In a slow trading session on Wednesday, due to the Independence Day Holiday in the US, the US Dollar modestly declined against other major currencies, with the US Dollar Index (USDX) closing 0.13 percent lower.
WTI oil fell from its recent 3-1/2 high as US President Trump urged the OPEC cartel to reduce prices. China is expected to put tariffs on its US crude oil imports at some point, should the US go through with the plan to levy tariffs on Chinese imports. Gold traded almost unchanged ahead of the publication of the FOMC meeting minutes on Thursday.
US equity indices futures closed moderately on Independence Day, while investors await what happens next in the trade standoff.
Cryptocurrencies continued their recovery, with Bitcoin hitting a 12-day high. Other cryptocurrencies, such as Ethereum and Bitcoin Cash also continued to trade higher.
On Thursday in terms of data, the focus will be mainly on the US as job market data, such as the ADP Employment Report and Jobless New Claims level will be released. The Energy Information Administration (EIA) is due to publish its weekly crude oil, gasoline and distillate inventory data.
EUR/USD
The EUR/USD gained on Wednesday and continued to trade higher in early trading on Thursday. With no data coming in from the US, due to the Independence Day Holiday, the focus was on European data. German Services PMI reached level of 54.5, surpassing expectations (expected and previous 53.9). The European Services PMI also managed to surpass expectations at 55.2 (expected 55.0).
Markets remain concerned what happens, if the United States actually go through with their plan as scheduled this Friday, to impose tariffs on $34B worth of imports from China.
On Thursday in Germany Manufacturer’s Orders data is set to be released. In the US data on Jobless claims, Services PMI and the ISM Non-Manufacturing statistics are due to be released. Also on Thursday the minutes from the last meeting of the FOMC will be published.
Pivot:1.165Support:1.1651.1631.1615Resistance:1.1711.1731.1755Scenario 1:long positions above 1.1650 with targets at 1.1710 & 1.1730 in extension.Scenario 2:below 1.1650 look for further downside with 1.1630 & 1.1615 as targets.Comment:the RSI calls for a new upleg.
The Chinese Yuan (Offshore – CNH) strengthened for the second consecutive day, putting a halt to the long lasting series of declining against the US Dollar. The Yuan gained strength after the governor of the People’s Bank of China Yi Gang confirmed that his central bank was monitoring the recent movements closely and still has ample tools to keep the Yuan stable.
However the Yuan later again declined in early trading on Thursday. The Chinese side plans to impose tariffs on US imports as a countermeasure to their tariffs on Chinese goods, but announced it will wait until the US will actually apply them, as announced this Friday.
Next week on Tuesday China releases its Consumer Price Index (CPI) and Producer Price Index (PPI) data, followed by Trade Balance statistics next week on Friday.
Pivot:6.6356Support:6.63566.61726.6063Resistance:6.68466.69556.7064Scenario 1:the upside prevails as long as 6.6356 is support.Scenario 2:below 6.6356, expect 6.6172 and 6.6063.Comment:the RSI is above its neutrality area at 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the pair is trading above both its 20 and 50 MAs (respectively at 6.6436 and 6.6407).
The SMI (SWISS 20) traded again higher on Wednesday, closing for the fifth consecutive day higher. While Retail Sales numbers released earlier this week were below expectations at -0.1% m/m (expected +2.6%) for May, the SVME PMI level surpassed expectations at a level of 61.6 (expected 61.0).
Especially stocks of pharma companies Novartis (+2.25%) and Roche (+1.02%) traded higher on Wednesday, while stocks of companies depending on stable economic growth, such as ABB (-1.36%) and building material company LafargeHolcim (-1.36%) traded lower.
On Thursday in Switzerland CPI data is due to be released. Next week in Switzerland Unemployment rate and PPI data is due.
Pivot:8555Support:855585008459Resistance:868887358780Scenario 1:long positions above 8555.00 with targets at 8688.00 & 8735.00 in extension.Scenario 2:below 8555.00 look for further downside with 8500.00 & 8459.00 as targets.Comment:the RSI is above its neutrality area at 50%.
The FTSE 100 (UK 100) closed modestly higher on Thursday in a session with very limited movement.
The UK government faces continued pressure to find a solution for Brexit with the European Union, as businesses are facing uncertainty. Jaguar Land Rover has cautioned that it would have to rethink its £80B worth of investment in production facilities in the UK, putting 40,000 jobs at risk, as the company cannot be sure what Brexit would mean for its business. Eurosceptics in PM Theresa May’s party voiced opposition to accept EU trade rules and regulations.
Glencore (LON:GLEN) (+1.07%) struggled to recover losses after the plunge in its stock prices on Wednesday, when US authorities launched a probe regarding corruption and money laundering accusations against the company in its operations in Africa and Latin America.
On Thursday the BoE Governor Carney is due to hold a speech. Then on Friday the Halifax House Price Index will be released.
Pivot: 7474 Support: 7474 7445 7420 Resistance: 7530 7572 7605 Scenario 1: long positions above 7474.00 with targets at 7530.00 & 7572.00 in extension. Scenario 2: below 7474.00 look for further downside with 7445.00 & 7420.00 as targets. Comment: the RSI lacks momentum.