After reaching a new 13-months high on Wednesday, the US Dollar Index (USDX), which measures the strength of the Dollar against six other major currencies, started to decline. The embattled Turkish Lira continues to recover from its record low above 7 USD/TRY. Germany signaled that it is not interested in allowing the country to descend into chaos, while Qatar approved investments worth $15 bn. into the Turkish economy.
Cryptocurrencies such as Litecoin and Ethereum, which are facing significant pressure initially showed signs of a strong recovery on Wednesday, but then traded at the end of the day still at almost unchanged low levels. Bitcoin was more successful in its recovery, trading firmly above the $6,000 mark. This brings the so-called Bitcoin dominance to the highest level so far for this year. Bitcoin dominance is defined in by the Bitcoin’s market capitalization is compared to other cryptocurrencies.
On Thursday in the EU data on Merchandise Trade will be released. The UK will publish its Retail Sales statistics. In Canada Manufacturing Sales numbers are due. In the US the Philadelphia Fed General Business Conditions level, Housing Starts and Permits, as well as Jobless New Claims and data from the Federal Reserve Bank regarding M2 Monetary Supply, the bank’s total assets and credit will be released.
While the pressure on the Turkish Lira eased up, whose instability shook other emerging markets like the South African, the Rand (ZAR) faced further declines. Multiple factors were blamed for the decline. On one hand the rating agency Moody’s made a negative outlook over the economy, which is the last of the three major rating agencies not valuing South African bonds at ‘junk’ level. The plunge in commodity prices further increased the pressure with platinum prices falling by 4.5% and palladium prices by 6.8%. South Africa is one of the biggest producers worldwide of these and other precious metals.
Early on Thursday however the Rand showed signs of improvement, as commodity prices were also up.
Next week on Wednesday in South Africa Consumer Price Index (CPI) data will be released.
Pivot:14.628Support:14.18914.08913.988Resistance:14.62814.79714.898Scenario 1:the downside prevails as long as 14.6280 is resistance.Scenario 2:the upside breakout of 14.6280, would call for 14.7970 and 14.8980.Comment:the RSI is below its neutrality area at 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the pair stands below its 20 and 50 MAs (respectively at 14.5639 and 14.5206).
Gold
Gold reached a new 17 months low in early trading on Thursday, before rebounding to the low levels seen on Wednesday. Other precious and industrial metals, such as copper were also under pressure. One reason for the decline given by analysts is the persistent Dollar strength. Overall the market participants seem worried about a possible knock-on effect to the global economy due to weakness in emerging markets, in particular Turkey, while the still unresolved trade tensions from the US Trump administration add worries about a possible global economic slowdown and thus reduced industrial demand for metals.
One key figure about the gold market is the report by the Commodity Futures Trading Commission (CFTC), which releases on Fridays the Commitments of Traders (COT) report regarding futures traded at regulated exchanges. Last Friday the figure was again lower, now at only 12,700 net speculative positions, compared to 81,400 net speculative positions a month earlier.
Pivot:1174Support:117411671162Resistance:119011961202Scenario 1:long @ 1182.40 with targets @ 1190.00 & 1196.00 in extension.Scenario 2:below 1174.00 look for further downside with 1167.00 & 1162.00 as targets.Comment:the RSI calls for a rebound.
WTI Oil
Oil extended its losses on Wednesday as data from the Energy Information Agency (EIA) showed an increase of 6.8 million barrels in storage, surpassing the statistics from the American Petroleum Institute (API), which indicated 3.7 million barrels more in storage on Tuesday.
While the fallout from the trade tensions especially between the US and China is a cause of concern regarding global growth, and thus demand for commodities such as oil, analysts see also room for higher prices as US sanctions against Iranian oil exports kick in in November. Analysts see the spare capacity in OPEC countries at the lowest level ever, which could make it difficult to add supply to the market, in case the shortfall from Iran would actually pressures global supplies.
On Friday the US Baker Hughes Oil Rig Count will be released, which indicated the level of operating oil rigs.
Pivot:65.45Support:64.363.663Resistance:65.456666.55Scenario 1:short positions below 65.45 with targets at 64.30 & 63.60 in extension.Scenario 2:above 65.45 look for further upside with 66.00 & 66.55 as targets.Comment:the RSI is mixed to bearish.
US 500
Equity indices globally declined over market uncertainty. However futures were up in early trading on Thursday over news that China would agree to participate in trade negotiations later this month with the United States.
Especially basic material (US Basic Materials ETF -1.54%) and energy companies’ (US Energy ETF (NYSE:XLE) -3.55%) stocks were seen lower on Wednesday as commodity prices declined across the board.
Cisco shares were seen at the highest level in more than a decade during after-hours trading, after posting better than expected quarterly results with revenue up by 6% year over year.
Tesla (NASDAQ:TSLA) (-2.35%) continued to decline from the high seen after Elon Musk’s Twitter messages to take the company private off the exchanges. It was reported that the SEC subpoenaed Musk and investors are preparing lawsuits, as it becomes obvious that the funding was not actually secured, but only in the negotiation stage with potential investors.
On Thursday earnings from Walmart (NYSE:WMT) and Nvidia are expected to be released.
Pivot: 2817.25 Support: 2817.25 2810 2802.75 Resistance: 2835 2843.75 2852.5 Scenario 1: long positions above 2817.25 with targets at 2835.00 & 2843.75 in extension. Scenario 2: below 2817.25 look for further downside with 2810.00 & 2802.75 as targets. Comment: the RSI shows upside momentum. The index crossed above the 50-period moving average.