Solid durable goods report empowers USD bulls

Sentiment towards the US economy received an uplift following an impressive decline in jobless claims which pointed to a recovery in economic momentum in the United States. This was complimented bythe core durable goods results which hit expectations at 0.5%,giving more reasons for the Fed to raise US interest rates in December. It must be remembered that the Fed members placed a strong emphasis on the strength of US data as a condition to raise US interest rates, and that following the spectacular employment report for October, the recent string of positive economic data hasreinforced growing speculation around the likelihood of US interest rates being raised before the end of 2015.

Dollar Index breaches 100 resistance

The rising optimism over the increased likelihood of a US rate rise in December has translated to the Dollar Index smashing through the psychological 100 resistance in Tuesday’s trading session. Sentiment towards the Dollar has become sanguine and this may encourage bullish investors to propel the Dollar Index higher. What was seen as a potential psychological top at 100 may transform into a dynamic support which may assist buyers to send prices towards the next relevant level at 102.

Technically the Dollar Index has found support above the 20, 50 and 200 SMA. There have been consistent higher highs and higher lows with the MACD crossing to the upside. A daily close above 100 may invite an opportunity for a further incline higher.

WTI oil is on route to relinquishing Tuesday’s gains as expectations diminish around the possibility of a supply cut in the scheduled OPEC meeting for December. Saudi Arabia’s announcement that it was ready to cooperate to achieve market stability created a relief rally which encouraged bearish investors to harass WTI further. The reoccurring theme of an aggressive oversupply in the markets and faltering global demand for WTI will continue to depress prices, presenting an opportunity for a further decline towards $39.

This hard commodity is technically bearish and resistance at $43.30 may act as a potential lower high which should encourage sellers to send price back towards $39. Technical indicators such as the 20 SMA and MACD which also point to the downside, marry this bearish view on WTI oil.

Currency Spotlight – EURUSD

The growing divergence in both monetary policy and economic sentiment between the United States and Europe has encouraged bearish investors to send the EURUSD to fresh seven month lows of 1.058. This pair is heavily bearish and the escalating expectations around the ECB easing monetary policy further has fuelled the downwards momentum. Dollar appreciation has also attributed to the factors which have consistently threatened bullish investors, resulting in a heavily depressed EURUSD.

Technically the pair is bearish on the daily timeframe as there have been consistent lower highs and lower lows. The bearish engulfment on Friday provided a foundation for prices to decline towards the 1.0500 support.

EURCAD

The EURCAD is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. The next relevant support on this pair is based at 1.4000.

EURNZD

The EURNZD is technically bearish on the daily timeframe. A breakdown below the 1.6150 support may open a path to the next relevant support at 1.5700. Technical indicators such as the daily 20 SMA and MACD also point to the downside.

SILVER

This precious metal is has declined for almost threeconsecutive weeks and remains technically bearish on the daily timeframe. The candle sticks are below the daily 20 SMA and the MACD also trades to the downside. A breakdown below the 14.00 support may invite a steep decline towards 12.50.