The Dollar ended the day on Tuesday lower compared to other major currencies, with the US Dollar Index (USDX) falling by 0.15%. However later the Greenback received further support as the US Treasuries yield climbed during early morning hours, driving the Dollar demand. The overall strength of the Dollar put pressure on other currencies, especially in the emerging markets, such as the South African Rand (ZAR) and the Indian Rupee (INR).
After a brief recovery, gold fell in early Wednesday trading, pressured by the strong Dollar and the increasing US Treasuries yields. Oil retraced from its recent high, as US stockpiles were higher than expected, according to data from the API.
US equity indices traded lower on concerns about earnings, tech values and also the higher yield. This comes despite positive data from the US, such as New Home Sales at 694 thousand (expected 630 thousand) and Consumer confidence higher at 128.7 (expected 126.1).
On Wednesday the Mortgage Bankers' Association publishes multiple mortgage market indices. Later in the Asian trading session the Bank of Japan is set to announce its interest rate decision.
Not significantly moved by the again higher 10 Year US Treasury yield, the EUR/USD stabilized on Tuesday above the 1.22 level. The markets will in particular pay close attention to the results of the policy meeting of the European Central Bank (ECB) on Thursday. At the ECB meeting in March, the central bank surprised the markets by removing its assurance to expand its support programs of buying bonds if needed.
Overall economic data from the European Union was below expectations on Tuesday, with the French Business Climate Indicator at 109 (expected 110) and German IFO Survey on Business Expectations at 98.7 (expected 99.5).
On Wednesday the Spanish PPI and the French Consumer Confidence data is due to be published.
Pivot:1.2245Support:1.2181.2151.211Resistance: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 shows downside momentum.
Bitcoin reached a new 6-week high on Wednesday as some analysts predict that the market ended its consolidation phase. Technical innovation, such as the “Lightning network”, meant to improve transactions by using a separate blockchain, but also the entry of institutional investors is attributed to the maturing of the market.
Other cryptocurrencies, which in recent days had a better performance than Bitcoin, had a sharper correction, with Bitcoin Cash for example losing more than 10% over the day.
Pivot:9677Support:910589498793Resistance:957496779941Scenario 1:target 8949.Scenario 2:the upside breakout of 9677, would call for 9941 and 10098.Comment:the RSI is below its neutrality area at 50. The MACD is below its signal line and positive. The MACD must penetrate its zero line to expect further downside. Moreover, the pair is below its 20 MA (9537) but above its 50 MA (9395).
WTI Oil
Oil traded lower on Tuesday on expectations of higher US stockpiles and also on the hopes that the US could be convinced by its partners to stick to a deal with Iran. Data from the American Petroleum Institute (API) showed an increase of crude oil stockpiles by 1.1 million barrels compared to the previous week, while the markets expected earlier that stockpiles would decrease. The markets will still consider the implication of rising oil production in the US, as the output in the Permian Basin is expected to hit a new record in May and the Baker Hughes Oil Rig Count published last Friday showed an increase in operating oil rigs.
On Wednesday the Energy Information Administration (EIA) is set to release its data on crude oil, gasoline and distillate stockpiles.
Pivot:61.7Support:61.758.254.5Resistance:7073.577.5Scenario 1:long positions above 61.70 with targets at 70.00 & 73.50 in extension.Scenario 2:below 61.70 look for further downside with 58.20 & 54.50 as targets.Comment:the RSI is mixed with a bullish bias.
US 500
Despite overall positive economic data being reported on Tuesday in the US, equity indices closed lower, as yields continued to rise. The 10 Year US Treasury Yield, which is oftentimes used as benchmark crossed over the 3 percent threshold on Monday for the first time in over 4 years and continued to reach higher levels up to now.
In this sentiment gains were seen in the utilities (US Utilities ETF +0.70%) and bank (US Banks ETF +0.54%) sector, while bigger losses were seen in tech (US Technology ETF -1.86%) and industrial (US Industrial ETF -2.92%) values.
3M (-7.09%) had its worst trading day in over 9 years after the company’s earnings guidance for 2018 was lowered by the company as it reported on its quarterly earnings. Apple (NASDAQ:AAPL) (-1.46%) continued now to decline for the fourth trading day in a row, after on Friday analyst predicted a slower expansion in the field of high end smartphones. An unconfirmed and allegedly leaked report indicated that the company will cancel its iPhone X program as consumers are turning their backs on expensive smartphones.
On Wednesday among other companies AMD, Boeing (NYSE:BA), eBay and QUALCOMM are schedule to release their quarterly earnings numbers.
Pivot: 2610 Support: 2610 2600 2585 Resistance: 2650 2660 2670.5 Scenario 1: long positions above 2610.00 with targets at 2650.00 & 2660.00 in extension. Scenario 2: below 2610.00 look for further downside with 2600.00 & 2585.00 as targets. Comment: the RSI is mixed with a bullish bias. A technical rebound is expected towards 2660, as long as 2610 is not broken.