The US Dollar extended its losses against other major currencies on Wednesday, as the US Dollar Index (USDX) closed lower for the third day in a row. The Chinese Yuan advanced against the Dollar over news, that the United States would seek a new round of trade talks.
The weaker Dollar helped also gold to race up, past the $1,200 barrier. WTI oil fell again below $70 on Thursday morning. China recently announced that it would seek to remove at least one million heavy diesel trucks from its roads by 2020, which could have negative impact on the demand for oil as it seeks to use other energy sources like natural gas or electricity.
Most cryptocurrencies were able to stop the downward trend and started a recovery. Among major cryptocurrencies especially Ethereum was showing a strong performance after the extensive fall over the previous days. The Swiss bank Julius Baer is reported to release a “Blockchain” basket certificate, which will not be subject to the Swiss regulator’s (FINMA) approval.
On Thursday in Germany and France CPI data will be released, followed by Producer and Import Price Index statistics from Switzerland. Both, the European Central Bank and Bank of England are scheduled to announce their respective interest rate decisions, with overall expectations of no change to the current interest rates. In the US also CPI and then Jobless New Claims will be published. In the Asian-Pacific trading session China will release its Industrial Production and Retail Sales data.
EUR/USDThe EUR/USD gained again on Wednesday, pushed higher by the weaker Dollar, but still firmly remaining in the 1.15-1.16 range.
While Industrial Production slowed down more than expected in both the European Union’s statistic at -0.8% m/m (expected -0.5%) and the Italian statistic at -1.8% m/m (expected -0.1%), Italy’s Unemployment fell from 11.1% to 10.7% in Q2.
Analysts expect for the meeting of the European Central Bank (ECB) on Wednesday, that the central bank will leave its policy measures unchanged as inflation data does not suggest that it should be forced to rethink its policies.
On Wednesday Germany and France will release their Consumer Price Index (CPI) data for August. In the US also CPI data and then Jobless New Claims, the Treasury Budget level and Federal Reserve Bank statistics will be released.
Pivot:1.161Support:1.1611.15851.157Resistance:1.1651.1671.169Scenario 1:long @ 1.1627 with targets @ 1.1650 & 1.1670 in extension.Scenario 2:below 1.1610 look for further downside with 1.1585 & 1.1570 as targets.Comment:the RSI is mixed to bullish.
Gold raced towards a new two-week high, which was attributed by some commentators to the weaker Dollar due expectations that the US and China still could reach a trade deal. Other precious metals, such as silver and platinum also gained, with platinum on track for the fourth consecutive day of higher prices.
In general it is assumed that a weak Dollar can drive demand for gold and other commodities in non-dollar economies, as due to the currency devaluation, those commodities then are cheaper for holders of other currencies, such as the Euro.
Besides the release of CPI data on Thursday, in the US further important economic statistics will be released on Friday, such as Retail Sales, Import/Export Prices, Industrial Production, Capacity Utilization and Business Inventory data.
Pivot:1202.25Support:1202.2511981192.5Resistance:1208.51212.51214.5Scenario 1:long positions above 1202.25 with targets at 1208.50 & 1212.50 in extension.Scenario 2:below 1202.25 look for further downside with 1198.00 & 1192.50 as targets.Comment:the RSI is mixed to bullish.
Oil closed again higher on Wednesday, as data from the Energy Information Administration (EIA) confirmed previous data from the American Petroleum Institute (API) that crude oil stockpiles significantly decreased. At the same time an increase in gasoline stockpiles by 1.3 million barrels and in distillate stockpiles by 6.2 million barrels was announced.
The upside was possibly limited by the OPEC Monthly Oil Market Report, which estimated oil supplies from non-OPEC countries to grow in 2019 by 2.15 million barrels per day (bpd), which is 20,000 bpd than expected while global demand would grow by 20,000 bpd less than previously expected.
On Friday the US Baker Hughes Oil Rig Count will be released, indicating the number of operating oil rigs.
Pivot:70.5Support:69.1568.768Resistance:70.570.971.25Scenario 1:short positions below 70.50 with targets at 69.15 & 68.70 in extension.Scenario 2:above 70.50 look for further upside with 70.90 & 71.25 as targets.Comment:the RSI is mixed to bearish. The prices are trading below the 20-period and 50-period moving averages.
US equity indices closed overall weaker in extended trading hours with especially bank (US Banks ETF -1.62%) and chip companies' (US Semiconductors ETF -1.16%) stocks dragging the index lower. Analysts from Goldman Sachs (NYSE:GS) explained that they are seeing semiconductor stocks declining over excess capacity being built especially in the memory chip business.
Social media companies are also seeing headwind with the major players such as Facebook (NASDAQ:FB) (-2.31%), Twitter (-3.72%) and Snap (-7.12%) all closing lower, with Snapchat also falling for the first time ever below $9 per share. Snap, the parent company of 'Snapchat' is under pressure from analysts for continuously missing targets, while others point out that the increasing use of push notifications alerts by the app, seems like a desperate move to raise user engagement.
Software Company Adobe (NASDAQ:ADBE) is set to publish its quarterly earnings on Thursday.
Pivot: 2879.5 Support: 2879.5 2876 2867 Resistance: 2895.25 2900 2907 Scenario 1: long positions above 2879.50 with targets at 2895.25 & 2900.00 in extension. Scenario 2: below 2879.50 look for further downside with 2876.00 & 2867.00 as targets. Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited. A support base at 2879.5 should limit the downside potential.