The US Dollar declined against other major currencies on Friday for the second day in a row -0.18%. The falling yields on Treasuries were said to be one of the factors for the retracement. After a brief recovery last week, the Turkish Lira (TRY) continued its decline against the Dollar on Friday and in early Monday trading, while the presidential elections are only 6 weeks away.
Gold traded at its highest level this May, supported by a weaker US Dollar and also falling yields on US Treasuries. Oil recovered from its recent 3-1/2 year high as Europe is seen in opposition of US sanctions and the exit of the nuclear deal on Iran and the Baker Hughes Oil Rig Count showed again an increase in producing oil rigs.
US equity indices continued trading higher on Friday, with indices futures continuing that trend on Monday. The NASDAQ (US Tech 100) closed on Friday for the second consecutive week higher, the first time since mid-February.
Bitcoin and other cryptocurrencies were under pressure, with Bitcoin falling to a 3 week low on Saturday. Meanwhile the adaptation of cryptocurrencies by banks is continuing as Goldman Sachs (NYSE:GS) is starting to trade Bitcoin for some of its customers.
On Monday relatively little data except for central bank board members’ speeches is expected. In the Asian-Pacific trading session on Tuesday, in Australia the minutes of the last central bank meeting are due to be released, while China is set to publish its Industrial Output and Retail Sales statistics.
EUR/USDThe EUR/USD traded higher on Friday for the second day in a row, a trend that continued in early trading on Monday. Analysts mentioned that the falling yield on US Treasuries, which recently helped the Dollar to strengthen was a factor in this move.
No significant data is expected from Europe this Monday, however multiple members of the ECB Executive Board are announced to deliver speeches, which could be interesting to market participants. On Tuesday Germany will release its Gross Domestic Product (GDP) data, followed by the French Consumer Price Index (CPI) statistics. Then the European Union will publish the Industrial Production (IP) and GDP data for the common market bloc.
Pivot: 1.1925 Support: 1.1925 1.1905 1.189Resistance: 1.197 1.199 1.202 Scenario 1: long positions above 1.1925 with targets at 1.1970 & 1.1990 in extension. Scenario 2: below 1.1925 look for further downside with 1.1905 & 1.1890 as targets. Comment: technically the RSI is above its neutrality area at 50.
The weaker Dollar and falling US Treasury yields helped gold to move to a new high for this month on Friday. A weaker Dollar makes the predominantly Dollar traded commodity cheaper in non-Dollar markets, while a lower yield on safe-haven bonds, like US Treasuries, reduces the disadvantage of gold as asset which does not bear interest.
Some key data on the US economy is expected on Tuesday with data released about the Foreign Demand for Long-Term U.S. Securities, Business Inventories, Housing Market Index and Retail Sales statistics.
Pivot: 1326 Support: 1315.5 1311 1307Resistance: 1326 1332 1339 Scenario 1: short positions below 1326.00 with targets at 1315.50 & 1311.00 in extension. Scenario 2: above 1326.00 look for further upside with 1332.00 & 1339.00 as targets. Comment: the RSI is mixed to bearish.
Oil prices fell on Friday from the 3-1/2 high seen in the previous days. The Baker Hughes Oil Rig Count for the US was again higher, now at 844 (+10) operating oil rigs, which marks the 6th consecutive week of increase number of oil rigs in operation. While the announcement by the US President Trump to reintroduce sanctions against Iran propelled the oil price to this high level, European leaders are pushing against the exit from the nuclear deal and indicate that they are committed to the agreement reached.
On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 71.13 Support: 70 69.6 69.05Resistance: 71.13 71.61 71.9 Scenario 1: short positions below 71.13 with targets at 70.00 & 69.60 in extension. Scenario 2: above 71.13 look for further upside with 71.61 & 71.90 as targets. Comment: the RSI is capped by a declining trend line.
US equity indices traded again higher on Friday and continued the uptrend in early Monday trading, with the S&P 500 (future) – US 500 reaching a new 3 week high. Especially health care stocks (US Health Care +1.51%) traded higher, while real estate (US Real Estate ETF -0.46%) and chip makers (US Semiconductors ETF -0.72%) faced losses.
Nvidia (-2.32%) closed lower on Friday. While overall reporting positive earnings numbers, Nvidia predicts a significant decline in crypto-mining related business in the coming quarter.
The earning season continues with some blue chip companies still due to disclose their quarterly earnings, such as Cisco on Wednesday and Walmart (NYSE:WMT) on Thursday.
Pivot: 2713 Support: 2713 2703 2685 Resistance: 2750 2765 2782 Scenario 1: long positions above 2713.00 with targets at 2750.00 & 2765.00 in extension. Scenario 2: below 2713.00 look for further downside with 2703.00 & 2685.00 as targets. Comment: the RSI shows upside momentum. The index is supported by a rising trend line.