The US Dollar edged up against other major currencies on Tuesday, with the US Dollar Index (USDX) closing 0.49% higher. The Federal Reserve Chairman Powell reiterated in front of the US Senate’s Banking Committee that strong economic growth supported the case for further interest rate hikes.
Oil continued to trade lower as data from the API indicated a build in oil inventories and Libya started to export oil again.
Cryptocurrencies rallied on Tuesday, with Bitcoin adding close to 20 percent since the start of the week, outperforming some other major cryptocurrencies like Ethereum, which also traded higher. MasterCard meanwhile won a new patent on how to manage “fractional reserves of blockchain currency”, which if actually applied could possibly speed up crypto transactions and allow to pay with fractions of tokens via credit card.
On Wednesday in the United Kingdom CPI and PPI data is expected. Also inflation data for Consumer Prices is expected from the EU. In the US statistics from the Mortgage Bankers’ Association as well as Housing Starts and Permits are expected. In the Asian-Pacific trading session on Thursday Japan will release its Trade Balance data, while Australia publishes Unemployment Rate and Employment statistics.
EUR/USDThe EUR/USD traded lower, after the Dollar was strengthened by statements of the Federal Reserve Chairman Powell, as he gave an upbeat outlook on the economy and confirmed that the central bank was on track for further interest rate hikes.
Italian Consumer Prices (CPI) were growing slower than expected at +0.2% m/m for June (expected +0.3%). In the US Industrial Production increased as expected at +0.6% m/m, while Capacity Utilization marginally missed the set expectations at 78.0% (expected 78.1%).
On Wednesday in the EU the Harmonised Index of Consumer Prices will be released. In the US data on the mortgage market and Housing Starts/Permits is due to released.
Pivot:1.1675Support:1.16351.16151.16Resistance:1.16751.171.1725Scenario 1:short positions below 1.1675 with targets at 1.1635 & 1.1615 in extension.Scenario 2:above 1.1675 look for further upside with 1.1700 & 1.1725 as targets.Comment:as long as the resistance at 1.1675 is not surpassed, the risk of the break below 1.1635 remains high.
Gold prices fell to a new one year low as the Chairman of the Federal Reserve Jerome Powell supported further interest rate hikes over a considerably stronger economic growth in his testimony before the Banking Committee of the US Senate on Tuesday. The expectations of higher interest rates on deposits makes gold in principle less attractive, as no interest is paid on gold holdings.
The stronger Dollar could have also added pressure to the gold value, as the normally in USD traded gold becomes more expensive to buyers in countries with other currencies this way.
Further statistics especially relevant to the US Fed decisions down the road, could be the Philadelphia Fed General Business Conditions, Jobless New Claims and Federal Reserve Bank Total Assets and Credit, which are supposed to be released on Thursday.
Pivot:1229Support:122012171214Resistance:12291234.51237.5Scenario 1:short positions below 1229.00 with targets at 1220.00 & 1217.00 in extension.Scenario 2:above 1229.00 look for further upside with 1234.50 & 1237.50 as targets.Comment:the RSI is mixed to bearish.
Oil prices further declined to a new 3-weeks low. The American Petroleum Institute (API) released statistics on Tuesday, which indicated a modest build for oil stockpiles of 0.6 million barrels. This comes as the first increase in inventories, after the supplies were reduced for four consecutive weeks.
Further relief against high oil prices could have come from news that Libya again was able to export oil from its ports, after the internal political situation preventing oil shipments was seemingly resolved. Also the US Treasury Secretary Mnuchin said that the government might grant some waivers for purchases of Iranian oil, as the administration does not want to upset the global oil markets.
On Wednesday the Energy Information Administration (EIA) will release its weekly report regarding crude oil, gasoline and distillate inventories.
Pivot:68.45Support:67.0566.465.85Resistance:68.4869.2569.95Scenario 1:short positions below 68.45 with targets at 67.05 & 66.40 in extension.Scenario 2:above 68.45 look for further upside with 69.25 & 69.95 as targets.Comment:the RSI is mixed to bearish
US equity indices traded higher on Tuesday, with the NASDAQ (US Tech 100) reaching a new all-time high. Especially stocks in the basic material (US Basic Materials ETF +1.33%) and chip sector (US Semiconductors ETF +1.31%) traded overall higher, while real estate stocks (US Real Estate ETF -0.59%) closed overall lower.
Netflix (NASDAQ:NFLX) (-5.19%) opened more than 13% lower after quarterly financial results missed the expected high subscriber growth targets but was able to recover a sizeable portion of those losses as some traders saw the lower prices as an opportunity to buy the stock at a cheaper prices.
Goldman Sachs (NYSE:GS) (-0.29%) traded lower, despite reporting a 40% rise in profits, beating analysts’ expectations, as the company also had to deal with higher legal and regulatory costs. Goldman also announced that as expected David Solomon will take over the CEO position in the company.
Johnson & Johnson (NYSE:JNJ) (+3.69%) reported higher earnings in the pharmaceutical business, which helped the company to grow better than expected.
On Wednesday more earnings are expected to be released from companies like Morgan Stanley (NYSE:MS), ASML Holding (AS:ASML), Kinder Morgan (NYSE:KMI), eBay, Crown Castle International (NYSE:CCI), American Express (NYSE:AXP) and others.
Pivot: 7400 Support: 7400 7377.5 7329 Resistance: 7445 7480 7510 Scenario 1: long positions above 7400.00 with targets at 7445.00 & 7480.00 in extension. Scenario 2: below 7400.00 look for further downside with 7377.50 & 7339.00 as targets. Comment: the RSI is bullish and calls for further advance.