The US Dollar traded stronger for every day of the week, as the US Dollar Index (USDX) closed 0.21% higher on Friday. The Dollar continued the trend in early Monday trading, spurred by indications that the US and China possibly could find an agreement on trade, pushing the USDX to a new 5 months high. Emerging markets currencies felt the pressure from the strong Dollar, as the South African Rand (ZAR), Indian Rupee (INR) and the Turkish Lira (TRY) marked also new lows against the Dollar for this year. The Turkish Lira is at its all-time low against the Dollar with USD/TRY up by more than 20 percent so far in 2018.
Pressured by the strong Dollar, gold further declined to a new 4-1/2 months low. Oil received a boost from the trade talks between the US and China and traded again higher, as analysts see the two superpowers negotiating a deal over the coming months.
After closing lower on a weekly basis on Friday, US equity indices futures traded higher on Monday as China dropped the probe about US sorghum dumping allegations and indicated readiness to work towards reducing the trade deficit.
Bitcoin reached its 4 weeks low below the $8,000 level on Friday and since rebounded as other major cryptocurrencies were also trading higher over the course of the weekend.
On Monday the Chicago Fed National Activity Index (CFNAI) is set to be released. This week the United Kingdom is set to publish key economic data, with the CPI and PPI on Wednesday and the GDP on Friday.
The EUR/USD reached a new low for 2018 on Friday and continued to decline further in early trading on Monday. The Merchandise Trade level in Europe, as announced on Friday remained almost unchanged compared to the previous month at 21.2B Euro (previous 20.0B).
On one hand the signs for a possible continued trade cooperation between the US and China put the Dollar markets at ease. On the Euro side are still concerns about the implication of an EU critical government, with lavish spending plans being formed in Italy.
On Monday in the US the Chicago Fed National Activity Index (CFNAI) level is set to be released and the FOMC members Bostic, Harker and Kashkari are set to deliver their speeches.
Pivot: 1.179 Support: 1.172 1.17 1.166Resistance: 1.179 1.182 1.1855 Scenario 1: short positions below 1.1790 with targets at 1.1720 & 1.1700 in extension. Scenario 2: above 1.1790 look for further upside with 1.1820 & 1.1855 as targets. Comment: the RSI is mixed to bearish.
The Canadian Dollar (CAD) weakened against the Greenback on Friday as the published inflation data lagged behind expectations and reduced the prospect of the Bank of Canada raising interest rates this month. The Consumer Price Index (CPI) was at +2.2% y/y (expected +2.3%). On the other had Retail Sales data for March was more upbeat than expected at +0.6% m/m (expected +0.2%).
The Canadian Dollar remains under pressure as US officials did not match the optimism of Canada’s Prime Minister in striking a renewed North American Free Trade Agreement (NAFTA) deal.
On Tuesday in Canada Wholesale Sales numbers for March are set to be released.
Pivot: 1.285 Support: 1.285 1.279 1.275Resistance: 1.291 1.294 1.299 Scenario 1: long positions above 1.2850 with targets at 1.2910 & 1.2940 in extension. Scenario 2: below 1.2850 look for further downside with 1.2790 & 1.2750 as targets. Comment: the RSI lacks downward momentum.
WTI Oil
The US Baker Hughes Oil Rig Count published on Friday indicated that the amount of operating oil rigs in the United States remained unchanged at 844. This marks the end of 6 consecutive weeks with higher numbers of oil rigs in operation. Oil was trading higher in early trading on Monday as trade tensions between the US and China were easing.
On the supply side, production in crisis plagued Venezuela fell to 1.5 million barrels in the previous month, which is the lowest level seen in decades.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 71 Support: 71 70.65 70.25Resistance: 72.25 72.65 73.1 Scenario 1: long positions above 71.00 with targets at 72.25 & 72.65 in extension. Scenario 2: below 71.00 look for further downside with 70.65 & 70.25 as targets. Comment: the RSI advocates for further advance.
US 500
US stock indices closed lower on Friday as market participants still felt the uncertainty surrounding the trade talks of the US with Europe and China. Especially industrial stock (US Industrial ETF +0.67%) traded higher, while chip makers (US Semiconductors ETF -1.21%) and banks (US Banks ETF -0.86%) traded overall lower.
The Chinese search engine company Baidu (-9.67%) sharply declined as one of its key executives, Qi Lu announced a departure from the company due to family reasons. Lu, an expert in AI and was tasked with developing the company into other markets like self-driven cars, in order to keep up with rivals like Tencent and Alibaba (NYSE:BABA) (-0.62%).
The earnings season is slowing down but over the next weeks still some key earnings will come in, such as from Lowe’s and Target later this week.
Pivot: 2714 Support: 2714 2700.5 2692 Resistance: 2741.25 2751 2765 Scenario 1: long positions above 2714.00 with targets at 2741.25 & 2751.00 in extension. Scenario 2: below 2714.00 look for further downside with 2700.50 & 2692.00 as targets. Comment: the RSI is bullish and calls for further upside. The 20-period moving average crossed above the 50-period one.