro was down against the Japanese yen.