The Dollar traded on Wednesday overall lower compared to other major currencies, with the US Dollar Index (USDX) closing down by 0.31%, over the strong Pound and Euro, following advances in the Brexit negotiations talks.
Oil extended the declines from the previous day over concerns of the global economic impact about the trade dispute between the US and China and significant drop in emerging markets. With the weaker Dollar, gold was able to make up some of this week’s losses early on Thursday.
Equities faced further declines across the board, which extended into the Asian-Pacific trading session on Thursday with investor confidence impacted by concerns over a possible global economic slowdown.
Bitcoin and other cryptocurrencies had one of the worst trading days in months, with many cryptocurrencies, such as Ethereum or EOS shedding more than 20 percent within just 24 hours. The sell-off was at least in part blamed on reports, that investment bank Goldman Sachs (NYSE:GS) is backing off its intentions to open a cryptocurrency trading desk.
On Thursday key economic data is expected from the US with the publication of the Challenger Job-Cut Report, the ADP Employment Report, Nonfarm Productivity, Unit Labor Costs, Jobless New Claims, Factory Orders, the ISM Non-Manufacturing Index and monetary statistics from the Federal Reserve Bank.
Unexpected progress in the Brexit negotiations helped the Pound and Euro to gain against the Dollar on Wednesday. Data from Europe was mixed with Retail Sales declining more than expected at -0.2% m/m in July (expected -0.1%), while the PMI Composite was higher than anticipated at 54.5 (expected 54.4).
On the US side the Redbook Store Sales were at 6.5% (compared to 5.1% last week) and the Trade Balance deficit was reported marginally below expectation at $50.1 bn. (expected $50.2 bn.).
The German Manufacturers’ Orders statistic for July, which was released on Thursday morning, showed however worse numbers than anticipated at -0.9% m/m for July.
In the US key job market data, such as the ADP Employment Report and the Unit Labor costs statistics will be released.
Pivot:1.1615Support:1.16151.15951.157Resistance:1.1661.16751.169Scenario 1:long positions above 1.1615 with targets at 1.1660 & 1.1675 in extension.Scenario 2:below 1.1615 look for further downside with 1.1595 & 1.1570 as targets.Comment:the RSI shows upside momentum.
The Canadian Dollar again declined and is now on track for the sixth consecutive day of losses against the Dollar, after the Bank of Canada left interest rates unchanged at 1.5%, despite unexpectedly good economic results, as its monitors the trade negotiations with the US closely. As the central bank admitted that the conditions were right for further rate hikes, many analysts expect such an announcement at the next session in October.
Investors are focusing on the NAFTA trade talks between the US and Canada, after US president Trump’s team previously reached an agreement with Mexico, raising the pressure on Canada to concede in the trade talks.
On Thursday in Canada data on Building Permits will be released. Then on Friday Unemployment Rate and Ivey PMI data for August is expected.
Pivot:1.315Support:1.3151.31151.3085Resistance:1.32051.3251.328Scenario 1:long positions above 1.3150 with targets at 1.3205 & 1.3250 in extension.Scenario 2:below 1.3150 look for further downside with 1.3115 & 1.3085 as targets.Comment:the RSI shows upside momentum.
WTI Oil
Concerns about the fallout from a possible escalation on trade between the US and China and possibly other countries which the US president Trump accused of unfair trading practices against the US pressured the oil market, especially the WTI benchmark from the US.
This comes despite reports from the American Petroleum Institute (API) that crude oil stockpiles fell by 1.2 million barrels over the previous week and a statement from OPEC’s Secretary General, that according to their estimation the global demand for oil will reach 100 million barrels per day later this year, so much sooner than previously expected.
On Thursday that Energy Information Administration (EIA) is set to release its data on crude oil, gasoline and distillate stockpiles.
Pivot:69.1Support:68.267.867.45Resistance:69.169.670Scenario 1:short positions below 69.10 with targets at 68.20 & 67.80 in extension.Scenario 2:above 69.10 look for further upside with 69.60 & 70.00 as targets.Comment:the RSI advocates for further downside. The prices are capped by the 20-period moving average.
US Tech 100
Worries over the negative developments in the emerging markets and US introducing tariffs and then facing tariffs on its own products could have been a key factor pushing equity indices lower. Especially the technology index NASDAQ (US Tech 100) traded lower, having its worst trading day in more than a month.
Besides tech stocks, consumer discretionary values (US Cyclicals -1.06%) were some of the worst performing stocks on Wednesday.
Social media companies’ stocks traded overall lower with Facebook (NASDAQ:FB) -2.30% and Twitter closing -5.98% lower. Twitter shares fell after its CEO Jack Dorsey testified before the US Senate. He went on to rebuke president Trump’s accusations that Twitter acted not impartial in handling conservatives’ accounts.
Snapchat (-4.54%) hit meanwhile a new all-time low, staying barely above the $10 threshold despite the company trying to adjust by now offering new features.
Some few companies are still due to release their quarterly earnings, such as Broadcom (NASDAQ:AVGO) on Thursday and companies such as Adobe (NASDAQ:ADBE) and Micron the week after next week.
Pivot: 7566 Support: 7476 7450 7420 Resistance: 7566 7600 7650.5 Scenario 1: short positions below 7566.00 with targets at 7476.00 & 7450.00 in extension. Scenario 2: above 7566.00 look for further upside with 7600.00 & 7650.50 as targets Comment: the RSI is capped by a bearish trend line.