The Dollar was again trading stronger against other major currencies, with the US Dollar Index (USDX) closing 0.15% higher. The South African Rand (ZAR) fell against the Dollar, after the South African central bank commented that the global inflation was picking up and the economic growth outlook for the year was weaker than expected.
Gold continued its series of losses and reached a new one year low against the Dollar, while against the Euro the precious metal fell to its lowest point since February 2016. Oil prices picked up on Friday morning after comments from Saudi Arabia, forecasting reduced production in August.
US equity indices settled overall lower. The comments in the Federal Reserve’s Beige Book, that among other factors the lack of available skilled workers and trade policy concerns could raise uncertainty about the future.
Cryptocurrencies consolidated after the recent push higher. Bitcoin traded almost unchanged, while most other significant cryptocurrencies like Ethereum and Ripple suffered losses.
For Friday European Current Account data and Spanish Trade Balance data is expected. Later Canada will release its Retail Sales and CPI figures.
The US Dollar traded on Thursday at its highest level for July against the weakened Canadian Dollar. US data showed again that the US economy remains resilient, with the Philadelphia Fed General Business Conditions level up at 25.7 (expected 22.0), Jobless New Claims down to 207 thousand (expected 220 thousand) and Leading Indicators up by 0.5% m/m (expected +0.4%) for June.
In an interview with CNBC, US President Trump showed displeasures about the Federal Reserve’s rate hikes. White House officials were quick to point out that this is not a new position and the President respects the independence of the Fed.
The Canadian Dollar was in turn pressured by concerns over global trade policies and lower commodity prices.
On Friday in Canada data on Retail Sales and the Consumer Price Index (CPI) is due to be released.
Pivot:1.3245Support:1.32451.3221.3185Resistance:1.3291.3321.335Scenario 1:long positions above 1.3245 with targets at 1.3290 & 1.3320 in extension.Scenario 2:below 1.3245 look for further downside with 1.3220 & 1.3185 as targets.Comment:the RSI lacks downward momentum.
The Chinese Yuan (Offshore – CNH) continued to decline against the Dollar, trading again weaker on Friday, with the USD/CNH at a one year high. US President Trump commented that the strong Dollar compared to a weaker Yuan puts the US at a disadvantage.
Analysts are speculating that the Chinese authorities are becoming increasingly tolerant of further depreciations in the value of the currency. It was also revealed that the Chinese central bank is taking measures to increase liquidity in the corporate bond market as it was facing an even higher number of defaults.
Pivot:6.7979Support:6.79796.77586.7627Resistance:6.86226.87546.8885Scenario 1:the upside prevails as long as 6.7979 is support.Scenario 2:the downside breakout of 6.7979 would call for 6.7758 and 6.7627.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 6.7957 and 6.7925).
Oil had again a volatile trading session with WTI oil contracts closing marginally higher, while Brent oil prices fell. Crude oil prices were steady despite the earlier reported build in crude oil inventories by the Energy Information Administration (EIA), as the reduction of gasoline inventories by 3.2 million barrels was more than anticipated.
Early on Friday oil prices received support as comments from Saudi Arabia emerged, indicating that the Kingdom’s oil exports would decrease in August.
On Friday the US Baker Hughes Oil Rig Count is due to be released, which indicates the number of operating oil rigs in the US. The last two weeks the data indicated a record of 863 operating oil rigs.
Pivot:67.5Support:67.566.966.6Resistance:68.869.1569.75Scenario 1:long @ 68.20 with targets @ 68.80 & 69.15 in extension.Scenario 2:below 67.50 look for further downside with 66.90 & 66.60 as targets.Comment:the RSI is mixed to bullish. The prices are trading above both the 20-period and 50-period moving averages.
US equity indices traded overall lower on Thursday and continued falling in early trading on Friday. The release of the Beige Book by the US Federal Reserve could have had a negative impact on the markets, as in the report concerns over rising costs of raw materials and difficulties for companies to find skilled workers were mentioned. The intensifying trade war was also seen as a factor adding uncertainty.
Especially stocks from financial companies (US Financials ETF –1.51%) traded overall lower, while stocks from the utilities (US Utilities ETF +0.98%) and real estate (US Real Estate ETF +0.99%) sector saw an upside movement.
Microsoft (NASDAQ:MSFT) gained in after-hours trading after the company’s earnings and revenue surpassed expectations, with the company disclosing a significant growth in its cloud services segment.
On Friday earnings from companies like General Electric (NYSE:GE), Honeywell and Schlumberger are due to be released.
Pivot: 2810 Support: 2793.5 2789.5 2782.5 Resistance: 2810 2818 2823.5 Scenario 1: short positions below 2810.00 with targets at 2793.50 & 2789.50 in extension. Scenario 2: above 2810.00 look for further upside with 2818.00 & 2823.50 as targets. Comment: the RSI is capped by a bearish trend line. Both declining 20-period and 50-period moving averages are acting as resistance.