iFOREX Daily Analysis : December 06,2017
iFOREX | Dec 06, 2017 05:22AM ET
The US Dollar traded stronger on Tuesday amid ongoing optimism about the progress of the US tax reform, which helped the US Dollar Index (USDX) close 0.24% higher, showing that the Dollar gained against other major currencies. The Turkish Lira (TRY) continued its recovery, reaching a new one-month high against the Dollar as president Erdoğan tried to assure the markets that there would be no capital controls, while the high inflation at 12.98% in November signaled that the central bank could raise interest rates soon.
Gold reached six-weeks lows as market sentiment continues to be positive due to the successful passage of the tax reform bill in the Senate and the stronger Dollar this week so far helped push prices lower. Oil settled slightly higher as a Reuters survey found reduced production In OPEC countries, while US oil stockpiles further decreased according to American Petroleum Institute (API) data.
US indices closed lower as tech stocks failed to rebound significantly from Monday’s losses and worse than expected Trade Balance deficit and ISM Non-Manufacturing Index data weighted on the market.
Bitcoin continued its rise on Tuesday reaching a new all-time high as the CBOE is about to launch Bitcoin futures on the 10th December and help more institutional investors being able to invest into the cryptocurrency.
On Wednesday we will see Manufacturer’s Orders numbers from Germany. Switzerland publishes its inflation data. In the US the MBA mortgage indexes as well as ADP Employment, Nonfarm Productivity and Unit Labor Costs statistics will be published. The Bank of Canada is scheduled to make an interest rate decision on Wednesday.
EUR/USD
The Dollar [i] traded stronger against most currencies including the Euro on Tuesday as the markets were positive on the prospective tax reform progress in the US. This comes as fundamental economic data both in the European Union (EU) with Retail Sales being below expectations at -1.1% monthly (-0.7% expected / -0.7% previous) and the US Trade Balance deficit higher than expected and the ISM Non-Manufacturing Index lower at 57.4 (expected 59.0 / previous 60.1).
On Wednesday we will see Manufacturer’s Orders numbers from Germany and mortgage and labour markets statistics from the US.
Pivot: 1.188
Support: 1.1775 1.1755 1.1725
Resistance: 1.188 1.19 1.1935
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Scenario 1: short positions below 1.1880 with targets at 1.1775 & 1.1755 in extension.
Scenario 2: above 1.1880 look for further upside with 1.1900 & 1.1935 as targets.
Comment: the RSI is capped by a bearish trend line.
Gold
Gold [i] fell on Tuesday to a six-week low due to optimism in the market about the likely US tax reform and a stronger Dollar. As yields on the US Dollar to some extent influence the demand for Gold, the likely expectation in the market that the Federal Reserve would raise interest rates at their meeting Wednesday next week (13. Dec) could increase pressure on the price of gold.
The US publishes job market/wages data during the next days, concluding the week with the highly influential Non-Farm Payrolls (NFP) on Friday.
Pivot: 1274
Support: 1260 1254 1251
Resistance: 1274 1278 1283
Scenario 1: short positions below 1274.00 with targets at 1260.00 & 1254.00 in extension.
Scenario 2: above 1274.00 look for further upside with 1278.00 & 1283.00 as targets.
Comment: the RSI is mixed to bearish.
WTI Oil
Oil [i] settled slightly higher on Tuesday amid positive OPEC production cut compliance as a Reuters survey found OPEC countries’ production to decline in November by 0.3 million barrels per day to its lowest value since May. The American Petroleum Institute (API) reported that the US crude oil stockpiles decreased by 5.48 million barrels, which was a higher decrease than expected. On Wednesday the Energy Information Administration (EIA) will publish its statistics on US oil, gasoline and distillate stockpiles.
Pivot: 57.05
Support: 57.05 56.75 56.4
Resistance: 58 58.4 58.8
Scenario 1: long positions above 57.05 with targets at 58.00 & 58.40 in extension.
Scenario 2: below 57.05 look for further downside with 56.75 & 56.40 as targets.
Comment: the RSI shows upside momentum.
US 500
US equity indices [i] settled mostly lower, with the exception of the NASDAQ (US Tech 100), which slightly rebounded after high losses on Monday. Fundamental economic data was below expectations with the Trade Balance deficit at 48.7 bn. (expected only 47.4 bn.), ISM Non-Manufacturing Index at 57.4 (expected 59.0) and Redbook Store Sales lower at 3% (previous 4.8%).
The biggest losses were seen in bank (US Banks ETF -1.64%) and utilities (US Utilities ETF -1.34%) stocks. Snapchat was up by 10.02% after an apparently successful redesign of its app and an upgrade on its stock by analysts from Barclays (LON:BARC).
On Wednesday the MBA mortgage indexes as well as ADP Employment, Nonfarm Productivity and Unit Labor Costs statistics will be published.
Pivot: 2649
Support: 2627 2615 2604.25
Resistance: 2649 2657 2665
Scenario 1: short positions below 2649.00 with targets at 2627.00 & 2615.00 in extension.
Scenario 2: above 2649.00 look for further upside with 2657.00 & 2665.00 as targets.
Comment: the RSI is mixed with a bearish bias.
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