The US Dollar was slightly stronger on Thursday with the US Dollar Index (USDX) which represents the US Dollar against a basket of major currencies closing 0.12% higher as the US House of Representatives Republicans voted in favour of the Trump Administration’s tax plan.
The South African Rand was one of the best performing currencies of the day, gaining over 1.5% against the US Dollar and returning to previous weeks level as retail sales data indicated a more resilient economy than expected.
Gold remained mostly unchanged as a stronger US Dollar and higher Treasury yields worked against the positive moves forward regarding the implementation of the tax reform. Brent crude oil settled lower as Turkey and Iraq are said to be conducting talks to resume the operation of the common pipeline from Northern Iraq.
US equities rebounded from the weak start at the beginning of the week and the NASDAQ (US Tech 100) reached a new all-time high. Best performing stocks were in Technology field, while Energy stocks lost due to the lower oil prices. Wal-Mart’s earnings exceeded expectations and the stock closed over 10% higher.
Bitcoin further recovered and for a short time traded over the previous record level of $7,900. Bitcoin recovered by over $2,000 from its low over the weekend as markets were concerned about the called off Segwit2X fork implementation which sought to improve its functionality for transactions.
On Friday Canada publishes inflation data and the US housing market data (Housing Starts).
EUR/USD traded slightly lower on Thursday as in the United States the House Republicans voted in favour of the proposed tax bill, while the Senate’s position remains not fully clear yet. Positive housing market and industrial production statistics further supported the Dollar while jobless figures and business condition survey results were worse than expected.
On Friday the European Central Bank president is scheduled to make a speech. From the United States we await Housing Starts and Permits statistics.
Pivot: 1.1805
Support: 1.1755 1.1725 1.17
Resistance: 1.1805 1.183 1.186
Scenario 1: short positions below 1.1805 with targets at 1.1755 & 1.1725 in extension.
Scenario 2: above 1.1805 look for further upside with 1.1830 & 1.1860 as targets.
Comment: the RSI is mixed to bearish.
Gold
Gold traded slightly lower on Thursday as the passing of the proposed tax reform in the US remains not fully certain while awaiting the position of Senate’s Republicans. The stronger Dollar and rising US Treasury yields further put pressure on the precious metal.
As the further development of the US economy could influence the price of gold which is mostly traded in US Dollar, gold traders will continue carefully observing the activities surrounding the proposed tax reform.
Pivot: 1275.5
Support: 1275.5 1274 1271
Resistance: 1283 1286.5 1288.5
Scenario 1: long positions above 1275.50 with targets at 1283.00 & 1286.50 in extension.
Scenario 2: below 1275.50 look for further downside with 1274.00 & 1271.00 as targets.
Comment: the RSI is supported by a rising trend line.
WTI Oil
WTI oil closed slightly higher on Thursday, while the Brent Crude closed lower as Turkey and Iraq are discussing resuming exports via the common Ceyhan pipeline. This increased pressure on the market after previously it was announced that the United States’ oil stockpiles were increasing and the Energy Information Administration (EIA) published at the beginning of the week a position that the United States could take a role as key oil producer within less than a decade.
On Friday the Baker Hughes oil rig count for the US will be released. Markets could also react to further communiques regarding a possible extension of OPEC production cuts beyond March 2018.
Pivot: 55.48
Support: 54.8 54.4 53.98
Resistance: 55.48 55.8 56.05
Scenario 1: short positions below 55.48 with targets at 54.80 & 54.40 in extension.
Scenario 2: above 55.48 look for further upside with 55.80 & 56.05 as targets.
Comment: the RSI broke below a rising trend line.
US 500
On Thursday US equity indices ended the losing streak and closed significantly higher, supported by the Republicans in the House of Representatives’ vote in favour of the Trump tax reform plan. The gains in NASDAQ (US Tech 100) were so significant that it reached a new all-time high on Thursday.
Biotech (US Biotech ETF +1.62%) and Technology (US Technology ETF +1.56%) stocks were the best performers of the day, while Energy (US Energy ETF (NYSE:XLE) -0.4%) were the weakest amidst lower oil prices.
Wal-Mart (NYSE:WMT) surged up and closed 10.76% after the released earnings exceeded expectations, while PayPal closed 6.25% higher after it was announced it would sell its $5.8 bn. worth US credit portfolio and increase the 4th quarter’s forecast.
On Friday Housing Starts and Permits statistics will be released.
Pivot: 2578.5
Support: 2578.5 2571.5 2565.75
Resistance: 2594.5 2600 2605
Scenario 1: long positions above 2578.50 with targets at 2594.50 & 2600.00 in extension.
Scenario 2: below 2578.50 look for further downside with 2571.50 & 2565.75 as targets.
Comment: the RSI is mixed with a bullish bias.