The US Dollar traded overall almost unchanged against other major currencies on Tuesday, with the US Dollar Index (USDX) closing 0.04% lower.
The Chinese Yuan (Offshore – CNH) recovered from its one year low against the Dollar in the Asian trading session on Wednesday. The South African Rand (ZAR) gained more than one percent on Tuesday and continued trading stronger after it was announced that China would seek to invest $14.7 bn. in South Africa.
Gold closed almost unchanged as the Dollar in US Treasury Yields showed little. Oil traded higher, after data from the API indicated lower stockpiles of crude oil and gasoline in the US.
Bitcoin continued to rally, reaching a new 2-months high. Other major cryptocurrencies, such as Ethereum and Ripple also traded up, but were unable to match Bitcoin’s performance. Recent statistics indicate, that Bitcoin significantly increased its dominance in cryptocurrency market by rising from around 43% a week ago, to more than 47% on Wednesday. Dominance is defined as the market capitalization of one kind of asset (Bitcoin) compared to the market capitalization of the whole market.
On Wednesday in France the PPI, in Germany the IFO Survey and in the UK the CBI Distributive Trades statistic are due to be released. In the US data on New Home Sales and the mortgage market is expected to be published.
The Euro traded almost unchanged against the Dollar on Tuesday. The German and European Manufacturing PMI were reported higher than expected at 57.3 (DE) and 55.1 (EU) (expected 55.5 (DE) / 54.6 (EU)), while the Services PMI was reported both for Germany and the EU at 54.4, below expectations. The French Business Climate Indicator fell to a level of 108 (expected 110), which is the lowest level in more than a year.
The FHFA House Price Index in the US showed a gain of only 0.2% m/m in May (expected 0.4%), while the Redbook Store Sales Statistic was up at 3.8% y/y (previous 3.3%).
On Wednesday in France the Producer Price Index (PPI) will be released. In Germany the influential IFO Survey on Business Expectations and Economic Sentiment will be published. The ECB is set to release M3 monetary supply and Private Sector Lending statistics.
Pivot:1.1715Support:1.16551.16351.1605Resistance:1.17151.1751.1765Scenario 1:short @ 1.1679 with targets @ 1.1655 & 1.1635 in extension.Scenario 2:above 1.1715 look for further upside with 1.1750 & 1.1765 as targets.Comment:the RSI is mixed to bearish.
The Turkish Lira significantly depreciated against other currencies, after the Turkish Central Bank announced that it would leave its interest rate unchanged at 17.75%. Analysts widely expected the central bank to raise interest rates amid inflation and weak performance of the Lira.
A weak Lira is seen as a problem for Turkish commercial banks and companies, which widely rely on USD denominated debt for financing. It was reported that the government owned Ziraat bank held in Q1 of 2018 compared to Q1 of 2017 additional 1.5 bn. Lira debt, which is classified as struggling.
On Wednesday in Turkey Capacity Utilization and Manufacturing Confidence data will be released. Next week the country will release Tourism Revenue, Trade Balance, CPI and PPI data.
Pivot:4.8441Support:4.84414.79614.7675Resistance:4.96854.99715.0257Scenario 1:as long as 4.8441 is support look for 4.9685.Scenario 2:the downside breakout of 4.8441 would call for 4.7961 and 4.7675.Comment:the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The pair could retrace. Moreover, the pair is below its 20 MA (4.8838) but above its 50 MA (4.8456).
WTI Oil
Oil prices closed higher on Tuesday, as data from the American Petroleum Institute indicated that crude oil stockpiles decreased by 3.16 million barrels in the US over the course of the week.
The fall in gasoline stockpiles was even more significant with a reduction of 4.9 million barrels reported, while it was expected that the inventories would fall by less than a million barrels that week.
News that China plans to increase investments into its infrastructure could also have reduced fears that the ongoing trade conflict with the US would decrease the country’s oil demand due to a possible economic slowdown.
On Wednesday the Energy Information Administration (EIA) will release its oil stockpile statistics.
Pivot:68.3Support:68.367.5567.2Resistance:69.369.870.55Scenario 1:long positions above 68.30 with targets at 69.30 & 69.80 in extension.Scenario 2:below 68.30 look for further downside with 67.55 & 67.20 as targets.Comment:the RSI is mixed to bullish.
US 500
US equity indices traded mixed on Wednesday, with the S&P 500 (US 500) and Dow Jones Industrial Index (US 30) closing higher, while the NASDAQ (US Tech 100) and Russell 2000 (US 2000) faced losses.
Overall the most significant gains were seen in the energy (US Energy ETF (NYSE:XLE) +1.28%) and Health Care (US Health Care ETF +0.96%) sector, while banks (US banks ETF -0.93%) and chip makers (US Semiconductors ETF -1.20%) faced losses.
Facebook (NASDAQ:FB) (+1.77%) closed at a record high ahead of the release of its quarterly earnings on Wednesday after markets close. Analysts suggested that the positive quarterly results of Google’s holding company Alphabet (NASDAQ:GOOGL) (+3.68%), which reported that the new stricter data protection regulation in the EU had only modest implications for its user growth, could have also boosted sentiment for other affected companies, such as Facebook.
Among other companies on Wednesday Boeing (NYSE:BA), UPS, Coca-Cola, AMD, Ford and General Motors (NYSE:GM) are expected to release earnings, while on Thursday even more companies, such as McDonalds, MasterCard, Celgene (NASDAQ:CELG), American Airlines, ConocoPhillips (NYSE:COP), Spotify, Amazon (NASDAQ:AMZN) and Starbucks (NASDAQ:SBUX) will release their earnings.
Pivot: 2822 Support: 2811 2806 2802 Resistance: 2822 2827 2831.25 Scenario 1: short positions below 2822.00 with targets at 2811.00 & 2806.00 in extension. Scenario 2: above 2822.00 look for further upside with 2827.00 & 2831.25 as targets. Comment: the RSI advocates for further decline. The upside potential should be limited by the resistance level at 2822.