The US Dollar traded lower against other currencies with the US Dollar Index (USDX) closing 0.35% lower. While the Japanese Yen (JPY) was clearly weaker ahead of the Bank of Japan interest rate announcement, the British Pound Sterling (GBP) climbed to a new high against the Dollar – not seen after the Brexit referendum was decided. UK unemployment statistics, which are due to be released on Wednesday could give further impulses. The South African Rand (ZAR)/USD marked a new 2 ½ year low over optimism that the ruling ANC party will be successful in forcing President Zuma, who is seen as burden for the economy, to resign.
Gold traded within its previous day’s range as the government shutdown ended already on Monday with agreement from both parties to extend funding. However there seems to be some ongoing concern as the extension is again only short-lived and both parties demand significant concessions from each other. Oil closed higher supported by news that Saudi-Arabia and Russia want to keep production cuts going beyond the current year.
US equity indices continued to reach all-time high level over optimism about the ongoing earning season. Netflix (NASDAQ:NFLX) jumped in after hours trading as already positive estimates were surpassed.
Cryptocurrencies further declined in Monday’s trading with Bitcoin again testing the $10,000 level. Traders are concerned not only about further restrictions in China, which already clamped down significantly on the market but plans by Germany and France to put cryptocurrency regulation on the G20 meeting agenda in March this year.
On Tuesday the German ZEW economic and business survey results will be released. In the United Kingdom the CBI Industrial Trends Survey and in the US the Redbook Store Sales and Richmond Fed Manufacturing Index will be published.
The EUR/USD traded higher on Monday even though there were reports suggesting that an agreement between Democrats and Republicans to restore US federal government funding would emerge shortly. Euro traders will look on Tuesday at the results of the German ZEW survey. The ongoing progress in forming a government coalition in Germany could also influence markets. The European Central Bank (ECB) meeting on Thursday is seen as a key event this week for the common market currency.
Pivot: 1.221 Support: 1.221 1.2195 1.216Resistance: 1.2265 1.229 1.2305 Scenario 1: long positions above 1.2210 with targets at 1.2265 & 1.2290 in extension. Scenario 2: below 1.2210 look for further downside with 1.2195 & 1.2160 as targets. Comment: the RSI advocates for further advance.
Gold
Gold traded only slightly higher on Monday as the possible deal on an extension of government funding in the US and US Treasury yields close to a three year high limited upwards momentum. Higher yields in US Treasuries, which are also regarded as a safe-haven asset, make an investment in non-interest bearing gold less attractive.
Existing home sales numbers published on Wednesday and Durable Goods New Orders and Gross Domestic Product (GDP) figures set for publication on Friday could be interesting for US Dollar dependent products, such as gold.
Pivot: 1336 Support: 1328.25 1325 1322.5Resistance: 1336 1338 1340.5 Scenario 1: short positions below 1336.00 with targets at 1328.25 & 1325.00 in extension. Scenario 2: above 1336.00 look for further upside with 1338.00 & 1340.50 as targets. Comment: the RSI is mixed.
WTI Oil
Oil traded with significant volatility during Monday’s trading and closed higher on reports that Saudi-Arabia and Russia are signaling that they intend to keep production cuts going well into 2019. Market estimates show that it is expected that stockpiles of oil at various locations in the US could have further declined.
On Tuesday the American Petroleum Institute (API) will publish crude oil stockpile data, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 63.05 Support: 63.05 62.85 62.55Resistance: 64.1 64.3 64.89 Scenario 1: long positions above 63.05 with targets at 64.10 & 64.30 in extension. Scenario 2: below 63.05 look for further downside with 62.85 & 62.55 as targets. Comment: the RSI is bullish and calls for further upside.
US 500
US equity indices raced towards new record high on Monday as the earning season is met with optimism, while markets seem not to worry about the US government shutdown. Biotech (US Biotech ETF +3.23%) and energy (US Energy ETF (NYSE:XLE) +2.14%) stocks were seen with the highest gains of the day. Wynn Resorts jumped up by 8.59% due to its extremely successful Macau casino business. Oil service company Halliburton’s shares closed 6.09% higher as the company reported better than expected profits from Q4 and was optimistic about its business prospects spurred by higher oil and energy prices.
On Tuesday Johnson & Johnson (NYSE:JNJ), Verizon and Procter & Gamble are due to release earnings, while on Wednesday Abbot Laboratories, Comcast (NASDAQ:CMCSA) and General Electric (NYSE:GE) among others will shows earnings data.
Pivot: 2813 Support: 2813 2800 2792 Resistance: 2844 2855 2862 Scenario 1: long positions above 2813.00 with targets at 2844.00 & 2855.00 in extension. Scenario 2: below 2813.00 look for further downside with 2800.00 & 2792.00 as targets. Comment: the RSI is bullish and calls for further upside.