The US Dollar traded overall weaker compared to other major currencies on Wednesday, with the US Dollar Index (USDX) falling by 0.43%. The Mexican Peso (MXN) meanwhile continued to appreciate against the US Dollar with the USD/MXN falling by more than 1 percent on Wednesday and overall more than 10 percent since its pre-election low in June.
Oil prices pushed higher, after data from the EIA indicated that crude oil and also gasoline and distillate inventories were reduced more significantly than expected. With the weaker Dollar, gold was able to recover, trading higher around the $1,230 level.
Equity indices closed higher on Wednesday, supported by an upbeat earnings season. However Facebook (NASDAQ:FB) reported disappointing quarterly results with and an outlook of lower margins in the future. The stock price dropped significantly in after-hours trading.
On Thursday the ECB will announce its interest rate decision. In the United Kingdom GDP data will be released. In the US Durable Goods New Orders, Jobless New Claims and Federal Reserve Bank statistics regarding Total Assets, Credit and M2 Monetary Supply will be published.
The EUR/USD traded higher after it seemed it was announced that the US and the EU were inactive negotiations to reduce the ongoing trade tensions as the EU side vowed to support increased import of US liquefied natural gas and soybeans and both sides would work on reducing industrial tariffs.
The German IFO Survey showed overall mostly the expected results, with Economic Sentiment higher at 105.3 (expected 105.0 / previous 105.1), while Current Conditions were reported lower than expected at 101.7 (expected 102.0 / previous 101.8).
The key event for Thursday will be the meeting of the European Central Bank. While from the previous comments of the ECB it is expected that the policy will remain unchanged, markets will still be eager to hear the central bank’s assessment of the future.
Also on Thursday the German GfK Consumer Sentiment survey and the Italian ISAE Consumer Confidence statistics are due to be released.
Pivot: 1.171 Support: 1.171 1.1685 1.166Resistance: 1.175 1.177 1.179 Scenario 1: long positions above 1.1710 with targets at 1.1750 & 1.1770 in extension. Scenario 2: below 1.1710 look for further downside with 1.1685 & 1.1660 as targets. Comment: the RSI shows upside momentum.
Bitcoin traded almost unchanged after racing higher over the second half of July. Other major cryptocurrencies, such as Ethereum and ripple also traded with relatively little movement.
Some analysts see still potential in Bitcoin mentioning that approval of Bitcoin ETFs or the adoption of Bitcoin by major stake holders in the finance industry, such as MasterCard, which recently filed a new patent for bitcoin transactions on credit cards, could impact the value of the cryptocurrency.
Chinese authorities in the XinJiang Uyghur Autonomous Region meanwhile cautioned that cryptocurrency mining has to stop there by the end of August. The region has been attractive for cryptocurrency miners due to the low cost of electricity and relatively mild weather.
Pivot: 8060 Support: 8060 7850 7690Resistance: 8330 8500 8660 Scenario 1: long positions above 8060 with targets at 8330 & 8500 in extension. Scenario 2: below 8060 look for further downside with 7850 & 7690 as targets. Comment: the RSI calls for a rebound.
WTI Oil
Oil edged up higher after data from the Energy Information Administration (EIA) showed that stockpiles of crude oil, gasoline and distillates declined over the course of the previous week. Crude oil inventories fell by 6.1 million barrels, which more than twice of the anticipated outflows. In line with data from the American Petroleum Institute (API) released on Tuesday, gasoline inventories also saw a significant draw, with the EIA reporting inventories reduced by 2.3 million barrels.
On Wednesday Saudi Arabia announced that it was temporarily stopping oil shipments through the Red Sea after two of its oil tankers were allegedly attacked by rebels from Yemen.
On Friday the US Banker Hughes Oil Rig Count statistic will be released, which will show the amount of operating oil rigs in the US. Last week the oil rig count was reduces by 5 to 858 operating oil rigs.
Pivot: 68.85 Support: 68.85 68.35 67.95Resistance: 69.75 70.15 70.6 Scenario 1: long positions above 68.85 with targets at 69.75 & 70.15 in extension. Scenario 2: below 68.85 look for further downside with 68.35 & 67.95 as targets. Comment: the RSI is supported by a rising trend line. Crude oil broke above declining channel, calling for a further upside.
US 500
US equity indices closed overall higher supported by positive earnings releases, with analysts pointing out that of those companies that reported earnings up to last Friday, almost all managed to beat the set expectations.
UPS (+7.07%) rose after reporting better than expected results for the second quarter with domestic and international revenue rising due to higher revenue per piece and higher e-commerce demand.
Processor designer AMD traded higher in after-hours trading as the company’s quarterly results surpassed expectations and were reported at the highest level in seven years and analysts seeming to accept that cryptocurrency mining demand for graphic chips would drop in the coming quarters.
Facebook shares fell at times by more than 20 percent in after-hours trading despite the company higher profits, while still missing the expected results. Issues regarding hacks and data breaches, as well as forecasts of falling margins over the coming years and a stagnating user growth were reasons given for this drawdown.
The earning season continues with companies like McDonalds, Celgene (NASDAQ:CELG) and MasterCard scheduled to release their earning son Thursday. On Friday Twitter, Exxon Mobil (NYSE:XOM), Colgate-Palmolive and other companies are due to present their quarterly earnings.
Pivot: 2831 Support: 2831 2821.75 2814 Resistance: 2840 2849.5 2854 Scenario 1: long positions above 2831.00 with targets at 2840.00 & 2849.50 in extension. Scenario 2: below 2831.00 look for further downside with 2821.75 & 2814.00 as targets. Comment: technically the RSI is above its neutrality area at 50. The downside room should be limited by the key support at 2831 (the high of July 24).