iFOREX Daily Analysis : April 18,2018
iFOREX | Apr 18, 2018 06:30AM ET
The US Dollar traded on Tuesday only marginally up against other major currencies with the US Dollar Index gaining 0.1%. The Russian Ruble (RUB) continued to recover, falling below 61 in the USD/RUB. However analysts still see uncertainty and risk, as the United States could impose further sanctions on Russia.
On Tuesday the British Pound (GBP) hit a new post Brexit vote high against the Dollar ahead of UK inflation data due on Wednesday. UK Unemployment Rate (ILO) was reported at 4.2% and below expectations of 4.3% unemployment rate.
Gold traded lower with the strengthening of the Dollar and the somewhat reduced geopolitical risks as North Korea is seen on a reconciliation path as it was reported that the North Korean leader Kim Jong Un met CIA Director Pompeo during the Easter Holiday. Oil edged higher over concerns of global supplies. The API reported the US crude oil inventories fell by one million barrels in the past week.
US equities continued their recovery, with especially tech stocks trading higher. Besides political and fundamental indicators, this and the following week the earning season could bring some impulses to the stock market.
On Wednesday the United Kingdom releases its Consumer Price Index (CPI) and Producer Price Index data. The Bank of Canada is set to decide about its interest rate policy.
EUR/USD
On Tuesday the Dollar was strengthened by resilient US economic data. Building Permits were up to 1.354M (expected 1.315M). Positive data of construction of new buildings can indicate broader economic confidence that these can be financed and also if needed successfully sold. Capacity Utilization was reported at 78.0% as expected. In Germany, the biggest economy in the European Union, the ZEW Survey for Business Expectations was significantly below expectations at (-8.2 / expected -3.0).
While investors perceive the risk for the markets from the conflict in Syria, following the limited strikes of the coalition are somewhat fading, concerns over the trade conflict with China persist. China introduced a tariff of 179% on imports of US sourced sorghum, citing dumping price practices by the US.
On Wednesday the European Union publishes its Harmonised Index of Consumer Prices (HICP) and in the United States the Mortgage Bankers' Association will publish its mortgage market indices.
Pivot:1.236Support:1.2361.23351.232Resistance:1.23951.23951.2395Scenario 1:long positions above 1.2360 with targets at 1.2395 & 1.2415 in extension.Scenario 2:below 1.2360 look for further downside with 1.2335 & 1.2320 as targets.Comment:the RSI shows upside momentum.
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Bitcoin
After the recent surge up above the $8,400 level, Bitcoin retraced below $7,900. The fall in Bitcoin prices on Tuesday within a very short time by over 200 points is attributed by a so-called ‘whale’ selling Bitcoins worth around $50M. The identity of the seller is not known, but that Bitcoin account is said to own close to $1.5B worth of Bitcoin. ‘Whale’ is a common term for a big player in a cryptocurrency, who with his actions can move the markets.
Some analyst predict a recovery for the Bitcoin following the tax season in the US, where some holders of cryptocurrency had to sell their assets in order to pay their tax burden.
Pivot:7717Support:781477177471Resistance:823083778524Scenario 1:rebound towards 8377.Scenario 2:below 7717, expect 7471 and 7324.Comment:the RSI is below its neutrality area at 50. The MACD is negative and above its signal line. The configuration is mixed. Moreover, the pair stands above its 20 MA (7912) but below its 50 MA (8015).
WTI Oil
Oil edged higher on Wednesday night on continued worries about supplies in the areas plagued by conflict, namely the Middle-East with Iran and Saudi-Arabia being at odds but also because the deepening economic crisis in Venezuela could lead to supply disruptions.
The report on oil stockpiles in the United States by the American Petroleum Institute (API) released on Tuesday evening indicated a draw of one million barrels in the previous week, contrary to expectations that reserves would decrease.
On Wednesday the Energy Information Administration (EIA) will publish its report on oil, gasoline and distillate inventories in the United States.
Pivot:66.05Support:65.265.766.05Resistance:67.267.7568.2Scenario 1:long positions above 66.05 with targets at 67.20 & 67.75 in extension.Scenario 2:below 66.05 look for further downside with 65.70 & 65.20 as targets.Comment:the RSI shows upside momentum. The prices are trading above both 20-period and 50-period moving averages.
US Tech 100
US equity indices traded higher on Tuesday, with the NASDAQ (US Tech 100) showing especially good results. Future indices continued trading up in the Asian trading session. Positive and better than expected fundamentals, such as Industrial Production at +0.5% m/m (expected +0.4%) and Housing Starts at 1.319M (expected 1.264M) boosted the confidence.
Twitter (+11.30%) surged higher, recovering a significant part of the losses sustained around a month ago, when the Facebook (NASDAQ:FB) data scandal also pulled other social media stocks down. The rise is attributed to a positive rating by investment bank Morgan Stanley (NYSE:MS), which considered the improved user growth in their analysis. Other tech sectors, such as biotech (US Biotech ETF +1.95%) and chip-makers (US Semiconductors ETF +1.73%) also saw their values rising.
Among many blue chip companies on Wednesday Abbott Laboratories (NYSE:ABT), ASML, Morgan Stanley, American Express (NYSE:AXP) and Alcoa (NYSE:AA) are due to present their earnings numbers.
Pivot: 6717.5 Support: 6717.5 6640 6605 Resistance: 6930 6973.5 7030 Scenario 1: long positions above 6717.50 with targets at 6930.00 & 6973.50 in extension. Scenario 2: below 6717.50 look for further downside with 6640.00 & 6605.00 as targets. Comment: the RSI advocates for further upside.
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