US equities were mixed on Wednesday as Treasury yields rose. The Dow Jones index rose by more than 100 points while the S&P 500 was little changed. The tech-heavy Nasdaq 100 index declined by about 35 points. There was no major catalyst, meaning that investors are assessing the impact of the Covid-19 pandemic on the economy. This is after the US announced the sharpest increase in daily cases. Still, the market believes that the impact of the variant will be muted because it has milder symptoms.
The US dollar index declined after the US published the latest pending home sales and trade numbers. Data by the Commerce Department showed that the country’s goods trade deficit widened to more than $97.78 billion in November. That was a bigger increase than October’s increase of $83.20 billion and the median estimate of $89 billion. Additional data revealed that the country’s pending home sales declined sharply in November. Sales fell by about 2.2% after rising by 7.5% in the previous month. These numbers came a day after the Case-Shiller house price index declined for the third straight month.
The price of crude oil jumped sharply after positive oil inventories data. According to the Energy Information Administration (EIA), US oil stockpiles declined by more than 3.5 million barrels last week. This decline was bigger than the median estimate of 3.22 million barrels. Inventories have declined in the past few weeks because of the decision by the Biden administration to release millions of barrels from the Strategic Petroleum Reserves (SPR).
XTIUSD
The XTIUSD pair jumped sharply after positive inventories data. It rose to a high of 76.95, which was the highest level since November 25. The pair has managed to rise from a low of 62.30 in November. It has also passed the key resistance level at 76.71. Also, the pair has jumped above the 25-day and 50-day moving averages while the Bulls Power has continued rising. Therefore, the pair will likely keep rising as bulls target the key resistance at 80.
EURUSD
The EURUSD pair made a bullish breakout as investors reacted to weak US housing data. It rose to a high of 1.1370, which was the highest level since November 30th. It also managed to cross the key resistance level at 1.1340, which was the upper side of the horizontal channel. It also rose above the 25-day moving average. Therefore, there is a possibility that the pair will continue holding steady today.
USDCHF
The USDCHF pair crashed to the lowest level in months after the latest housing data. The pair moved to a low of 0.9130, which was lower than this month’s high of 0.9295. It has moved along the lower side of the Bollinger Bands while the Stochastic oscillator has tilted lower. It has also moved below the 25-day and 50-day moving averages. Therefore, the pair will likely keep falling today.
