The US Dollar traded on average against other currencies almost unchanged on Friday, with the US Dollar Index (USDX) closing 0.01% lower. The Canadian Dollar (CAD) gained visibly against the Dollar, trading for the fourth consecutive day stronger against the USD. The CAD was possibly supported by the announcement from US President Trump surrounding the planned tariffs on steel and aluminum, as he excluded the NAFTA trading partners Canada and Mexico from the tariffs for some time, to be able to renegotiate their trade agreements.
Gold closed slightly higher, while reaching during Friday’s trading a weekly low as yields on 10-Year US Treasuries were above the 2.90% level for the first time since Tuesday. Speculative bullish net positions in gold futures according to CFTC data were slightly higher compared to the previous week.
Oil traded higher supported by broadly positive economic sentiment data as well as a smaller amount of operating oil rigs in the US according to Baker Hughes data.
US equity indices closed higher on positive NPF data at its highest level since mid-2016 with 313,000 jobs added to the payroll. The easing policy announcements from the US President’s office as Canada and Mexico will not be subjected to additional tariffs while a new trade deal is supposed to be made as well as reconciliatory moves between the US and North Korea possibly reduced political tensions.
Bitcoin and other cryptocurrency started a recovery on Sunday after Bitcoin reached below $8,500 on concerns about regulatory intervention in cryptocurrency regulation the US and Japan. Another concern, especially to Bitcoin traders, is the amount of tokens the bankruptcy lawyer of the defunct Mt Gox exchange is bringing to the market. While his task is to recover the value lost to the creditors, many Bitcoin investors are unhappy about the additional supply in the already struggling market.
On Monday the US Treasury Budget level will be published. On Tuesday the US will release its CPI data, followed by Germany with their release on Wednesday and Italy and the European Union on Friday.
The Japanese Yen closed weaker on Friday as the Bank of Japan (BoJ) commented that it was committed to the current policy and would not change it as long as inflation did not reach the intended 2% target. Inflation data released at the end of February indicated an inflation rate of +0.9% for January compared to the previous year. While the NFP in the United States at 313 thousand was the best result in over 1.5 years, Average Hourly Earnings rose by only 0.1% (expected +0.2% / previous +0.3%).
Japan publishes on Tuesday its Capital Goods Price Index (PPI) and Tertiary Index data. The US will release its Consumer Price Index (CPI) on Tuesday.
Pivot:106.45Support:107.3107.61407.9Resistance:106.45106.25105.9Scenario 1:long positions above 106.45 with targets at 107.30 & 107.60 in extension.Scenario 2:below 106.45 look for further downside with 106.25 & 105.90 as targets.Comment:the RSI is mixed to bullish.
The Chinese Yuan (CNH) traded stronger against the Dollar on Friday. One possible factor was that the reported bank loans in February at 839.3B Yuan were below the previous months and analysts expectations. The credit market is one of the key concerns of the Chinese economy. Amid the ongoing China National People’s Congress it was announced that China is ready ‘to open up its market and support free global trade’ in which the Yuan is set to play a more significant role.
On Wednesday China is set to release Industrial Production (IP), Fixed Asset Investment and Retail Sales data.
Pivot:6.3132Support:6.31836.31326.3002Resistance:6.34026.34796.3556Scenario 1:rebound towards 6.3479.Scenario 2:the downside breakout of 6.3132 would call for 6.3002 and 6.2924.Comment:the RSI is below its neutrality area at 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the pair is trading under both its 20 and 50 MAs (respectively at 6.3278 and 6.3361).
WTI Oil
Oil rose sharply on Friday ending the three week long losing streak of oil. The Baker Hughes Oil Rig Count for the US indicated a fall in operating oil rigs by four to 796. This marks the first fall in operating oil rigs in almost two months. Some analysts suggested that the rise can also be attributed to the strong rise in equities in the US followed by strong job market data as well as President Trump’s concessions to its neighbors regarding the soon to be implemented tariffs on aluminum and steel.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:61Support:6160.4560.15Resistance:62.4562.8563.3Scenario 1:long positions above 61.00 with targets at 62.45 & 62.85 in extension.Scenario 2:below 61.00 look for further downside with 60.45 & 60.15 as targets.Comment:the RSI broke above a declining trend line.
US 500
US equity indices closed all significantly higher helped among others by solid employment data with the highly influential Non-Farm Payroll (NFP) figure showing 313,000 jobs added, which was significantly above expectations (expected +205,000 / previous +200,000).
Particularly high gains were seen in financial (US Financials ETF +2.52%) and industrial (US Industrial ETF +2.26%) stocks. While most blue-chip stocks closed higher, AMD (-2.18%) closed lower. AMD was in recent days subject to unsubstantiated takeover rumors. Furthermore some question the sustainability of the volatile cryptocurrency mining market, which to some extent also fuels demand for graphic processors from AMD and Nvidia (+1.78%).
On Monday the US Treasury releases its Budget level. This week on Thursday among others, the technology companies Broadcom (NASDAQ:AVGO) and Adobe are due to release their quarterly earnings.
Pivot: 2750 Support: 2795 2815 2835 Resistance: 2750 2727 2706 Scenario 1: long positions above 2750.00 with targets at 2795.00 & 2815.00 in extension. Scenario 2: below 2750.00 look for further downside with 2727.00 & 2706.00 as targets. Comment: the RSI shows upside momentum.