The Dow Jones plunged almost 600 points. The bearish sentiment was driven by the Federal Reserve’s December meeting minutes. The Fed officials expressed interest in hiking rates soon on account of the tightening in the US labor market.
"Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated," the FOMC meeting minutes said.
Technically, the overall momentum remains bearish after the early session sell-off. In the short term, if the bearish momentum continues the next downside levels to watch 36,200/00 then 35,900/650. On the upper side, the first immediate resistance is around 36,550 and then 36,700.
Stock markets just about everywhere sold off on Thursday morning session following the release of FOMC meeting minutes. The US stock futures slightly recovered on Thursday while the momentum is expected to be negative for a while as the FED revealed its plans to increase interest rates sooner than expected.
Crude oil futures rebounded from the early losses. On Wednesday, the oil prices settled lower following the release of weak EIA crude inventory data and equity market sell-off. The EIA data showed the weekly crude inventories declined by 2.1 million barrels.
In the currency market, the EURUSD attempted to bounce on Wednesday, but it failed to extend above the key resistance area 1.1345. At the time of writing, the currency pair trades below 1.1300. The US dollar index slightly rebounded from the previous session low of 95.90 to almost the session high of 96.35.
The safe-haven metal remains under pressure after the FOMC minutes indicating that the central bank is likely to raise interest rates sooner than predicted.
On the data front, US ADP employment data came stronger than expected. ADP private payroll numbers for December, some 807,000 jobs were added compared to estimates of a figure of 410,000.
Moving ahead today, the important events to watch:
US – Initial jobless claims: GMT – 13.30
US –ISM services PMI: GMT – 15.00
Worldwide, more than 295 million people have been confirmed infected and more than 5.44 million have died. The United States has confirmed over 57 million cases and has had more than 831,000 deaths from COVID-19, the highest totals in the world.
Technical Outlook and Review
EURUSD: The currency rebounded back to above 1.1300. However, Bulls will need to regain the 1.1345 level if they want to continue their ascent towards 1.1385.
The important levels to watch for today: Support- 1.1280 and 1.1260 Resistance- 1.1345 and 1.1390.
GOLD: For today, the first nearest support level is located at $1789. In case if it breaks below this level, it will head towards the next support level which is located at near $1784 then $1780. On the flip side, the immediate resistance at $1800 then $1810.
The important levels to watch for today: Support- 1789 and 1780 Resistance- 1800 and 1810.
Quote of the day - Good traders manage the downside; they don’t worry about the upside- Mark Minervini.
Read more- https://gulfbrokers.com/en/daily-market-report-428