The US Dollar traded slightly higher against other majour currencies on Friday with the US Dollar Index (USDX) closing 0.16% higher. The Turkish Lira (TRY) opened 0.96% higher on Monday, following reports of Turkish military action against Kurdish positions in Northern Syria.
Gold slightly increased on Friday before the government shutdown became apparent but stayed clearly within its range of the previous days. Oil traded lower as markets are concerned about US oversupply from shale oil, following higher prices making it profitable again to use those extraction methods.
Equities continued the rally while ahead some of the most significant weeks in terms of quarterly earnings publication.
Cryptocurrency markets continue to experience significant volatility. During the weekend the marked moved towards a recovery, with the Bitcoin trading again over $13,000 before retracing later to the previous week’s stabilized levels around $11,000.
On Tuesday in Germany the ZEW business expectations and conditions survey results will be published. The United Kingdom releases its CBI Industrial Trends Survey. Japan merchandise trade, import and export statistics will be released during Wednesday’s Asian trading session.
The EUR/USD [i] retreated on Friday as it may have been expected that a government shutdown in the US could be prevented at the last minute. However the Democrats and Republicans failed to make a deal, while let to the Dollar opening weaker on Monday night. However the market reaction was relatively relaxed with the VIX (Volatility Index) trading early on Monday within the previous week’s levels. On Monday the Chicago Fed National Activity Index (CFNAI) will be published. The markets will be anxiously awaiting the results of Thursday’s meeting of the European Central Bank (ECB), where a decision regarding the interest rate will be announced and traders hope to get clues regarding future central bank policy.
Pivot:1.2215Support:1.22151.21951.216Resistance:1.22951.23251.237Scenario 1:long positions above 1.2215 with targets at 1.2295 & 1.2325 in extension.Scenario 2:below 1.2215 look for further downside with 1.2195 & 1.2160 as targets.Comment:the RSI calls for a rebound.
Gold
Gold [i] traded higher at the end of the week amid fear of a US government shutdown, since a deal to extend federal funding had to be reached by midnight on Friday. As it remains unclear how long this impasse would last or could be solved relatively quickly, markets seem to react relatively calm to the news on Monday morning. Key data from the US is expected on Wednesday with the Existing Home Sales statistics and on Friday with the Durable Goods New Orders and Gross Domestic Product (GDP) figures.
Pivot:1330Support:133013251322.5Resistance:134013451349.8Scenario 1:long positions above 1330.00 with targets at 1340.00 & 1345.00 in extension.Scenario 2:below 1330.00 look for further downside with 1325.00 & 1322.50 as targets.Comment:the RSI is mixed to bullish.
WTI Oil
Oil [i] settled lower on Friday, ending the four weeks long series of higher prices over concerns of increasing US shale oil production, made possible by higher prices. The fall comes despite the Baker Hughes Oil Rig Count for the US showing five less operating oil rigs. Early in Monday’s trading oil rose over fears of the Turkish intervention in Kurdish-held areas of Syria due to concerns about the regional oil supply channels. At the OPEC meeting in Oman, Saudi-Arabia urged for an extension of cooperation with non-OPEC members beyond 2018.
On Tuesday the American Petroleum Institute (API) will publish crude oil stockpile data, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:63.75Support:62.8562.5562.25Resistance:63.7564.164.3Scenario 1:short positions below 63.75 with targets at 62.85 & 62.55 in extension.Scenario 2:above 63.75 look for further upside with 64.10 & 64.30 as targets.Comment:as long as 63.75 is resistance, look for choppy price action with a bearish bias. Crude oil broke below the triangle pattern.
US 500
US equity indices [i] closed higher on Friday with the S&P 500 (US 500) and NASDAQ (US Tech 100) reaching again a new all-time high despite worries about a government shutdown. Bank (US Banks ETF +1.46%) stocks were seen trading significantly higher, while utility (US Utilities ETF -0.26%) stocks were the biggest losers in Friday’s trading.
General Electric (NYSE:GE) slipped by 3.04% ahead of the company publishing earnings on Wednesday. Sportswear company Nike (NYSE:NKE) jumped by 4.68% over analysts’ optimism about the company’s new products.
On Monday Netflix (NASDAQ:NFLX), Halliburton (NYSE:HAL) and Wynn Resorts will report earning numbers. For Tuesday among others, releases from Johnson & Johnson (NYSE:JNJ), Verizon and Procter& Gamble are scheduled.
Pivot: 2791 Support: 2791 2780 2769 Resistance: 2821 2827.25 2835 Scenario 1: long positions above 2791.00 with targets at 2821.00 & 2827.25 in extension. Scenario 2: below 2791.00 look for further downside with 2780.00 & 2769.00 as targets. Comment: the RSI shows upside momentum.