The US Dollar declined against other major currencies on Friday with the US Dollar Index (USDX) declining by 0.49%. The Dollar was weakened by the political developments in the US, such as the looming trade war with China and the initial threat by President Trump to veto a spending bill that would have had forced another government shutdown.
The Turkish Lira (TRY) extended its losses vs. the USD on Friday, closing the week at an all-time high for USD/TRY. The Turkish Lira is under pressure by concerns about a global trade war from the US, who are not exempting Turkey from newly imposed steel and aluminum tariffs, unlike other countries like Canada or the European Union.
Gold reached a 1-month high on Friday over political uncertainty and a weaker Dollar, while US Treasury Yields declined. Oil prices continued to climb to an eight week high, as Saudi-Arabia voiced support for extending production cut coordination with non-OPEC members, such as Russia beyond this year.
Equity indices were under immense pressure, despite the US Durable Goods New Orders beating expectations. Politics dominated the price development of equities as well, with the S&P 500 (US 500) posting the highest weekly loss in over two years.
Cryptocurrencies rose during the course of Saturday, with Bitcoin coming close to the $9,000 level, before retreating again on Sunday night. Cryptocurrencies continue to receive very mixed evaluations from the public. Twitter CEO Jack Dorsey mentioned in an interview with the Sunday Times, that he believes in Bitcoin becoming the single global currency within the next decade.
This week the European Commission (EC) publishes Economic Sentiment, Industrial Confidence and Consumer Confidence figures on Tuesday. The US Real Gross Domestic Product (GDP) will be released on Wednesday, followed by the GDP of the United Kingdom and Canada on Thursday. Also on Thursday the US releases Jobless, Core PCE Price Index, Consumer Spending and Personal Income data. On Friday a broad array of data is set to be released in Japan, including inflation (CPI) data, which is then also due from France and Italy.
The EUR/USD traded higher by roughly half a percentage point during Friday’s trading and managed to close the week with gains after the two previous weeks were showing losses. The gains can be attributed mostly to a Dollar weakness over trade war fears as well as increasingly erratic politic style from the US Presidency with changes in the US government as well as ongoing concerns about the Russian election meddling probe. President Trump avoided on Friday another government shutdown by signing another spending bill, he threatened to veto just shortly beforehand.
On Monday the Gross Domestic Product (GDP) numbers will be published in France. Later that day in the United States the Chicago Fed National Activity Index (CFNAI) will be released.
Pivot:1.232Support:1.2321.22851.2255Resistance:1.2391.2411.2435Scenario 1:long positions above 1.2320 with targets at 1.2390 & 1.2410 in extension.Scenario 2:below 1.2320 look for further downside with 1.2285 & 1.2255 as targets.Comment:the RSI is supported by a rising trend line.
Gold
Uncertainty about the development of the US-China trade relations as well as the appointment of John Bolton as National Security Advisor by US President Trump fueled global uncertainty in the markets. Bolton is said to have a tougher stance on US adversaries Iran and North Korea, thus fueling concerns about possible escalations. The strong demand for gold was also supported by falling 10 Year US Treasury yields and a weaker Dollar during Friday’s trading. A weak Dollar makes the Dollar traded commodity gold cheaper in countries where the Dollar is not used as main currency, while lower high-grade sovereign bond yields make the difference to the non-interest bearing gold smaller and thus reduce its disadvantage.
In terms of US fundamental data, this week among others the Real Gross Domestic Product (GDP) will be published on Wednesday and Core PCE Price Index as well as Consumer Spending and Personal Income figures are due on Thursday.
Pivot:1337Support:133713321324.5Resistance:135113561361Scenario 1:long positions above 1337.00 with targets at 1351.00 & 1356.00 in extension.Scenario 2:below 1337.00 look for further downside with 1332.00 & 1324.50 as targets.Comment:the RSI is mixed with a bullish bias.
WTI Oil
Oil continued its uptrend on Friday, making Thursday the only day for WTI oil to close lower in the previous week. This marks the third consecutive week of gains for crude oil and its highest level since the start of February. This uptick comes despite the US Baker Hughes Oil Rig Count showing again a higher number of operating oil rigs, increasing by 4 to 804. The rise in oil prices was supported by statements from the Saudi-Arabian Energy Minister as he stated that OPEC would work with Russia and other non-OPEC countries on supply cuts in 2019.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot:64.75Support:64.7564.163.6Resistance:66.266.768.15Scenario 1:long positions above 64.75 with targets at 66.20 & 66.70 in extension.Scenario 2:below 64.75 look for further downside with 64.10 & 63.60 as targets.Comment:the RSI is bullish and calls for further advance. Prices broke above a symmetrical triangle pattern.
US 500
US equities extended losses on Friday on concern about a global trade war and other political factors. The S&P 500 (US 500) declined the most in over two years in the course of last week’s trading and settled around the low seen during the market correction in February. Banks (US Banks ETF -3.47%) and financial (US Financials ETF -3.00%) values showed among the highest losses, while the downside for energy companies (US Energy ETF (NYSE:XLE) 0.52%) was limited due to the again rising oil prices. The positive Durable Goods New Orders data with a gain of 3.1% m/m (expected +1.7%) and almost as expected New Home Sales level at 618 thousand (expected 620 thousand) could did little to lift the sentiment.
The Dropbox IPO was oversubscribed and the share traded significantly higher than the expected $21 by the company, reaching an intraday high of over $31 during Friday’s first day of public trading. The IPO is the biggest since Snap(chat) going public last year.
Political developments as well as employment, consumer and GDP data in the US could be determining factors this week. The following week will show an increase in quarterly earnings publications.
Pivot: 2635 Support: 2580 2560 2535 Resistance: 2635 2658 2691 Scenario 1: short positions below 2635.00 with targets at 2580.00 & 2560.00 in extension. Scenario 2: above 2635.00 look for further upsidewith 2658.00 & 2691.00 as targets. Comment: the RSI shows downside momentum.