The US Dollar traded overall weaker against other major currencies, with the US Dollar Index (USDX) closing 0.20% lower on Monday. The Australian Dollar (AUD) traded weaker against the USD after the CPI growth was reported at only +0.4% compared to the previous quarter (expected +0.5%), but was then able to regain strength against the weakened USD.
Oil saw a further downside as the supply situation in Libya eased and reports came out that the Trump administration was considering to tap the strategic oil reserves to make sure that oil and gasoline prices remain stable to the upside. Gold prices were again stable, moving only moderately in both directions ahead of the testimony by the Fed Chairman Powell in front of the US Senate Banking Committee.
Bitcoin and many other cryptocurrencies edged higher on Monday, reversing most of the losses that were sustained in the past week. Cryptocurrencies received a push after it was announced that the asset management company BlackRock has set up a working group concerning blockchain and cryptocurrencies.
On Tuesday in the United Kingdom data on Unemployment and Average Earnings is due to be released. In Canada Manufacturing Sales will be released and in the US Redbook Store Sales, Industrial Production, Capacity Utilization, Housing Market Index and Foreign Demand for Long-Term US Securities.
The EUR/USD pushed higher on Monday and continued to gain early on Tuesday due to the weaker Dollar. The EU Trade Balance for May was lower at €16.9 bn. (previous €18.1 bn.), with the Italian Trade Balance also declining to €2.7 bn. (previous €3.7 bn.).
In the US the Empire State General Business Conditions survey was reported at a level of 22.6 (expected 22.0), while Retail Sales at +0.5% m/m and Business Inventories at 0.4% m/m were reported as expected.
In terms of newsworthy events, the focus on Tuesday for the Dollar currency could be on the testimony of the Federal Reserve Chairman Jerome Powell in front of the Senate’s Banking Committee.
Also on Tuesday in the US the Redbook Store Sales data, Industrial Production, Capacity Utilization and the Housing Market Index are due to be released. On the EU side, Italy will release its Consumer Price Index (CPI) for June.
Pivot: 1.17 Support: 1.17 1.1675 1.1655Resistance: 1.176 1.179 1.182 Scenario 1: long positions above 1.1700 with targets at 1.1760 & 1.1790 in extension. Scenario 2: below 1.1700 look for further downside with 1.1675 & 1.1655 as targets. Comment: the RSI is bullish and calls for further upside.
The Pound Sterling closed moderately higher against the Dollar on Monday, while showing a short lived uptick during trading on Monday. The government led by PM Theresa May managed to push through the Customs Bill in the Commons. As the bill seeks to give the government additional power to forge new trade agreements around the globe, which pro-EU MPs criticized that it would undermine the recently agreed policy for negotiations with the EU and the Defense Minister Bebb resigned in order to vote against this government proposal.
On Tuesday in the UK the Claimant Unemployment Rate and the ILO Unemployment Rate, as well as the Average Earnings statistics are due to be released. Then on Wednesday the CPI and PPI will be published.
Pivot: 1.3215 Support: 1.3215 1.319 1.3165Resistance: 1.329 1.3325 1.3365 Scenario 1: long positions above 1.3215 with targets at 1.3290 & 1.3325 in extension. Scenario 2: below 1.3215 look for further downside with 1.3190 & 1.3165 as targets. Comment: a support base at 1.3215 has formed and has allowed for a temporary stabilisation.
WTI Oil
Oil prices plummeted towards a new low for July with the US talking about a possible use of the Strategic Petroleum Reserve. As Libyan ports opened to crude oil exports, concerns about disruption in that part of the world were eased. Also the statement by US Treasury Secretary Mnuchin, that some oil importers could be exempted from the ban on buying Iranian oil in November, when the planned sanctions come into force reduced concerns about tightening supplies.
Meanwhile in Norway unionized oil workers staged a strike on Monday, with unions trying to convince workers at more oil fields to join this industrial action.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 68.8 Support: 67 66.4 65.75Resistance: 68.8 69.95 70.75 Scenario 1: short positions below 68.80 with targets at 67.00 & 66.40 in extension. Scenario 2: above 68.80 look for further upside with 69.95 & 70.75 as targets. Comment: the RSI has broken down its 30 level.
US 500
US equity future indices closed overall lower on Monday. Especially biotech (US Biotech ETF -0.80%) and basic material (US Basic Materials ETF -0.80%) stocks traded overall lower, while bank (US Banks ETF +1.36%) stocks were able to recover some territory.
Netflix (NASDAQ:NFLX) traded sharply lower in after-hours trading, after the company released disappointing earning numbers. Investors were especially disappointed by the slow growth in subscriber numbers, with only 4.47 million international subscribers (expected 5.9 million) and 0.67 million US subscribers (expected 1.2 million) added.
The earning season continues with Goldman Sachs (NYSE:GS) scheduled to release their quarterly earnings on Tuesday before the trading session. Goldman is also expected to officially name David Solomon as its new CEO this week. Other significant earnings for this week Johnson & Johnson (NYSE:JNJ) on Tuesday, Morgan Stanley (NYSE:MS) and ASML Holding (AS:ASML) on Wednesday and many more US and European companies later this week.
Pivot: 2793 Support: 2793 2787.5 2781 Resistance: 2804 2809 2814 Scenario 1: long positions above 2793.00 with targets at 2804.00 & 2809.00 in extension. Scenario 2: below 2793.00 look for further downside with 2787.50 & 2781.00 as targets. Comment: the RSI is mixed with a bullish bias. A support base at 2793 should maintain the buying interest.