The US Dollar traded lower against other major currencies with the US Dollar Index (USDX) closing 0.22% lower and being in a decline for the third trading day in a row. Timid inflation figures from the US concerned traders that the Fed could hold off on rate hikes later this year.
While the US Dollar was weakened, the Canadian Dollar experienced further declines trading again closed to last week’s USD/CAD high as Bank of Canada Governor Stephen Poloz reiterated the central bank’s dovish policy approach. The Turkish Lira (TRY) continued its decline as the EUR/TRY reached a new all-time high above 4.80 after an amendment to election laws in Turkey increased the possibility of earlier elections.
Gold closed higher on a weaker US Dollar and rising geopolitical concerns, such as the poisoning of a former Russian double-agent in the UK. Oil continued its decline, which was attributed to concerns over rising US shale oil production and API data showing higher stockpiles for the third consecutive week.
US equity indices were down which was credited by some analysts to Trump firing his Secretary of State and protectionist stance, prohibiting the takeover of Qualcomm (NASDAQ:QCOM).
Volatility in major cryptocurrencies seemed to decline in Tuesday’s trading with Bitcoin trading roughly unchanged, while other major cryptocurrencies such as Ethereum and Litecoin were down by about 2-3%. Christine Lagarde, the head of the IMF suggested that blockchain protocols could help implement measures for control/regulation of cryptocurrencies.
On Wednesday Germany publishes CPI data, followed by Retail Sales data in Italy and Industry Production figures from the European Union. In The US also Retail Sales, Business Inventories, Crude Oil Inventories and MBA’s mortgage market data is due for release.
The Dollar declined against the Euro and most other currencies on Tuesday amid restrained inflation data from the US. Annual Core CPI was at +1.8%, while markets expected a +1.9% inflation, which is still below the Federal Reserve’s target of two percent. Analysts still predict the Federal Reserve to increase the interest rate during its meeting this month but are cautious about further increases, should the inflation fall below set targets.
On Wednesday Germany will publish Consumer Price Index (CPI), Italy Retail Sales and the European Union Industrial Production (IP) data.
Pivot:1.2355Support:1.23551.23351.231Resistance:1.24151.24451.247Scenario 1:long positions above 1.2355 with targets at 1.2415 & 1.2445 in extension.Scenario 2:below 1.2355 look for further downside with 1.2335 & 1.2310 as targets.Comment:the RSI is supported by a rising trend line.
Gold
Gold closed higher for the third consecutive trading day in a row. Fundamentally the weak US Dollar as well as lower US Treasury yields helped push gold higher. A weak Dollar makes gold cheaper for non-Dollar countries, while US Treasury Notes compete with gold as a safe haven investment and make gold more attractive with falling yields as the gap between non-interest bearing gold and said bonds narrows.
Global insecurity could also have played some role as US President Trump suddenly announced a change in the leadership of his administration’s State Department. The United Kingdom is meanwhile trying to enlist its allies’ help in dealing with the alleged Russian involvement poisoning a former double-agent in England.
Pivot:1315.5Support:1315.51312.51307Resistance:13321336.51340.5Scenario 1:long positions above 1315.50 with targets at 1332.00 & 1336.50 in extension.Scenario 2:below 1315.50 look for further downside with 1312.50 & 1307.00 as targets.Comment:the RSI advocates for further advance.
WTI Oil
Oil continued its decline on Tuesday over fears of increased US shale oil production. A report by the Energy Information Administration (EIA) indicated that US oil production would hit a new record in April. The American Petroleum Institute (API) reported that crude oil inventories increased by 1.2 million barrels, which marks the third consecutive week of rising stockpiles.
On Wednesday the EIA will release its report regarding the oil stockpiles.
Pivot:61.15Support:60.1559.9559.7Resistance:61.1561.461.95Scenario 1:short positions below 61.15 with targets at 60.15 & 59.95 in extension.Scenario 2:above 61.15 look for further upside with 61.40 & 61.95 as targets.Comment:the RSI is mixed to bearish.
US 500
US equity indices closed lower which by some analysts is attributed to the Trump Administration as the US President unexpectedly fired his Secretary of State, Rex Tillerson and another staffer in his White House office. Also his protectionist stance could be weighing down on the markets as Donald Trump personally prohibited the acquisition of chip designer Qualcomm (-5.07%) by Singapore based Broadcom (NASDAQ:AVGO) (-0.67%) citing just as with steel and aluminum tariffs the national security interests of the United States.
The most significant declines were seen in tech (US Technology ETF -1.33%) and financial (US Financials ETF -1.28%) values, while utilities (US Utilities ETF +0.20%) were able to advance.
The troubled technology company General Electric (NYSE:GE) closed 4.56% lower. It was reported that most of the company’s board members will not receive bonuses for the past year and also that its auditors KPMG were paid the record sum of $142.9 in the previous year.
On Wednesday in the US fundamental data regarding Business Inventories, Retail Sales and the mortgage sector is due to be released. Technology companies Broadcom and Adobe are due to release their quarterly earnings data on Thursday.
Pivot: 2787 Support: 2750 2735 2710 Resistance: 2787 2807.5 2830 Scenario 1: short positions below 2787.00 with targets at 2750.00 & 2735.00 in extension. Scenario 2: above 2787.00 look for further upside with 2807.50 & 2830.00 as targets. Comment: the RSI is bearish and calls for further downside. Prices broke below a rising supporting trend line.