The US Dollar traded slightly weaker against a basket of major currencies, the US Dollar Index (USDX), which closed lower by 0.1%. The Turkish Lira (TRY) continued its decline to a new record low, which is attributed to concerns about monetary policy and inflation. The Russian Ruble (RUB) continued its decline at a slower pace than in the previous days. Russian equities and ETFs on the other hand traded higher, which is in part attributed to the rising oil prices amid these tensions.
Gold and oil both hit new long-term highs as the markets are extensively concerned about the developments in the middle-east surrounding the conflicts in Syria but also in Yemen, where Houthi rebels again launched possibly an Iran-made ballistic missile against Riyadh.
US equities settled mostly lower driven by political uncertainty but also possibly due to the Federal Reserve monetary policymakers hinting in the meeting minutes published on Wednesday, that the monetary tightening would increase.
Cryptocurrencies continued for the most part with their gradual recovery as the Bitcoin traded only slightly below the $7,000 level.
On Thursday the US will publish Import and Export Prices, Jobless New Claims and details to the Federal Reserve balance sheet. In the Asian trading session on Friday China will publish its Merchandise Trade level statistics.
The EUR/USD pushed higher for the third consecutive day this week, however the upside movement was relatively weak. The much awaited Consumer Price Index (CPI) from the US was around the expected level at -0.1% m/m (expected 0% m/m) and +2.4% y/y as expected. Meanwhile the Treasury Budget level deficit widened to $-208.7B (expected $-$186.0B). In Europe the Italian Retail Sales figures at +0.4% m/m were slightly better than the expected +0.3%.
On Thursday in France the CPI data will be released and in the European Union the Industrial Production (IP) figures.
Pivot:1.233Support:1.2331.23051.2285Resistance:1.2411.2441.246Scenario 1:long positions above 1.2330 with targets at 1.2410 & 1.2440 in extensionScenario 2:below 1.2330 look for further downside with 1.2305 & 1.2285 as targets.Comment:the RSI is mixed and calls for caution.
Gold
Gold spiked intraday to a new 20-months high as tensions between the United States and Russia are escalating over the alleged gas attack on civilians in Syria last week. While the US President Trump is pushing for a bombing of the war-torn country, Russia, which has multiple military bases in Syria, indicated that it would intercept such missiles. However later the price moved down as US Defense Secretary Mattis stated that the incident in Syria is still being studied and the key ally, the UK did not make any firm decision on how to handle the situation. In this situation of geopolitical escalation, the minutes from the last meeting of the Federal Reserve seemed to fade in comparison, even though the minutes indicated that the FOMC members were inclined towards a slightly faster pace of monetary policy tightening.
In the US on Thursday Import/Export Prices, Jobless New Claims, M2 Money Supply and Federal Reserve Bank Total Assets/Credit are due to be released.
Pivot:1342Support:13421337.751333.5Resistance:13591365.51376Scenario 1:long positions above 1342.00 with targets at 1359.00 & 1365.50 in extension.Scenario 2:below 1342.00 look for further downside with 1337.75 & 1333.50 as targets.Comment:the RSI is mixed to bullish.
WTI Oil
Oil soared higher with the WTI crude hitting a new high, last seen in 2015. However prices declined slightly from the intraday high as Energy Information Administration (EIA) Crude Oil Inventories data showed 3.3 million barrels more in storage, which is consistent with the API reporting on Tuesday also higher stockpiles. However the major focus was the escalation between the United States and Russia regarding a military strike on Syria. Another significant conflict in the oil-rich Middle-East is the conflict between Saudi-Arabia and the Iran backed Houthi rebels in Yemen, where Saudi-Arabia intercepted a ballistic missile from that region.
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:65.2Support:65.264.3563.7Resistance:67.868.3569.8Scenario 1:long positions above 65.20 with targets at 67.80 & 68.35 in extension.Scenario 2:below 65.20 look for further downside with 64.35 & 63.70 as targets.Comment:the RSI advocates for further advance.
US 500
Most US equity indices, such as the US 500 (-0.45%) traded lower over concerns due to the military threat against Russia, but possibly also as the FOMC meeting minutes indicated, that a majority of participants favor a slightly faster monetary tightening. Especially financial companies’ (US Financials ETF -1.05%) stocks were trading lower. Airline stocks continued to fall on rising oil prices with American Airlines (-3.85%) and United Continental (-3.94%) both settling lower.
Among other companies, on Thursday Delta Air Lines (NYSE:DAL) (-1.76%) 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: 2672 2685 2700 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: the RSI advocates for further upside.