USD Declines as U.S. Existing-Home Sales Fall Unexpectedly

On Thursday, the U.S. dollar fell against a basket of major currencies, as pending home sales declined by 2.5% in November, the lowest level in a year. The U.S. dollar index fell as much as 0.6% and traded at 102.70 pips.

Gold prices rose as much as 1.5% and jumped to a two-week high yesterday, as U.S. treasury yields declined. The yellow metal traded at $1,155, but it is unlikely to hit the resistance of $1,160.

USD fell to ¥116.70 vs. JPY at the end of yesterday’s trading session, as U.S. 10-year yield unexpectedly declined. Technically, the pair could trade widely before the end of the year due to liquidation of contracts and financial positions.  

GBP rose slightly vs. USD notching up a 2-week high. However, Cable has lost 16% during the year, the worst since 2008. Technically, GBP and Euro are unlikely to trade in a wide range due to the Christmas holiday.

Also on Thursday, Oil prices settled below $54 after the U.S. crude inventories unexpectedly rose before executing the OPEC cut deal, which will effect entries next Sunday. Technically, crude could hit new highs by next year, but it could be negatively affected by a strong USD.

The most important economic events:

• USD Chicago Purchasing Manager (DEC): (GMT: 16:45) – Low – Forecast (57.8) – Previous (57.6).
• USD Baker Hughes U.S. Rig Count (DEC 30): (GMT: 16:45) – Medium – Forecast (N/A) – Previous (653).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.