Summary:
- Failure in Trump’s healthcare bill ignited volatility to stocks, with Dow Jones dropping sharply while Nasdaq reaching a new height for the year.
- Dollar Index rebounded on its 1 hour chart, however, it may be only temporary recovery from technical perspective.
- Recent rises in European currencies were hindered by bad economic reports from both U.K. and euro region Tuesday, watching potential resumption of uptrend in the short term.
Trump’s healthcare bill failed again Tuesday, 18, July as Trump’s desired plan to repeal Obamacare first and without definite alternative was not supported by senators. Dollar Index reached a new low for 2017, however, it managed to regain some ground in New York session thanks in part to the sterling turning lower due to U.K. inflation slowdown for June and decrease in ZEW economic sentiment both from Germany and euro area for July as well. Keep an eye on Dollar Index and watch if its rebound meet resistance or not today.
Technical
Dollar Index (DXY) managed to recover from losses and which was determined as a rebound from its 1 hour timeframe. The price action in greenback has not reached its long term moving averages yet. Its short term moving averages converged, watching if they turned divergent, below its long term moving averages which remained in the state of diverging with bearish bias. Keep an eye on greenback changes in distance between its short term moving averages and long term moving averages, watching upside resistance around EMA30-EMA40.
Non-U.S. currencies
Euro fell back slightly after shooting up to 1.15817 high, with a potential support at H1-period EMA30. The sterling dived in London session due to bad inflation reports and found itself stabilized at H4-period EMA30 support, potentially retested this level in the short term. The commodity currency Aussie whipsawed at relatively high level Tuesday after rose sharply in the past days. Watch if its overall uptrend flattened or not.
Precious metals
Gold moved further up to 1244.33 high yesterday before a slight short-term retracement. Its short term moving averages tended to converge while kept a safe distance above its long term moving averages which remained in the state of diverging with bullish bias steadily, indicating that its on-going uptrend has not faced obvious challenges yet and watching upside resistance at daily EMA60, follow by EMA169 closely. Meanwhile, if gold could resume its uptrend after a retracement and consolidation in the short term remains to be seen.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.