The US Dollar reached a new high for 2018 with the US Dollar Index (USDX), which measures the performance of the Dollar against other major currencies trading 0.64% higher. Investors are increasingly shunning the Turkish Lira (TRY), which yet again fell to a new all-time low on Tuesday, concerned about the economic policies of a new Erdogan led government, should he secure the vote in the June elections.
Gold fell below the $1,300 mark for the first time in 2018 amid a strengthening Dollar and the 10 Year US Treasury Note Yield close to a 7 year high. Oil eased off the recent high point and retraced following API inventory data showing close to 5 million barrels more in inventories, while market participants expected a small draw on stockpiles.
Cryptocurrencies faced again declines on Tuesday, and continued that trend on Wednesday with Bitcoin almost hitting a 4 weeks low. The CME Group (NASDAQ:CME) announced that it now will review its client’s demand for Ethereum futures, after it launched Bitcoin futures in December last year.
On Wednesday Germany, Italy and the EU will publish CPI (Consumer Price Index) data. In the US Housing Starts, Permits, Industrial Production and Capacity Utilization statistics are set to be released. In Canada Manufacturing Sales data is set to be released.
EUR/USDAfter reaching new intraday highs the EUR/USD fell sharply downward, hitting a new low for the year 2018. This comes as 10 Year US Treasury Yields hit a new high since 2011. The recent tone by US President Trump, vowing to work with the Chinese to save the Chinese ZTE (HK:0763) company hit by US Iran sanctions, could have made investors reduce their expectations for a trade war.
The German ZEW Survey on current conditions published on Tuesday was at 87.4 (expected 85.8) above expectations. GDP numbers for Europe were with an annual growth of 2.5% within expectations and Industrial Production was at +0.5%m/m (expected +0.7%) below expectations.
On Wednesday in Germany, Italy and the European Union the newest inflation data is set to be released.
Pivot:1.189Support:1.181.1761.172Resistance:1.1891.1941.1995Scenario 1:short positions below 1.1890 with targets at 1.1800 & 1.1760 in extension.Scenario 2:above 1.1890 look for further upside with 1.1940 & 1.1995 as targets.Comment:the RSI is mixed to bearish.
With the 10 Year US Treasury Yield suddenly jumping to a new high since July 2011, gold faced significant pressure and fell to a 4-1/2 months low, below the $1,300 threshold it held this year until now. The strong Dollar, which went with this move, could have increased the downward movement as a strong Dollar makes gold more expensive in non-Dollar markets.
On Wednesday a wealth of US based fundamental data for housing and industrial activity could give further insights on the US economy and thus affect the Dollar and other assets.
Pivot:1301.05Support:12881283.51279Resistance:1301.51305.51311Scenario 1:short positions below 1301.50 with targets at 1288.00 & 1283.50 in extension.Scenario 2:above 1301.50 look for further upside with 1305.50 & 1311.00 as targets.Comment:the RSI is mixed to bearish.
As the WTI oil hit a new 3-1/2 year high during trading on Tuesday, it later retraced from it following data from the American Petroleum Institute (API) indicating that crude oil stockpiles in the US unexpectedly rose by over 4.8 million barrels, while analysts expected a small draw on those stockpiles. Meanwhile market participants continue to worry about the effect of US sanctions against Iran. As China’s refinery runs are close to a record level, traders are concerned that this condition might not last for long.
On Wednesday the Energy Information Administration (EIA) is due to publish it crude oil stockpile statistics.
Pivot:71.4Support:70.670.370Resistance:71.471.972.3Scenario 1:short positions below 71.40 with targets at 70.60 & 70.30 in extension.Scenario 2:above 71.40 look for further upside with 71.90 & 72.30 as targets.Comment:the RSI is mixed with a bearish bias. As long as 71.40 is resistance, expect a return to 70.60.
US equity indices eased off from the recent high seen on Monday, while the S&P 500 (US 500) was able to hold on to the 2,700 level despite the market turmoil. Declines were seen especially in health care (US Health Care ETF -1.29%) and real estate (US Real Estate -1.47%) stocks. Meanwhile bank stock were seen trading higher (US Banks +0.46%).
Tesla (NASDAQ:TSLA) (-2.68%) is continuing to face criticism from analysts and investors. An analyst from Morgan Stanley (NYSE:MS) sees fundamental issues in the manufacturing of the new Model 3 production, while investors are opposed to reelect some board directors to the company, such as Elon Musk’s brother Kimbal.
Snapchat (-3.64%) reached a new all-time low on Tuesday as the social media company introduced short ads, which users cannot skip, after ad companies were unhappy about the average ad time of less than 2 seconds.
The earning season continues with some blue chip companies still due to disclose their quarterly earnings, such as Cisco on Wednesday and Walmart (NYSE:WMT) on Thursday.
Pivot: 2717.5 Support: 2696 2685 2671.25 Resistance: 2717.5 2729 2741.25 Scenario 1: short positions below 2717.50 with targets at 2696.00 & 2685.00 in extension. Scenario 2: above 2717.50 look for further upside with 2729.00 & 2741.25 as targets. Comment: technically the RSI is below its neutrality area at 50. The declining 50-period moving average is playing a resistance role.