The US Dollar traded almost unchanged against other major currencies on Monday, with the US Dollar Index (USDX) closing 0.01% higher. The Dollar continued to gain ground after the successful summit with North Korea in Singapore before a sharp reversal around 7 AM GMT.
Gold continued trading in a subdued range mostly below $1,300 as the situation with North Korea did not generate any anticipated additional geopolitical risk. On the positive sentiment of the global markets oil was seen higher, despite concerns over rising production in the US and Russia.
Equity indices were widely trading higher, continuing the recovery since the start of June. The German car maker Daimler was trading almost 2% up on Tuesday, despite an order by the German regulator to recall 238,000 Diesel cars over alleged emission manipulations. Some expected tougher measures against yet another German car maker involved in such controversy.
Cryptocurrencies such as Bitcoin traded moderately higher after the news of a theft of crypto tokens from the ‘Coinrail’ exchange by some estimates reduced the market capitalization of cryptocurrencies by more than $40 billion on Sunday.
On Tuesday in the United Kingdom data on unemployment and average earnings is set to be released. In the US CPI data, Treasury Budget level statistics and Redbook Store Sales data is due for publication.
The EUR/USD traded lower at the start of trading on Tuesday but was then able to reach above the 1.18 level again.
The Italian Industrial Production (IP) statistics released on Monday were worse than expected at -1.2% m/m (expected -0.7%). The Dollar according to some analysts received also support after the highly successful summit between the US and North Korean Leaders Trump and Kim in Singapore was unexpectedly concluded with a signing of a comprehensive memorandum.
On Tuesday in Italy Unemployment Rate statistics will be released. In Germany the influential ZEW survey is due for publication.
This week both the US FOMC and the European ECB are set to make their rate decisions, with the US central bank scheduled to announce their meeting results on Wednesday and the central bank for the Euro area on Thursday.
Pivot:1.1755Support:1.17551.17351.171Resistance:1.18151.1841.1875Scenario 1:long positions above 1.1755 with targets at 1.1815 & 1.1840 in extension.Scenario 2:below 1.1755 look for further downside with 1.1735 & 1.1710 as targets.Comment:the RSI shows upside momentum.
The Turkish Lira continued to trade weaker against the Dollar since the start of the week. The Turkish economy faces significant pressure over the economic conditions of a falling currency and high inflation. On Friday the rating agency Moody’s downgraded its ratings on 17 Turkish banks as there is concern over the increasing cost of their funding in foreign currencies.
The Current Account Deficit for April was with $5.43B higher than expected, while GDP growth at +7.4% y/y moderately surpassed expectations.
Other emerging Market currencies, like the Mexican Peso (MXN) or the South African Rand (ZAR) were also negatively affected by the strong Dollar and risk sentiment in these markets.
On Wednesday in Turkey Industrial Production data is set to be released. As Turkey is having its presidential elections at the end of next week, it is seen as not certain if the incumbent President Erdogan will be able to be elected this time in the first round of the elections.
Pivot:4.491Support:4.454.4914.5071Resistance:4.57394.59834.6226Scenario 1:as long as 4.4910 is support look for 4.5983.Scenario 2:the downside breakout of 4.4910 would call for 4.4500 and 4.4257.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 trading above both its 20 and 50 MAs (respectively at 4.5243 and 4.5135).
WTI Oil
Oil traded higher in early trading on Tuesday, reaching its highest level in 1-1/2 weeks. Oil was seen higher as geopolitical tensions faded and markets showed a positive sentiment, following the successful summit between the leaders of the United States and North Korea in Singapore.
While oil production from the US and Russia is seen rising, there is still uncertainty, whether OPEC will indeed raise production quotas at their meeting next week.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday. Also on Wednesday the International Energy Agency (IEA) is set to release its monthly global oil supply and demand report.
Pivot:65.75Support:66.656767.3Resistance:65.765.264.85Scenario 1:long positions above 65.75 with targets at 66.65 & 67.00 in extension.Scenario 2:below 65.75 look for further downside with 65.20 & 64.85 as targets.Comment:the RSI advocates for further advance. The rising 50-period moving average is acting as a support.
US 500
Major US equity indices closed higher on Monday, with the S&P 500 (US 500) continuing with its steady recovery since the start of June. Non-cyclical (US Non-Cyclicals ETF +0.93%) shares were in particular trading up, while losses were seen mostly in the banking sector (US Banks ETF -0.98%).
Tesla (NASDAQ:TSLA) (+4.58%) pushed higher on Monday to its highest level since March and gaining more than 16% since the beginning of the month. After facing some criticism that the autonomous driving functions of Tesla were falling behind the competing legacy car manufacturers, Tesla announced an update for its ‘Autopilot’ software in August. Analysts expect that it could raise the autonomous driving level from 2 to 3, one of the highest in production vehicles at the moment.
AMD (+3.15%) traded up, close to its all-time high level seen last Thursday. Analysts foresee that AMD chips will create a stiff competition to Intel (NASDAQ:INTC) (-0.78%), which faces issues in shrinking its production process.
On Tuesday in the US data on the Consumer Price Index (CPI) and Treasury Budget level is set to be released.
Pivot: 2779 Support: 2779 2765 2758.5 Resistance: 2794 2802 2810 Scenario 1: long positions above 2779.00 with targets at 2794.00 & 2802.00 in extension. Scenario 2: below 2779.00 look for further downside with 2765.00 & 2758.50 as targets. Comment: the RSI is mixed to bullish. The downside potential should be limited by the key support at 2779.