The US Dollar was trading at a lower value to other major currencies on Friday, with the US Dollar Index (USDX) closing 0.82% lower. The Chinese Yuan (Offshore – CNH) traded in the USD/CNH for the first time in more than a year above the 6.8 level on Friday, while the US President Trump accused China and the EU of currency manipulation.
After reaching another low earlier last week, gold consolidated as tensions are again increasing between Iran and the US with both parties issuing threats of war. Oil remained in a relatively stable range. The US Baker Hughes Oil Rig Count was reported lower by 5 oil rigs, while speculative positions on crude oil according to the CFTC were at 631.3 thousand (previously 654.5 thousand).
Bitcoin prices climbed to a new 6-week high on Monday. Other major cryptocurrencies, such as Ethereum and Ripple were also trading higher but were unable to match Bitcoin’s performance. Analysts pointed out that as cryptocurrencies move more and more towards the mainstream, the interest could increase again. It was revealed that the prestigious Chartered Financial Analyst (CFA) exam would include cryptocurrencies and blockchain in in its curriculum in the following year.
On Monday in Canada data on Wholesale Trade will be released. In the US the Chicago Fed National Activity Index and Existing Home Sales data is due. For the European Union data on Consumer Confidence is expected. In the Asian-Pacific trading session on Tuesday, Japan will publish its Manufacturing PMI and Leading Indicators data.
The Dollar was under pressure, after the US President Trump criticized alleged currency manipulation by the European Union and China. The markets were also worried about earlier remarks by Trump on Thursday, where he criticized the rising interest rates by the Federal Reserve, which he claimed would put the United States at a disadvantage, while other central banks leave the interest rates at a low level.
On Monday the European Union will publish Consumer Confidence data. In the US the Chicago Fed National Activity Index and data on Existing Home Sales is due to be released.
Pivot:1.1715Support:1.17151.171.167Resistance:1.17651.17851.1805Scenario 1:long positions above 1.1715 with targets at 1.1765 & 1.1785 in extension.Scenario 2:below 1.1715 look for further downside with 1.1700 & 1.1670 as targets.Comment:the RSI is mixed to bullish.
Gold
Gold recovered after the slump towards a new 1 year low last week and traded early on Monday around the level of $1,230. The net speculative positions in gold contracts as reported by the CFTC were lower at 57.8 thousand (previous week 81.4 thousand).
Political tensions in the Middle-East could be a driver for higher gold prices after Iranian President Rouhani warned the US about pursuing hostile policies by cautioning that war with Iran would be the “mother of all wars”, to which the US president explosively responded on his Twitter feed telling the Iranians not to “threaten the United States again” or “suffer the consequences”.
The weaker Dollar could also have been a factor, as it is generally assumed that a weaker Dollar makes the US Dollar denominated gold cheaper in non-Dollar economies.
Key US macroeconomic data is expected on Friday with the release of the Gross Domestic Product (GDP) statistic and the University of Michigan Consumer Sentiment.
Pivot:1226Support:122612211215.5Resistance:123812411245Scenario 1:long positions above 1226.00 with targets at 1238.00 & 1241.00 in extension.Scenario 2:below 1226.00 look for further downside with 1221.00 & 1215.50 as targets.Comment:the RSI is mixed to bullish.
WTI Oil
Oil traded again in a narrow range, with WTI oil closing almost unchanged on Friday. Finance ministers of the G20 countries cautioned at their meeting in Buenos Aires that while the “global economic growth remains robust and unemployment is at a decade low”, there are increasing risks “amid rising trade and geopolitical tensions”. As economic growth requires oil for energy and the production of certain goods, such as plastic, an economic contraction could have negative impact on the demand for oil.
The US Baker Hughes Oil Rig Count was reported on Friday with 858 operating oil rigs, down by 5 from 863 oil rigs the previous week.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:67.7Support:67.767.266.6Resistance:68.969.1569.75Scenario 1:long positions above 67.70 with targets at 68.90 & 69.15 in extension.Scenario 2:below 67.70 look for further downside with 67.20 & 66.60 as targets.Comment:a support base at 67.70 has formed and has allowed for a temporary stabilisation.
US 500
US equity indices closed lower on Friday, with only the Russell 2000 (US 2000) of the major indices managing to close the week higher.
Especially non-cyclical stocks (US Non-cyclicals ETF +0.59%) and banks (US Banks ETF +0.54%) traded overall higher, while losses were seen in the utilities (US Utilities ETF -0.78%) and real estate (US Real Estate -0.83%) sector.
General Electric (NYSE:GE) (-4.58%) was again under pressure, after quarterly earnings showed a drop in profits by 30%, because of the weakness in its power division, while the company reassured that Earnings Per Share (EPS) would remain as projected for the whole of 2018.
Meanwhile Honeywell (+3.63%) posted better than expected quarterly results with $2.12 EPS, again exceeding investors’ expectations.
The earning season continues with Halliburton (NYSE:HAL) releasing quarterly earnings on Monday, Lockheed Martin (NYSE:LMT), 3M and Verizon on Tuesday and Boeing (NYSE:BA), UPS, General Motors (NYSE:GM), Coca-Cola, AMD and Facebook (NASDAQ:FB) among others on Wednesday.
Pivot: 2806 Support: 2789.5 2782.75 2778.5 Resistance: 2806 2813 2818 Scenario 1: short positions below 2806.00 with targets at 2789.50 & 2782.75 in extension. Scenario 2: above 2806.00 look for further upside with 2813.00 & 2818.00 as targets. Comment: the RSI lacks upward momentum. The declining 50-period moving average is acting as resistance.