The US Dollar further extended its gains against other major currencies, with the US Dollar Index (USDX) closing 0.21% higher on Monday. Meanwhile the Turkish Lira (TRY) at its peak lost more than 6% against the Dollar during trading on Monday, reaching a new all-time low. The United States were said to be reviewing Turkey’s duty free access to the US, which could affect $1.7 bn. worth of Turkish exports.
Oil traded higher over concerns what the imposed sanctions against Iran would do to global supplies, while demand remains high. US equity indices closed overall higher, supported by strong earnings numbers.
Cryptocurrencies further retreated on Monday, however Bitcoin managed to recover moderately on Tuesday morning, rising again above the $7,000 level. Reports that investment bank Goldman Sachs (NYSE:GS) was considering getting into cryptocurrencies to hold bitcoin and other tokens on behalf of funds could have slowed down the sell-off.
On Tuesday in Germany the Industrial Production and Merchandise Trade statistic will be released. In the United Kingdom the Halifax House Price Index is expected, while in the US data on Consumer Credit and the Redbook Store Sales will be published. In Canada the Ivey Purchasing Managers’ Index will be released.
GBP/USDThe US Dollar further extended its gains against the Pound, with the GBP/USD trading at a new 11-months low. The Pound is under pressure as the UK is said to be preparing for a so-called ‘No Deal’ Brexit from the European Union. Should the UK actually find no deal for the exit from the European Union by the end of March 2019, that would leave it without any agreement on customs, trade and regulations. This sentiment was reiterated by statements from Trade Secretary Liam Fox, who mentioned that a ‘no deal’ Brexit was the most likely scenario at this point.
On Tuesday in the UK the Halifax House Price Index statistic will be published. Then on Friday Industrial Production, Merchandise Trade and Gross Domestic Product (GDP) data is expected.
Pivot: 1.292 Support: 1.292 1.289 1.286Resistance: 1.3005 1.304 1.3065 Scenario 1: long positions above 1.2920 with targets at 1.3005 & 1.3040 in extension. Scenario 2: below 1.2920 look for further downside with 1.2890 & 1.2860 as targets. Comment: the RSI shows upside momentum.
The Australian Dollar traded sharply up after the interest rate announcement from the Reserve Bank of Australia (RBA). It was no surprise that the central bank left the rate unchanged at its low level of 1.5%. The central bank lowered the near-term forecast on inflation and also reduced its unemployment forecast from 5.25% to 5%. The central bank was also reported to be optimistic about the housing and mortgage market.
On Wednesday data on Home Loans for June will be released and the RBA Policy Statement is expected for Friday. Next week in Australia data on employment, wages and business confidence will be released.
Pivot: 0.7375 Support: 0.7375 0.736 0.7345Resistance: 0.741 0.7425 0.744 Scenario 1: long positions above 0.7375 with targets at 0.7410 & 0.7425 in extension. Scenario 2: below 0.7375 look for further downside with 0.7360 & 0.7345 as targets. Comment: the RSI shows upside momentum.
Oil started the week stronger, continuing to gain ground in early trading on Tuesday. The announcement that the United States are seeking to again impose sanctions on Iran, has analysts concerned about the shortfall of Iranian crude oil being made available to the global markets.
Analysts from Goldman Sachs also voiced concerns over continued strong demand for oil, also due to the weakening production in crisis hit Venezuela and the unpredictability of the situation in Libya.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 68.82 Support: 68.82 68.25 67.75Resistance: 69.9 70.45 70.8 Scenario 1: long positions above 68.82 with targets at 69.90 & 70.45 in extension. Scenario 2: below 68.82 look for further downside with 68.25 & 67.75 as targets. Comment: the RSI advocates for further upside.
US equity indices closed higher over optimism in the ongoing earning season. Berkshire Hathaway (NYSE:BRKa) (+3.10%) closed higher, after the company exceeded investors’ expectations with their Q2 earnings. As the company holds around 5% of all Apple (NASDAQ:AAPL) (+0.60%) shares, it benefited from the recent rise in Apple’s stock prices, as Apple reached the 1 trillion Dollar market capitalization as the first company in the US.
Facebook (NASDAQ:FB) (+4.52%) continued its recovery after the post-earnings slump. Facebook was reported to be in talks with banks to share customers’ data, so it may offer possibly financial services to its users. Facebook’s Chinese rival Tencent already offers a wide range of financial services on its WeChat social network.
Intel (NASDAQ:INTC) (+0.02%) recovered from its intraday decline, after Barclays (LON:BARC) lowered its rating for Intel citing concerns how its next generation chips will perform against those from competitor AMD (+5.09%).
The earnings season continues with companies due to release their earnings, such as Snap(chat) on Tuesday and the Delphi, CVS Health (NYSE:CVS) on Wednesday.
Pivot: 2842 Support: 2842 2835.5 2825 Resistance: 2860.25 2866 2878.75 Scenario 1: long positions above 2842.00 with targets at 2860.25 & 2866.00 in extension. Scenario 2: below 2842.00 look for further downside with 2835.50 & 2825.00 as targets. Comment: the RSI is bullish and calls for further advance. The rising 50-period moving average is acting as support.