On Thursday the US Dollar lost some of its gains after the Federal Reserve’s meeting on Wednesday. The US Dollar Index (USDX) which represents the Dollar against a weighted basket of major global currencies traded down by 0.28%.
Gold continued its decline after the announcements that made the market raise its expectations for another rate hike this year. Gold is now 4.8% down compared to its high two weeks ago.
Oil traded almost unchanged in expectation of possible statements from the OPEC meeting in Vienna including some non-OPEC members like Russia on Friday.
US equity indices were trading down on Thursday with the Dow Jones Industrial Average (US 30) trading down after rising for nine consecutive days before. Market participants were to some extent unsettled after Federal Reserve’s announcements on Wednesday. The biggest losses were in the Technology sector with the NASDAQ (US Tech 100) trading down by 0.54%. Among the losers of the day were Apple (NASDAQ:AAPL) with 1.71% down, Tesla (NASDAQ:TSLA) with 1.91% down and Snapchat losing 3.11%.
Cryptocurrencies traded down reversing some of the gains from the recovery earlier this week. Bitcoin was less affected than other cryptocurrencies with Litecoin losing as much as 10%.
Friday the markets will carefully watch the announcements from the OPEC meeting in Vienna as well as the speeches from three FOMC members. The European Union and Germany will release their PMI numbers on Friday. The United Kingdom releases its CBI Industrial Trends Survey and Canada publishes its Retail Sales and CPI statistics.
EUR/USD recovery on Thursday over 0.50% after plummeting the day before on the announcements by the Federal Reserve. This was despite positive business confidence numbers and lower jobless claims in the US.
In Europe the ECB announced that they are planning to replace the current interest rate benchmark EURIBOR by 2020 with a different instrument.
Friday the EU and Germany release their PMI numbers, no significant fundamental data from the US is announced for Friday.
Pivot: 1.189
Support: 1.189 1.186 1.1835
Resistance: 1.198 1.202 1.2045
Scenario 1: long positions above 1.1890 with targets at 1.1980 & 1.2020 in extension.
Scenario 2: below 1.1890 look for further downside with 1.1860 & 1.1835 as targets.
Comment: the RSI is supported by a rising trend line.
Gold (EUR)
Gold continued its decline and closed now significantly below the $1,300 mark on Thursday. Gold is now 4.8% down from its high two weeks ago.
Gold was under pressure as market participants are increasingly thinking that the Federal Reserve might increase the interest rate by end of this year following Wednesday’s meeting.
As Gold is to some extent correlated with the movements of the US rates and the Dollar traders will be looking at the general market sentiment to determine its future moves.
Pivot: 1302
Support: 1285 1277 1268
Resistance: 1302 1311 1316
Scenario 1: short positions below 1302.00 with targets at 1285.00 & 1277.00 in extension.
Scenario 2: above 1302.00 look for further upside with 1311.00 & 1316.00 as targets.
Comment: the RSI is mixed to bearish.
WTI Oil
Oil traded very slightly up on Thursday with unclear expectations towards the upcoming OPEC meeting.
After the hurricanes in the US oil recovered from this and last week and is in the direction of May’s high at around $52 for WTI Oil after clearing the June’s high this week.
This Friday OPEC and some non-OPEC countries are meeting to discuss future production cuts.
Pivot: 50.1
Support: 50.1 49.9 49.7
Resistance: 50.84 51.1 51.45
Scenario 1: long positions above 50.10 with targets at 50.84 & 51.10 in extension.
Scenario 2: below 50.10 look for further downside with 49.90 & 49.70 as targets.
Comment: the RSI broke above a bearish trend line.
US 500
US equity indices traded lower on Thursday with the Dow Jones Industrial Average breaking with its nine day run of consecutive increases.
Some market participants speculate that the increase possibility of a rate hike by the Federal Reserve scared off some investors, however losses remain significantly below 1%.
While the US Non-cyclical ETF showed with a decline by 1.01% one of the biggest falls of the day, US Banks ETF was up 0.35% and US Financials ETF up 0.24%.
This marks the fifth consecutive day of increases for both amidst a positive outlook for a rate hike this year.
Snapchat was down by 3.11% and closing lower every day of this week so far (week-to-date -9.7%) as data was published that its rival Instagram gets now only about 8% less new users than Snapchat in the US compared to a gap of 47% in January this Year.
On Friday speeches from three FOMC members will be broadcast and could shed further light onto the current monetary policy. Also Manufacturing and Services PMI figures are to be released.
Pivot: 2497
Support: 2497 2494 2490
Resistance: 2507.25 2510 2513
Scenario 1: long positions above 2497.00 with targets at 2507.25 & 2510.00 in extension.
Scenario 2: below 2497.00 look for further downside with 2494.00 & 2490.00 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.