Currencies
EUR/USD – is moving up after having found some sort of support at the lower 1.13 levels. Tomorrow will be a very important day, with inflation data out of the Eurozone and the FOMC meeting minutes. The nearest resistance can once again be found around the 1.1375 level.
USD/JPY – is moving up and is trading at the resistance again which proved to be too much last week as well as the 61.8 Fibonacci level. Even though the industrial production came in better than expected it wasn’t enough to strengthen the JPY. This is likely due to the fact that we have the GDP data tomorrow.
GBP/USD – with the Dollar Index unable to break through the resistance, we see the USD weakening, and we can see this especially here, and we are trading above the 1.44 level again. This also comes due to weaker data out of the US yesterday. Today we have a lot of data both out of the UK and the US, so more action is to be expected.
AUD/USD – has weakened severely after the bad data and the rate cut, as there was also an increased expectation that the RBA would cut the interest rate further soon. However, from the RBA meeting minutes it seems that the RBA will wait to see before cutting the interest rate again. Especially since the minutes showed that even the last interest rate cut was a very close call.
Indices
Dollar Index – is moving down after being unable to breach the resistance at the 94.570 level. The weaker than expected NY State Manufacturing Index also wasn’t helpful, and so we are heading down at the moment. As mentioned yesterday, there is enough data this week to cause large moves in the USD, especially the FOMC meeting minutes tomorrow.
S&P 500 – continues to move higher, as oil prices are also moving up, boosting the energy sector and also sentiment. However, we are nearing the downwards trend line, so we will need to see that we will be able to breach that as well to get another bullish signal.
Commodities
Gold – wasn’t able to sustain itself above the resistance around the 1276 level and moved down below it again. This comes even as the USD weakened during the day, but the rise in the equity market caused an outflow from gold towards the equity markets and oil. However, we are still trading in close proximity of the resistance, so we could very well see another attempt today, especially as the USD continues to weaken. Technically we are able to see an upwards trend line.
Oil – continues to soar higher and is approaching the resistance around the 49.40 level and after that the psychological 50 level. The continued move higher comes as there are still supply issues. Nigeria’s oil production is reportedly at a 20 year low amid attacks against its oil infrastructure, and Canada still hasn’t recovered from the wildfire, which are still raging. In total it is expected that the different disruptions are cutting the supply by well over 3mbpd. On the other hand, Libya’s oil production is expected to increase again after an agreement has been reached between the various parties. As mentioned before, the question is when US production will come back online again and increase, as it is the lower oil price which caused the production to go down, something that might change now that prices have significantly recovered.
Stocks
Apple (NASDAQ:AAPL) – is very much in the news the last few days. Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) has bought over $1 billion worth of Apple stock in the first quarter of 2016. As a result Apple rose 3.7% in trading yesterday, moving away from its lowest level in 2 years.
by Shawn Koopman