It appears that there is divergence between the actual economic performance reflected in the U.S. economy and the sentiment about the U.S. economy. The hard data reflected by the U.S. retail sales and inflation last week, shows as softer than expected tone. This contrast to record sentiment data reported by confidence data released last week. While GDP showed a sluggish Q1, stock prices are also reflecting robust sentiment, which is not matched by hard data. The burden of proof is left on the data, and the Fed will likely move forward with further normalization unless the data continues to disappoint.
The USD/JPY[i] hit a fresh 5-month low at 108.13, but rebounded, despite a stronger than expected Chinese GDP report. The dollar has been under pressure as geopolitics continue to erode market sentiment. Support is seen near the November lows at 102.50, while resistance is seen near the 10-day moving average at 109.84. The exchange rate is oversold as the RSI (relative strength index) is printing a reading of 29, below the oversold trigger level of 30 and could foreshadow a correction.
Gold
Gold prices[i] hit a fresh 5-month high at 1,295, before reversing course and moving lower during the North American trading session. With Europe closed for Easter, volume of trading of the yellow metal remains subdued. Resistance is seen near the November 8 highs at 1,337, while support is seen near the 10-day moving average at 1,269. Prices remain overbought as the RSI (relative strength index) is printing a reading of 73, which is above the overbought trigger level of 70 and could foreshadow a correction.
US 500
The S&P 500[i] index declined on Thursday as the market were closed for Good Friday at the tail end of last week. Futures are pointing to a higher open on Monday. Prices edged through support which is seen as resistance near the 50-day moving average at 2,351, with support seen near the March lows at 2,322. Momentum is negative as the MACD (moving average convergence divergence) index is printing in the red with a downward sloping trajectory which points to lower prices.
McDonald's (NYSE:MCD)
McDonalds shares were lower on Thursday but the stock price is higher in the pre-market following an upgrade of the shares. The trend remains positive, with support seen near the 50-day moving average at 127.71. Resistance is seen near the all-time highs at 131.58. The RSI (relative strength index) is moving lower from oversold territory which is generally seen as a bearish signal.
