The US Dollar was again overall trading lower against other major currencies, with the US Dollar Index (USDX) trading at its lowest point since July. Some analysts see the Chinese countermeasures, following the announcement that the United States would seek to impose tariffs on $200 bn. worth of Chinese exports to the US possibly affecting the Dollar.
Despite the recent announcement of the central bank to raise interest rates, the Turkish Lira again extended its losses against hard currencies like the Dollar, after Turkish president Erdogan once again frightened investors after demanding that the stake in the Isbank, which is the largest bank in Turkey, belonging to the opposition party ‘CHP’ should be transferred to the Treasury.
Gold traded modestly higher, following the decline in Dollar value, while WTI oil traded again under $70, after data from the API indicated crude oil stockpiles up by 1.25 million barrels.
Cryptocurrencies mostly traded higher by a small margin, while Ripple managed to gain over 15% within 24 hours after it was revealed that in a test run, 12 previously not interconnected banks in different regions successfully settled transactions in Ripple tokens.
On Wednesday in the United Kingdom inflation data will be released and in the US data on new Housing Starts and Permits. In emerging market economies today South Africa releases its CPI data, Russia its GDP, Unemployment Rate and Retail Sales statistic and in Brazil the central bank is due to announce its interest rate decision.
After reaching a new 2-weeks high, the EUR/USD traded with very limited upside on Wednesday morning. Analysts see the Dollar now also facing pressure over the extended trade conflict with China, as the Chinese side starts to announce its countermeasures.
Meanwhile Eurostat reported the highest job vacancy rate for the Euro area since 2004, with Belgium, Netherlands and Germany showing the highest percentage in this statistic. Due to the still strong economy companies find it increasingly difficult to fill open positions.
On Wednesday the European Central Bank (ECB) will publish its Current Account level statistic and later towards the afternoon a speech by ECB President Draghi is expected.
Pivot:1.1655Support:1.16551.16351.162Resistance:1.17051.17251.175Scenario 1:long positions above 1.1655 with targets at 1.1705 & 1.1725 in extension.Scenario 2:below 1.1655 look for further downside with 1.1635 & 1.1620 as targets.Comment:the RSI broke above a declining trend line.
The Pound further extended gains against the Dollar over positive sentiment that a Brexit agreement with the European Union is still within reach. It was reported that the EU negotiators are reducing their demands regarding the handling of the border between the Republic of Ireland and Northern Ireland.
Meanwhile the European Council President Donald Tusk mentioned that the EU will consider a special Brexit summit in November, while also warning that a no-deal scenario would still be possible.
On Wednesday in the United Kingdom Consumer Price Index (CPI), Producer Price Index (PPI) as well as House Price Index data is expected to be released.
Pivot:1.313Support:1.3131.311.3075Resistance:1.31751.31951.322Scenario 1:long positions above 1.3130 with targets at 1.3175 & 1.3195 in extension.Scenario 2:below 1.3130 look for further downside with 1.3100 & 1.3075 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
WTI Oil
Oil prices recovered from the recent slump as WTI Oil contracts traded above $70 on Tuesday, undeterred by the intensifying trade standoff between the US and China. A statement from Saudi Arabia that it would be content if the Brent oil benchmark rises above $80, helped possibly move the market prices higher. The data from the American Petroleum Institute (API), showing crude oil stockpiles up by 1.25 million barrels then brought prices slightly down in the evening.
On Wednesday the Energy Information Agency (EIA) will release its statistics regarding crude oil, gasoline and distillate stockpiles. On Sunday ministers from OPEC countries are due to meet to discuss their production and compliance policies.
Pivot:69.35Support:69.3568.8568.55Resistance:70.470.971.25Scenario 1:long positions above 69.35 with targets at 70.40 & 70.90 in extension.Scenario 2:below 69.35 look for further downside with 68.85 & 68.55 as targets.Comment:the RSI is supported by a rising trend line. The prices are trading around 20-period moving average.
US 500
Despite the intensifying trade conflict with China, US equity indices overall closed higher on Tuesday with especially consumer discretionary (US Cyclicals ETF +1.36%) and biotech stocks (US Biotech +1.29%) trading higher.
Tesla (NASDAQ:TSLA) (-3.44%) came again under pressure after it was reported that the US Securities and Exchange Commission (SEC) is launching a criminal investigation into the Tweet of CEO Elon Musk, that he would take the company private with secured funding, which he later on retracted. Tesla’s rival Lucid Motors meanwhile actually secured funding from the Saudi Arabian sovereign wealth fund with over a $1 billion commitment announced on Monday.
Micron (+4.11%) closed higher ahead of the quarterly earnings release on Thursday after markets close despite two key brokers reducing their price target and analysts seeing more supply in the memory chip market, which could affect the sales prices.
On Wednesday in the US data on Housing Starts and Permits, the Current Account deficit level, as well as data from the Mortgage Bankers’ Association will be released.
Pivot: 2905 Support: 2905 2900.5 2896 Resistance: 2917.75 2921.75 2931.25 Scenario 1: long positions above 2905.00 with targets at 2917.75 & 2921.75 in extension. Scenario 2: below 2905.00 look for further downside with 2900.50 & 2896.00 as targets. Comment: the RSI is mixed to bullish. The rising 50-period moving average is acting as support now.