The US Dollar traded almost unchanged with small upside against a basket of global currencies on Monday with the US Dollar Index (USDX) closing 0.12% higher. The Russian Ruble was 0.63% down against the US Dollar as the GDP increased only by 1.8% according to recent data, while the Economy Ministry expected a growth of 2.2%. The Turkish lira gained ca. 0.5% against the Dollar as the Turkish Central Bank announced measures to help domestic companies to cope with the weakening currency in global trade.
Gold was up on Monday due to continued uncertainty surrounding the business tax proposal and the situation in Saudi-Arabia. Oil was slightly down after the EIA predicted a rise in US shale oil production in the coming month, while tensions in the Middle East stopped the price from falling significantly.
US equity indices traded slightly lower on Monday with biotech companies being the worst performer of the day, while Banks were by far outperforming other sectors.
Cryptocurrencies seemed to be mostly recovering from a weekend of high volatility as the Bitcoin stabilized around the range of $6,400 to $6,600 on Monday afternoon. The calling off of Segwit2X fork, which was initially planned for this week added contributed to the volatility. While the creation of another fork after Bitcoin Cash and Bitcoin Gold with not fully clear perspective was averted, the lack of adaptation raises fears that due to the limited blockchain size and rising transaction costs Bitcoin could become less relevant as a payment solution.
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.
EUR/USDThe EUR/USD remained mostly in the same range as on Friday as there was little in terms of news and fundamental data in the US and the Euro zone. The EUR/USD sharply decreased after policy statements from the European Central Bank in the last week of October so markets will be curious to hear what central banks chiefs from the ECB, Federal Reserve, Bank of England and Bank of Japan will say at the panel discussion in Frankfurt on Tuesday.
Further 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: 1.1635
Support: 1.1635 1.161 1.158
Resistance: 1.168 1.17 1.172
Scenario 1: long positions above 1.1635 with targets at 1.1680 & 1.1700 in extension.
Scenario 2: below 1.1635 look for further downside with 1.1610 & 1.1580 as targets.
Comment: the RSI is mixed to bullish.
Gold moved slightly higher on Monday due to uncertainty about the implementation of the business tax proposal from the Trump administration. This rise comes amidst rising US Treasury yields, meaning that despite higher returns from Treasuries some investors preferred gold as a safe haven. While trading higher, gold still did not manage to make up Friday’s losses after an unknown party traded 40 million ounces of gold futures in the time-frame of ten minutes.
Gold traders will continue cautiously watching the global political environment, while awaiting US inflation data due on Wednesday.
Pivot: 1282
Support: 1273 1270 1266
Resistance: 1282 1285.5 1289
Scenario 1: short positions below 1282.00 with targets at 1273.00 & 1270.00 in extension.
Scenario 2: above 1282.00 look for further upside with 1285.50 & 1289.00 as targets.
Comment: the RSI is capped by a bearish trend line.
Oil closed lower as markets expect higher output from the United States among others from its shale oil production. The Energy Information Administration (EIA) released a report which indicates that US shale oil production could increase by 80 thousand barrels per day in December. However significant down-movement was limited by the fragile situation in the Middle East surrounding Saudi-Arabia and its enemies.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 57.15
Support: 56.4 56.1 55.75
Resistance: 57.15 57.5 57.9
Scenario 1: short positions below 57.15 with targets at 56.40 & 56.10 in extension.
Scenario 2: above 57.15 look for further upside with 57.50 & 57.90 as targets.
Comment: the RSI is capped by a declining trend line.
US equity indices closed lower as uncertainty surrounding the tax reform and the situation in Saudi-Arabia concerned the markets. Banks were the winners of the day with the US Banks ETF closing 1.35% higher, whereas biotech companies were the worst performers of the day (US Biotech ETF -0.73%)
General Electric (NYSE:GE) had a further setback and lost 7.16% at market close, as the markets were not overly happy about the changes the new CEO John Flannery announced, among others to significantly cut dividends. Tesla (NASDAQ:TSLA) on the other hand gained 4.2% ahead of the planned unveiling of its new commercial truck on Thursday.
On Tuesday Home Depot (NYSE:HD) is set to announce its earning numbers. Major economic data with inflation, sales and business conditions data is set to be released on Wednesday.
Pivot: 2577
Support: 2577 2570 2566
Resistance: 2589.5 2594.5 2600
Scenario 1: long positions above 2577.00 with targets at 2589.50 & 2594.50 in extension.
Scenario 2: below 2577.00 look for further downside with 2570.00 & 2566.00 as targets.
Comment: the RSI advocates for further upside.