The US Dollar traded stronger against other major currencies, with the US Dollar Index (USDX) closing 0.43% higher on Tuesday. The Chinese Yuan Offshore (CNH) continued to decline against the Dollar for the ninth consecutive day as trade tensions between the US and China appear to be escalating.
Gold was also under continued pressure, reaching a new year-to-date low. Oil traded significantly higher on the announcement from the United States, that it would sanction imports of oil from Iran beginning November this year.
Equity indices in the US traded only moderately higher on Tuesday over continued trade concerns, with other global indices also at best seeing limited upside movement.
Cryptocurrencies were again under pressure with the Bitcoin holding on to the $6,000 level, while other major cryptocurrencies such as Ethereum and Litecoin continued to fall, losing nearly 20 percent over the course of one week.
On Wednesday in Italy the ISAE Consumer Confidence level and Producer Price Index (PPI) are due to be released. In US data about the mortgage market, Durable Goods New Orders and Pending Home Sales Index will be published. In the Asian-Pacific trading session on Thursday the Reserve Bank of New Zealand is scheduled to announce its interest rate decision.
The EUR/USD traded lower on Tuesday after the currency pair climbed for the previous 3 consecutive trading days. Bulgaria meanwhile announced to delay its plans to apply for the adoption of the Euro as national currency, putting the blame on constantly changing demands from the EU and the ECB.
On Wednesday in Italy data on its non-EU trade balance and the PPI is set to be released, while France publishes its Jobseekers numbers. Later the FOMC member Rosengren is scheduled to make a speech.
On Thursday key data is expected with the European Commission’s Economic Sentiment and Industrial/Consumer Confidence statistics being released. Germany and Italy are set to publish their inflation data on Thursday, followed by inflation figures from France and the EU on Friday.
Pivot:1.1685Support:1.1631.161.157Resistance:1.16851.1721.1755Scenario 1:short positions below 1.1685 with targets at 1.1630 & 1.1600 in extension.Scenario 2:above 1.1685 look for further upside with 1.1720 & 1.1755 as targets.Comment:as long as the resistance at 1.1685 is not surpassed, the risk of the break below 1.1630 remains high.
Hong Kong 50
Hong Kong and Chinese equity indices faced another day of losses as the Hang Seng trades at a 6 months low and the Chinese A50 index losing more than 8.5% since the start of last week. A senior political advisor in China, according to Caixin, warned that trade frictions with the US and slowing domestic demand should be factors for the Chinese leadership to consider, “preparing for the worst”.
The Chinese smartphone maker Xiaomi, which is about to go public in Hong Kong, with the expectations of raising more than 6 billion US Dollars, was only moderately oversubscribed on the first day of the public offer compared to higher oversubscription numbers recorder for other IPOs in Hong Kong.
On Saturday in China data on the Non-Manufacturing and Manufacturing PMI is set to be released. The influential Caixin manufacturing PMI will be released on Monday next week.
Pivot:29255Support:286752843028170Resistance:292552953529870Scenario 1:short positions below 29255.00 with targets at 28675.00 & 28430.00 in extension.Scenario 2:above 29255.00 look for further upside with 29535.00 & 29870.00 as targets.Comment:the RSI is mixed to bearish.
WTI Oil
Oil edged up sharply on Tuesday following the announcement by the United States, that from November this year companies and its trading partners are expected to stop importing oil from Iran. Companies and countries that would not follow suit would have to expect to face US sanctions, according to officials. While restrictions were expected, it was widely assumed that more time would be given to scale down those oil imports.
The American Petroleum Institute (API) released data indicating a weekly draw of 9.2 million barrels of oil over the past week, which was a significantly higher draw than expected and the highest weekly reduction in stockpiles in more than 6 months.
On Wednesday the Energy Information Administration (EIA) is set to release its oil, gasoline and distillate statistics.
Pivot:69.4Support:69.468.2567.15Resistance:71.4572.173Scenario 1:long positions above 69.40 with targets at 71.45 & 72.10 in extension.Scenario 2:below 69.40 look for further downside with 68.25 & 67.15 as targets.Comment:the RSI advocates for further upside. The prices are is striking against the upper Bollinger band.
US 500
US equity indices settled modestly higher on Tuesday, with continued concerns about global trade and mixed economic data not allowing for a significant recovery.
Consumer Confidence was reported at a level of 126.4 (expected 128.1) and the S&P/Case-Shiller House Price Index 10-City at 6.6% m/m was also below expectations of 6.8%.
The biggest gains of the day were seen in energy companies' stocks (US Energy ETF (NYSE:XLE) +1.33%), following the uptick in oil prices. General Electric (NYSE:GE) (+7.76%) had its best trading day in years, as the struggling company announced to spin off its oil service firm Baker Hughes and its health care business.
On Wednesday the focus for US data will be on the Durable Goods New Orders and Pending Home Sales Index announcements. On Thursday Real Gross Domestic Product (GDP) statistics are due and the sports gear company Nike (NYSE:NKE) will publish its quarterly earnings.
Pivot: 2714.5 Support: 2714.5 2703 2691.5 Resistance: 2739 2748 2757 Scenario 1: long positions above 2714.50 with targets at 2739.00 & 2748.00 in extension. Scenario 2: below 2714.50 look for further downside with 2703.00 & 2691.50 as targets. Comment: the RSI lacks downward momentum.