The Dollar closed lower against other major currencies with the US Dollar Index (USDX), which is a basket of six major currencies against the Greenback, closed approximately 0.38% lower. However emerging market currencies traded weaker against the Dollar, with the South African Rand (ZAR) hitting an 8-week low. The reported net foreign reserves in March in South Africa increased to $43.384B from $43.272B in February.
The Russian Ruble hit an 8-month low against the Dollar, after the United States passed additional sanctions especially targeting the ‘oligarchs’ and some of the country’s officials, as the US claim, that they benefit from the alleged misconduct of the Russian government, such as involvement in the US Presidential elections in 2016. Russian stocks were losing even more on Monday as the RTX stock index plunged to a 4-month low.
Gold traded nearly unchanged with on the one hand the Dollar experiencing a weakness but on the other US Treasury Yields trading higher. It is generally assumed that a weaker Dollar raises the Dollar-Gold price, while higher US yields put it under pressure.
US equity indices recovered from the losses seen on Friday and especially technology companies were seen with solid gains in the trading session on Monday.
Prices of Bitcoin and other major cryptocurrencies fell on Tuesday, while a report by Bank of America (NYSE:BAC) gathered some attention as it called crypto the greatest bubble in history.
Bitcoin was trading down 5.2% 02:30GMT at the Bitfinex exchange. Ethereum, the world’s second largest cryptocurrency by market cap, was down 3.1% while Ripple fell 4.4% on the Poloniex exchange.
On Tuesday in Canada the Housing Starts data will be released. In the Asian trading session on Wednesday Japan publishes its Capital Goods Price Index (PPI) and China its Consumer Price Index (CPI) and Producer Price Index (PPI) statistics.
The Dollar traded somewhat lower on Monday as trade continues to be a concern for the US economy. The US President Trump sends mixed messages in his speeches and to his Twitter followers. While he claimed earlier that China would take down trade barriers, on Monday he doubled-down on allegations of an unfair trade relationships, citing high Chinese tariffs on US cars. The lower than expected German Trade Balance surplus at only $19.2B for February seemed not to concern market participants as much.
On Tuesday Italy and France will publish their Industrial Production (IP) figures. The markets are eagerly awaiting the Consumer Price Index (CPI) data from France on Thursday and Germany on Friday.
Pivot:1.2285Support:1.22851.22651.2245Resistance:1.2381.23551.2335Scenario 1:long positions above 1.2285 with targets at 1.2335 & 1.2355 in extension.Scenario 2:below 1.2285 look for further downside with 1.2265 & 1.2245 as targets.Comment:the RSI is mixed to bullish.
The British Pound (GBP) continued its rise on Monday, breaking the 1.41 level for the GBP/USD for the first time in April. Besides the Dollar weakness, the Pound was supported by expectations that the Bank of England (BoE) would possibly raise interest rates in May. The Halifax House Price Index (HPI) was significantly better than expected at +1.5% m/m (expected +0.1%).
On Tuesday in the United Kingdom the Retail Sales figures are due to be published. On Wednesday even more data is expected with the Industrial Production (IP), Manufacturing Output and Merchandise Trade statistics.
Pivot:1.41Support:1.411.40751.405Resistance:1.41651.4191.422Scenario 1:long positions above 1.4100 with targets at 1.4165 & 1.4190 in extension.Scenario 2:below 1.4100 look for further downside with 1.4075 & 1.4050 as targets.Comment:even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
WTI Oil
Oil recovered mostly from the losses seen on Friday, where the Baker Hughes Oil Rig Count indicated 808 operating oil rigs – the highest number since 2015. The development in the trade dispute of the US against China and the expected impact on the global economy could well move markets in the days and weeks to come. US sanctions targeting Russian entities could have among others, impact the ability of Russians to acquire foreign technology for energy explorations.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday. On Thursday the OPEC is set to publish its oil market report. Then on Friday the International Energy Agency (IEA) will release its Oil Market Report.
Pivot:63.2Support:63.262.862.4Resistance:65.464.964.1Scenario 1:long positions above 63.20 with targets at 64.10 & 64.90 in extension.Scenario 2:below 63.20 look for further downside with 62.80 & 62.40 as targets.Comment:the RSI shows upside momentum.
US 500
US equity indices recovered from the selloff seen on Friday. Especially US Biotech ETF was performing stronger. Shares of the pharmaceutical company Merck (NYSE:MRK) were significantly up following announcements that late-stage trials of its ‘Keytruda’ drug for lung cancer patients showed promise.
On Tuesday in the US the NFIB Small Business Optimism Index, Redbook Store Sales and Wholesale Trade data is due for publication. Then on Wednesday the focus will be on the released CPI figures.
Among other companies, on Thursday Delta Air Lines (NYSE:DAL) and on Friday JP Morgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are set to publish their quarterly earnings. More earnings are due the following week.
Pivot: 2612 Support: 2612 2584 2560 Resistance: 2700 2685 2672 Scenario 1: long positions above 2612.00 with targets at 2672.00 & 2685.00 in extension. Scenario 2: below 2612.00 look for further downside with 2584.00 & 2560.00 as targets. Comment: a support base at 2612.00 has formed and has allowed for a temporary stabilisation. The RSI remains supported by its rising trend line.