iFOREX Daily Analysis : April 20,2018
iFOREX | Apr 20, 2018 05:47AM ET
The US Dollar was trading the third consecutive day stronger against other major currencies, with the US Dollar Index (USDX) up by 0.32%. The Mexican Peso (MXN) fell to a four-week low against the USD, which was attributed to profit taking and also a new poll showing strong support for the leftist candidate Obrador for the presidential election in July
Gold fell on a stronger Dollar and higher US Treasuries yields. Oil reached a new three-year high ahead of the OPEC meeting, which is set to take place on Friday.
US equities were overall trading lower with technology and semiconductor stocks affected by predictions that the high-end smartphone market would see slower demand.
In the cryptocurrency market prices continued with their recent upwards movement. Ripple spiked up above $0.85, supported by high trading volumes, in a stronger move than most other well-known cryptocoins like Bitcoin or Ethereum.
On Friday in Germany the Producer Price Index (PPI) statistic will be released. In Canada Retail Sales and Consumer Price Index (CPI) data is scheduled to be released on Friday.
GBP/USD
Disappointing Retail Sales data from the United Kingdom, paired with a strong Dollar led to third consecutive day of a falling GBP/USD, falling to a two-week low early on Friday. In the United States the fundamental data was mixed with the Philadelphia Fed General Business Conditions at 23.2 above expectations (expected 20.1) and Jobless New Claims only slightly above expectations at 232 thousand (expected 230 thousand).
Next week in the UK the CBI Industrial Trends Survey will be published on Tuesday, the CBI Distributive Trades statistic on Thursday and the Gross Domestic Product (GDP) on Friday.
Pivot:1.4135Support:1.40251.39851.395Resistance:1.41351.4171.4215Scenario 1:short positions below 1.4135 with targets at 1.4025 & 1.3985 in extension.Scenario 2:above 1.4135 look for further upside with 1.4170 & 1.4215 as targets.Comment:the RSI shows downside momentum.
Gold (EUR)
Gold traded lower on Thursday, which is attributed to some extent to the stronger Dollar and higher yields of US Treasuries. A general assumption is that a stronger Dollar makes this Dollar traded commodity more expensive in non-Dollar markets and thus affects demand. Treasuries on the other hand are seen just as gold as a ‘safe-haven’ asset and when the yield of the Treasury bonds rises, it makes them more attractive compared to the non-interest bearing gold.
Next week in the US key economic data, such as the Real Gross Domestic Product (GDP) is expected for Friday.
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Pivot:1347Support:1337.51334.51331Resistance:134713511356Scenario 1:short positions below 1347.00 with targets at 1337.50 & 1334.50 in extension.Scenario 2:above 1347.00 look for further upside with 1351.00 & 1356.00 as targets.Comment:the RSI is bearish and calls for further downside.
Brent Oil
Oil reached a new three-year high on Thursday, ahead of the OPEC meeting in Jeddah on Friday. Later during trading on Thursday and Friday the oil price saw some retracement down and on analysts’ comments that with prices now finally reaching higher levels a new strategy might be needed. However others expect the financially struggling Saudi-Arabia to push for strategies allowing even higher oil prices.
On Friday the US Baker Hughes Oil Rig Count will be released, indicating the number of operating oil rigs in the United States.
Pivot:74.75Support:7372.1571.2Resistance:74.7575.476.5Scenario 1:short positions below 74.75 with targets at 73.00 & 72.15 in extension.Scenario 2:above 74.75 look for further upside with 75.40 & 76.50 as targets.Comment:the RSI is mixed to bearish.
US 500
US equity indices closed lower on Thursday with very different results based on the sector. Chip-maker stocks (US Semiconductors ETF -4.46%) and non-cyclical stocks (US Non-Cyclicals ETF -2.86%) were particularly seen lower, while bank (US Banks ETF +1.82%) and financial (US Financials ETF +1.46%) stocks were up. TSMC, which is the world’s biggest chip producer expectations of lower demand for high end smartphones and analysts saying that the sales of the iPhone were a significant contributing factor pushed many chip-maker’s stock prices lower, such as Qualcomm (NASDAQ:QCOM) (-4.87%), Texas Instruments (NASDAQ:TXN) (-3.94%) and Intel (NASDAQ:INTC) (-2.69%).
Philip Morris (-15.42%) shares had their worst day in a decade over concerns of future demand, as the company reported in the newest earnings that they spend $4.5B on the development of new products, which are struggling to win over customers.
On Friday General Electric (NYSE:GE), Schlumberger, Honeywell and others will report on their earnings.
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