The US Dollar was lower against other majour currencies on Thursday, with the US Dollar Index (USDX) closing 0.37% lower. Markets are concerned that the US could face a government shutdown, should Democrats and Republicans fail to reach a consensus on key issues. The South African Rand (ZAR) improved 1.6% against the Dollar reaching a 2.5 year high as the South African Central Bank kept the interest rates unchanged.
Gold prices retraced down as higher Treasury yields made gold, which does not bear interest a less desirable safe-haven asset. Oil traded lower on EIA data showing expanding US crude oil production.
US equity indices closed lower with especially energy and real estate stocks closing lower. Technology stocks were less affected by the falling sentiment and traded roughly unchanged.
Crytpocurrencies consolidated and were mostly trading up. Ripple particularly gained significant compared to the recent low. Ripple started a significant rally only in mid-December and later surged to over $3 on reports that the transaction-friendly cryptocurrency would be used by Japanese payment providers and MoneyGramm announced a partnership, only to fall below $1 in a the week where China and South Korea announce further cryptocurrency restrictions.
On Friday Germany releases Producer Price Index (PPI) data followed by Switzerland with the Producer and Import Price Index. The United Kingdom publishes retail sales figures. In the US University of Michigan Consumer Sentiment survey results will be released.
The EUR/USD recovered from its low in the 1.218 region and traded higher on concerns on the increasing possibility of a government shutdown in the United States, should the parties not be able to find a compromise.
Economic data from the US was mixed with the Philadelphia Fed General Business Conditions survey showing a lower level than expected at 22.2 (expected 25.0 / previously 26.2), while new jobless claims were lower than expected at 220 thousand and at a 45 years low.
On Friday Germany releases Producer Price Index (PPI) data. In the US University of Michigan Consumer Sentiment survey results will be released.
Pivot: 1.22 Support: 1.2265 1.229 1.2325Resistance: 1.22 1.216 1.211 Scenario 1: long positions above 1.2200 with targets at 1.2265 & 1.2290 in extension. Scenario 2: below 1.2200 look for further downside with 1.2160 & 1.2110 as targets. Comment: the RSI is mixed to bullish.
Bitcoin and other crytpocurrencies rebounded and stabilized in Thursday’s trading. After two days trading below ten thousand, Bitcoin remained clearly above that psychologically sensible threshold.
Cryptocurrencies were under pressure as China and South Korea – two key markets – introduced stricter regulations and restrictions of this new asset class. It was reported that South Korea is investigating officials, who with advance insider knowledge of the crackdown on cryptocurrency exchanges, sold their cryptocoins before measures were announced.
Pivot: 10593 Support: 10593 9849.26 9406.54Resistance: 12696.2 13145.7 13595.2 Scenario 1: as long as 10593.03 is support look for 12696.22. Scenario 2: the downside breakout of 10593.03 would call for 9849.26 and 9406.54. Comment: the RSI is above its neutrality area at 50. The MACD is below its signal line and positive. The pair could retrace. Moreover, the pair is above its 20 and 50 MAs (respectively at 11256.71 and 10736.39).
WTI Oil
Oil stayed in the previous days’ range, closing lower as the Energy Information Agency (EIA) reported a rising US crude oil supply. It is expected that US production would reach 10 million barrels per day in the upcoming weeks.
Crude oil stockpiles according to the EIA however experienced a higher draw than expected and previously seen at 6.9 million barrels over the past reporting week, which was also a higher outflow than seen in the API statistic on Wednesday.
On Friday the Baker Hughes oil rig count in the US will be published, showing the change in number of operating oil rigs in the US.
Pivot: 64.28 Support: 63.5 63.3 63.05Resistance: 64.28 64.55 64.89 Scenario 1: short positions below 64.28 with targets at 63.50 & 63.30 in extension. Scenario 2: above 64.28 look for further upside with 64.55 & 64.89 as targets. Comment: the RSI is bearish and calls for further downside.
US 500
US equity indices traded lower as a possible government shutdown concerned traders. Particularly real estate (US Real Estate ETF -0.94%) and energy (US Energy ETF (NYSE:XLE) -0.71%) stocks traded lower.
Morgan Stanley (NYSE:MS) closed 0.87% higher on earnings beating market expectations. IBM (NYSE:IBM) shares slumped in after hours trading despite better earnings than estimated as lower gross margins and reliance on the hardware unit for revenue concerned investors.
The oil industry service company Schlumberger is due to release quarterly earnings on Friday. Its competitor Halliburton (NYSE:HAL) is due to publish its earnings on Monday next week.
Pivot: 2791 Support: 2791 2780 2769 Resistance: 2809.5 2818 2827.25 Scenario 1: long positions above 2791.00 with targets at 2809.50 & 2818.00 in extension. Scenario 2: below 2791.00 look for further downside with 2780.00 & 2769.00 as targets. Comment: the RSI is mixed with a bullish bias.