Uncertainty surrounding the implementation of the business tax reform by the Trump administration pushed the US Dollar on Friday lower against a basket of major currencies, with the US Dollar Index (USDX) closing 0.15% lower.
The South African Rand was trading at its weakest level against the Dollar in one year as economists speculate that Moody's and S&P could be considering downgrading the country's sovereign debt rating to junk level due to out of control government spending.
Gold lost almost all its previous day's gains on Friday as a high volume of future contracts in a short period of time pushed the price down. Oil traded lower after the Baker Hughes Oil Rig Count in the US was up by 9.
US stocks were under pressure by the uncertainty surrounding the implication of the business tax reform. The graphic and AI chip maker nVidia closed 5.38% higher after surprising investors with even better earnings than expected.
Cryptocurrencies especially the Bitcoin saw immense volatility after it was announced that the fork Segwit2X would be called off. While Bitcoin experienced a rapid decline, its previous forks Bitcoin Cash and Bitcoin Gold surged up with the former reaching almost $2,800 on some exchanges from the only around $600 a week earlier. One of the main goals of the forks is to increase the ability for Bitcoin to be used as payment solution as the space on the current blockchain is very limited and transaction costs are a concern.
On Tuesday in the Asian Trading session Australia is publishing Retail Trade data, while China follows with Industrial Production and Retail Sales data. In Europe Germany, Italy and the United Kingdom will publish inflation data. Germany and the European Union are also set to publish GDP data. In the US the Redbook Store Sales data will show current consumer driven market sentiment.
The US Dollar [i] traded slightly lower on Friday as fears increased that the business tax reform, one of the key promises of US President Trump's campaign could be delayed by the Senate. The University of Michigan Consumer Sentiment level at 97.8 (expected 100.00 / previously 100.7) was below expectations.
While little fundamental data is expected on Monday on Tuesday we will see inflation, GDP and ZEW business survey from Germany, as well as GDP data from Italy and Industrial Production figures from the European Union.
Pivot: 1.163
Support: 1.163 1.161 1.158
Resistance: 1.169 1.172 1.175
Scenario 1: long positions above 1.1630 with targets at 1.1690 & 1.1720 in extension.
Scenario 2: below 1.1630 look for further downside with 1.1610 & 1.1580 as targets.
Comment: the RSI is bullish and calls for further upside.
Gold
Gold [i] significantly retraced on Friday losing almost all the week's gains. Market experts saw the trade of 40 million ounces on US futures exchanges in the time-frame of ten minutes as key driver behind the sudden move, not able to attribute it specifically to any fundamental economic data. Gold traders will continue watching at the conditions of the US economy, while paying attention to global events such as US President Trump's Asia trip and developments in Saudi-Arabia.
Pivot: 1282
Support: 1263.5 1266 1273
Resistance: 1282 1285 1289
Scenario 1: short positions below 1282.00 with targets at 1273.00 & 1266.00 in extension.
Scenario 2: above 1282.00 look for further upside with 1285.50 & 1289.00 as targets.
Comment: the RSI is mixed to bearish.
WTI Oil
Oil [i] settled lower on Friday as reports from the information company Baker Hughes indicated that the number of active oil rigs in the United States increased from 729 to 738. This rise in operating oil rigs is the highest since June.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 56.56
Support: 56.56 56.1 55.65
Resistance: 57.5 57.9 58.5
Scenario 1: long positions above 56.56 with targets at 57.50 & 57.90 in extension.
Scenario 2: below 56.56 look for further downside with 56.10 & 55.65 as targets.
Comment: the RSI is mixed to bullish.
US 500
US equity indices [i] closed slightly lower as markets were concerned about the uncertainty surrounding the proposed business tax reform by the Trump Administration, as the Republican Party did not seem to speak with one voice at that point.
Health care stocks were underperforming (US Healthcare ETF -0.72%), while non-cyclical stocks were up (US Non-cyclical ETF +0.97%). NVidia closed 5.38% higher as the microchip company's earnings, which were announced on Thursday after market close surpassed investors' expectations. As the earnings season is almost over only few blue-chip companies remain who are to publish their earning figures. Home Depot (NYSE:HD) is due to publish its earnings on Tuesday before market open, while Wal-Mart (NYSE:WMT) is due on Thursday.
Major economic data with inflation, sales and business conditions data is set to be released on Wednesday.
Pivot: 2573.5
Support: 2573.5 2569 2563
Resistance: 2585.5 2589.5 2595
Scenario 1: long positions above 2573.50 with targets at 2585.50 & 2589.50 in extension.
Scenario 2: below 2573.50 look for further downside with 2569.00 & 2563.00 as targets.
Comment: the RSI shows upside momentum.