The US Dollar recovered against other major currencies with the US Dollar Index (USDX) closing 0.37% higher. Despite mounting pressure from western countries the Russian Ruble (RUB) traded in the same range as the previous days. However, the rising size of consumer credit helped by lower interest rates in Russia is seen as a concern by some analysts.
Oil retreated from recent highs in part helped by higher stockpiles than previously expected according to API data. The downside could have been limited by reports that OPEC and Russia are working on extending their production cut pact not just by years but by decades. Gold fell together with the stronger Dollar and indications that the US is indeed in trade talks with China, alleviating some trade war concerns.
Equities, especially technology values declined on Tuesday. Monday’s stellar performance on the other hand marked the biggest gains in one day for US indices since August 2015.
Cryptocurrencies were still under pressure, while Bitcoin managed to trade close to the $8,000 level and stay above the low seen on the 15th March. Of the major cryptocurrencies especially Ethereum prices fell to a new low in 2018, as rumors circulated about a new ASIC (specially designed chip) mining chip for Ethereum.
On Wednesday the United Kingdom releases CBI Distributive Trades data. In the US GDP, housing market data and Corporate After Tax Profits from the Bureau of Economic Analysis (BEA) will be released.
The EUR/USD reached a new 5-week high during trading on Tuesday but had later to retreat. Fundamental economic data both from Europe and the US disappointed expectations. European Economic Sentiment was at 112.6 (expected 113.4) and Industrial Confidence at 6.4 (expected 7.0), while in the US the Richmond Fed Manufacturing Index fell to 15 (expected 22 / previous 28) and the Consumer Confidence (Conference Board) level showed 127.7 (expected 131.0).
On Wednesday the US releases GDP and housing market data. Key data from Europe is expected on Thursday with German unemployment and inflation data.
Pivot:1.244Support:1.2371.2341.2315Resistance:1.2441.24751.251Scenario 1:short positions below 1.2440 with targets at 1.2370 & 1.2340 in extension.Scenario 2:above 1.2440 look for further upside with 1.2475 & 1.2510 as targets.Comment:the RSI broke below a rising trend line.
Gold
The price of gold against the US Dollar declined on Tuesday for the first time after a series of four consecutive trading days with higher values. The gains of the US Dollar made a case for the retreat as with a strong Dollar, the commodity is more expensive in countries using other currencies. The ongoing trade negotiations of the US with China and other parties could have reduced the perceived political tensions as even the fall of the 10-Year US Treasury yield to a 7-week low was not able to push gold prices to new highs that trading session.
On Wednesday in the US among others Gross Domestic Product (GDP) data will be released.
Pivot:1351Support:133613321326Resistance:135113571361Scenario 1:short positions below 1351.00 with targets at 1336.00 & 1332.00 in extension.Scenario 2:above 1351.00 look for further upside with 1357.00 & 1361.00 as targets.Comment:the RSI is mixed to bearish. Prices broke below a rising wedge pattern.
WTI Oil
Oil traded lower on Tuesday afternoon well ahead the publication of the American Petroleum Institute (API) inventory data. Further downside was seen after the data was released as forecasts indicated only a small build in inventories, while the increase in crude oil stockpiles actually rose by 5.3 million barrels. Analysts predicted a lower decline or higher build in inventories as many oil refineries are undergoing scheduled maintenance. Downside was further limited due to reports that OPEC and Russia are in talks to extend the production quota pact by decades.
On Wednesday the Energy Information Administration (EIA) is set to release its oil stockpile report.
Pivot:65.58Support:64.664.263.58Resistance:65.5865.9566.55Scenario 1:short positions below 65.58 with targets at 64.60 & 64.20 in extension.Scenario 2:above 65.58 look for further upside with 65.95 & 66.55 as targets.Comment:the RSI broke below a rising trend line.
US Tech 100
US equity indices traded significantly lower erasing most of the gains seen in Monday’s recovery. Especially the US Tech 100 (NASDAQ) showed significant losses. Despite revealing new iPad, Apple (NASDAQ:AAPL) (-2.75%), which is the major component of the NASDAQ traded lower. Facebook (NASDAQ:FB) (-5.00%) was under continued pressure as political pressure increases on the social media company amid the scandal with Cambridge Analytica, which was allowed to access Facebook users’ data without proper controls. Besides technology, bank (US Banks ETF -2.18%) and biotech (US Biotech ETF -2.80%) values showed also significant declines. Utilities (US Utilities ETF +1.47%) stocks traded higher against the trend thanks to lower yields on sovereign bonds. Analysts explain that there is an inverse relationship between utilities and bonds as high interest rates make utilities less interesting compared to bonds.
On Wednesday in the US statistics from the Mortgage Bankers' Association, Corporate After Tax Profits, GDP and Pending Home Sales Index data will be released.
Pivot: 6675 Support: 6450 6385 6320 Resistance: 6675 6775 6850 Scenario 1: short positions below 6675.00 with targets at 6450.00 & 6385.00 in extension. Scenario 2: above 6675.00 look for further upside with 6775.00 & 6850.00 as targets. Comment: the RSI shows downside momentum.