The Dollar gained on Monday for the fifth consecutive trading day against other major currencies, with the US Dollar Index (USDX) closing 0.67% higher. Meanwhile the South African Rand (ZAR) fell against the Dollar to a 3-months low, which is in line with the move of other currencies against the strong Dollar, like the Russian Ruble (RUB) or the New Zealand Dollar (NZD). This move is being blamed on the rising yields of US Treasury Notes.
On Monday 10 Year US Treasury Notes were traded at a yield above 3% for the first time in over 4 years. The high yields of the US Treasuries put gold further under pressure as investors have more incentive to use Treasuries as safe haven asset, compared gold, which does not yield any interest.
Equities in the US showed mixed results on Monday, while the major indices traded lower. The rising interest rates and trade conflict with China are seen by many as a risk.
Cryptocurrencies were overall showing significant gains with major tokens such as Bitcoin and Ethereum reaching their highest levels since the beginning of March and Bitcoin Cash gaining almost 100% compared to its value last week. It was reported that the investment bank Goldman Sachs (NYSE:GS) started adding personnel to its ‘digital asset markets’ division.
On Germany and France publish indicators on the business climate/expectations in their countries, while in the United Kingdom the results of the CBI Industrial Trends Survey will be released. In The US surveys on investor and consumer confidence and multiple housing market statistics are set for publication.
EUR/USD
The EUR/USD declined again on Monday, now to a new 7-weeks low. This is to a significant part attributed to the rising yields on US Treasury bonds, which in turn drives demand for the Greenback. PMI data from Europe was mixed, with EU Manufacturing PMI falling below expectations at 56.0 (expected 56.6), while the German economy delivered strong results with its Manufacturing PMI at 58.1 (expected 57.6). US data was overall positive as Existing Home Sales at 5.6M surpassed expectations (expected 5.5M).
On Tuesday in France the Business Climate Indicator will be published. In Germany the influential IFO Institute releases the results of its surveys on business expectations, current conditions and economic sentiment.
Pivot:1.2245Support:1.2181.2151.2115Resistance:1.22451.22651.229Scenario 1:short positions below 1.2245 with targets at 1.2180 & 1.2150 in extension.Scenario 2:above 1.2245 look for further upside with 1.2265 & 1.2290 as targets.Comment:the RSI lacks upward momentum.
Gold plummeted to a two week low on Monday as the Dollar continued to appreciate, in part due to high yields on US Treasury Notes. The 10 Year US Treasury Note hit above the 3% yield mark in its intra-day move on Monday for the first time in over 4 years. It is generally assumed that for gold, which is predominantly traded in Dollar, a strong Dollar makes it more expensive in non-Dollar economies and thus affects demand. Treasury Notes on the other hand are seen as competing ‘safe haven’ assets, whose higher yield makes them more attractive compared to gold.
On Tuesday in the US among other fundamental economic statistics, data on New Home Sales and the Consumer Confidence (Conference Board) level are due for publication.
Pivot:1329Support:1321.51317.51313Resistance:13291332.51335Scenario 1:short positions below 1329.00 with targets at 1321.50 & 1317.50 in extension.Scenario 2:above 1329.00 look for further upside with 1332.50 & 1335.00 as targets.Comment:the RSI is mixed with a bearish bias.
After a brief pause in its upward movement on Friday, oil continued to rally, with the Brent Crude surging past the $75 mark. Analysts see the high oil prices caused by declining stockpiles in the US, but also due to geopolitical concerns. Fears of further escalations between Saudi Arabia and Iran, who are both involved as proxies in the civil war in Yemen are a concern on the supply-side of the market.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:73.95Support:7373.573.95Resistance:75.476.176.8Scenario 1:long positions above 73.95 with targets at 75.40 & 76.10 in extension.Scenario 2:below 73.95 look for further downside with 73.50 & 73.00 as targets.Comment:the RSI is mixed to bullish.
US equity indices traded lower on Monday with traders facing concerns about rising interest rates and possible further tariffs, especially in the trade relations between the United States and China. Especially chip makers’ stocks (US Semiconductors ETF -1.25%), while banks (US Banks ETF +0.88%) and energy sector related companies (US Energy +0.63%) saw gains due to the sentiment in their respective sector.
The stock price of Alphabet (NASDAQ:GOOGL) (-0.25%), the parent company of Google saw some volatility in after-hours trading, following the release of the company’s earnings report. However no significant movement was seen despite earnings and revenue surpassing expectations, while costs were also seen on the rise.
Apple (NASDAQ:AAPL) (-0.47%) traded again lower, following the predictions of analysts last week, that the iPhone sales numbers might need to be revised below the previous forecasts. Apple is set to publish its quarterly earnings on May 1.
Among other companies on Tuesday earnings results from 3M, Coca-Cola and Wynn Resorts are set to be released.
Pivot: 6727 Support: 6617 6582 6548.75 Resistance: 6727 6790 6825 Scenario 1: short positions below 6727.00 with targets at 6617.00 & 6582.00 in extension. Scenario 2: above 6727.00 look for further upside with 6790.00 & 6825.00 as targets. Comment: as long as 6727.00 is resistance, likely decline to 6617.00.