The US Dollar reached a new high for this year against other major currencies in the US Dollar Index (USDX), but closed lower later on Monday with the USDX falling by 0.17%. Amid this consolidation most emerging market currencies also traded stronger against the greenback, while the Turkish Lira (TRY) still faces significant pressure. Turkish sovereign debt now pays a significant premium, which as analysts point out is higher than other similar rated countries.
With the Dollar retracing from its recent high and US Treasury Note Yields lower on Monday, gold was able to climb from its low. Oil continued to climb as the US are intending to put the ‘strongest sanctions in history’ against Iran, a move which some analysts fear could reduce the amount of oil sold by Iran to the global markets.
US equity indices traded higher spurred by some progress in the trade talks between the US and China. Especially chip maker Micron (+4.11%) traded higher, while Boeing (NYSE:BA) (+3.38%) was supported by rumors that it could be a key part of the Chinese commitment to reduce the trade balance deficit with the US.
Cryptocurrencies broadly declined on Monday and early Tuesday trading, with Ethereum falling again below the $700 level and Bitcoin bouncing off a resistance around $8,500. The US Commodity Futures Trading Commission is set to publish a guidance for exchanges to consider, when listing derivatives based on digital assets. Last year the CME and CBOE exchanges started the trading of Bitcoin future contracts.
On Tuesday in the US the Redbook Store Sales and Richmond Fed Manufacturing Index level data is set to be released.
After a week of continuously falling EUR/USD rates, the Euro gained against the greenback this Monday. However the situation remains tense as Italy is about to form a populist EU-critical government in the coming days with concerns about its policy towards the bloc and also political promises needing a significant amount of money. Together with Greece and Portugal, Italy has one of the highest debt-GDP ratios in the European Union at above 130%.
For investors the release of the minutes of the FOMC meeting due on Wednesday and from the ECB on Thursday could be of significant interest.
Pivot:1.176Support:1.1761.1741.1715Resistance:1.17951.1821.1855Scenario 1:long positions above 1.1760 with targets at 1.1795 & 1.1820 in extension.Scenario 2:below 1.1760 look for further downside with 1.1740 & 1.1715 as targets.Comment:the RSI is mixed to bullish.
On Monday the GBP/USD fell for the first time in 2018 below the level of 1.34. Despite the Dollar easing off its recent high, the Pound remained under pressure after Scottish Prime Minister Sturgeon announced that she will restart the debate on a Scottish independence amid the Brexit talks.
On Tuesday in the United Kingdom the CBI Industrial Trends Survey level is due to be published. Then on Wednesday data on Consumer Price Index (CPI), Producer Price Index and CBI Distributive Trades is due to be published.
Pivot:1.3455Support:1.3391.3351.3315Resistance:1.34551.34851.352Scenario 1:short @ 1.3415 with targets @ 1.3390 & 1.3350 in extension.Scenario 2:above 1.3455 look for further upside with 1.3485 & 1.3520 as targets.Comment:the RSI is mixed to bearish.
WTI Oil
Oil gained on Monday on supply worries over the situation in Iran and Venezuela. The US published a catalog of demands for Iran and vowed to implement the ‘strongest sanctions in history’ against the rogue regime in the Middle East, which currently contributes to around 4 percent to the global oil supplies. As Venezuela already struggles with oil output at a record low, some analysts predict that the US could put further sanctions against Venezuela, following the election victory of President Maduro.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:71.75Support:71.7571.4571.1Resistance:72.6373.2573.8Scenario 1:long positions above 71.75 with targets at 72.65 & 73.25 in extension.Scenario 2:below 71.75 look for further downside with 71.45 & 71.10 as targets.Comment:the RSI advocates for further advance. The price is seeking support from the ascending 20-period moving average.
US 500
US equity indices traded higher on Monday as trade talk tensions between the superpowers USA and China seemed to be easing with both sides appearing to be ready to make some concessions.
Especially industrial (US Industrial ETF +1.39%) and chip makers’ stocks (US Semiconductors ETF +1.28%) traded stronger.
Micron (+4.11%) shares were up in after-hours trading as the company raised its quarterly revenue and profit forecast and announced a $10B program to repurchase its shares. Chinese search engine giant Baidu (-4.98%) traded again significantly lower, as the departure of a key executive puts doubts on whether the company will be able to stay on track with its AI and other program research and development goals.
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 in this week.
Pivot: 2724 Support: 2724 2714 2700.5 Resistance: 2741.25 2751 2765 Scenario 1: long positions above 2724.00 with targets at 2741.25 & 2751.00 in extension. Scenario 2: below 2724.00 look for further downside with 2714.00 & 2700.50 as targets. Comment: the RSI is mixed with a bullish bias.