iFOREX Daily Analysis : December 07,2017
iFOREX | Dec 07, 2017 03:44AM ET
The US Dollar continued its rise against other major currencies on Wednesday as the US Dollar Index (USDX) closed 0.28% higher. The US is still reaping the optimism from the vote in the US Senate in favour of the Trump’s administration tax plan. However there is some sense of uncertainty as to whether a government shutdown can be prevented by Friday. The Canadian Dollar (CAD) lost close to 1% against the US Dollar as the Bank of Canada indicated that future interest rate hikes are not a sure thing given the economic conditions.
Gold remained near a six week low as positive sentiment following the progress with the US tax reform and the strong US Dollar. Oil declined by over 2% as according to the Energy Information Administration (EIA) the gasoline stockpiles were significantly higher than expected at 6.78 million barrels more than the week before.
US equities closed mixed as most sectors showed moderate drops attributed by some to end of year sell offs, technology stocks were up, rebounding from the weak performance at the beginning of the week.
Bitcoin continued its rally to a new all-time high, racing through the $13,000 level with ease and gaining over 15% within just one day. Most other cryptocurrencies such as Ethereum and Ripple however strongly declined by close to 10%. The cryptocurrency market will be carefully watching how the launch of Bitcoin futures by the CBOE this Sunday will go along.
On Thursday Germany publishes Industrial Production (IP) figures, followed by France’s Merchandise Trade – level and the European Union’s GDP data. From the United Kingdom we will see the Halifax House Price Index (HPI). The US will publish jobless claims data as well as consumer credit statistics.
EUR/USD
The US Dollar continued gaining against other currencies including the Euro as there is continued optimism about the tax reform and somewhat easing concern about an imminent government shutdown if a deal between the Democrats and Republicans is not reached by Friday. The Dollar was also supported by positive labour market data as the ADP Employment report level of 190 thousand was better than expected.
On Thursday Germany publishes Industrial Production (IP) figures, followed by France’s Merchandise Trade – level and the European Union’s GDP data. The US will publish jobless claims data as well as consumer credit statistics.
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Pivot: 1.183
Support: 1.1775 1.175 1.1725
Resistance: 1.183 1.185 1.1875
Scenario 1: short positions below 1.1830 with targets at 1.1775 & 1.1750 in extension.
Scenario 2: above 1.1830 look for further upside with 1.1850 & 1.1875 as targets.
Comment: the RSI is mixed to bearish.
Gold
Gold continued its decline and closed at the lowest level since August. Gold is pressured by the positive market sentiment following the tax reform progress in the US as well as the expectation that the Federal Reserve would raise interest rates. Despite lower US Treasury yields on Wednesday, gold failed to rebound.
Gold traders will watch carefully the influential US Non-Farm Payroll (NFP) data published on Friday and will assess how the progress averting a US government shutdown goes along.
Pivot: 1269
Support: 1260 1254 1251
Resistance: 1269 1272.5 1278
Scenario 1: short positions below 1269.00 with targets at 1260.00 & 1254.00 in extension.
Scenario 2: above 1269.00 look for further upside with 1272.50 & 1278.00 as targets.
Comment: technically the RSI is below its neutrality area at 50.
WTI Oil
Oil sharply declined on Wednesday as data from the Energy Information Administration (EIA) showed that US gasoline supplies were significantly higher by 6.8 million barrels, despite crude oil inventories being down by 5.6 million barrels.
The markets will be waiting on the US Baker Hughes Oil Rig Count published on Friday to see if the OPEC deal from last week already impacted US production, while relies on oil prices remaining high to be profitable.
Pivot: 57.05
Support: 55.75 55.2 54.65
Resistance: 57.05 57.95 58.4
Scenario 1: short positions below 57.05 with targets at 55.75 & 55.20 in extension.
Scenario 2: above 57.05 look for further upside with 57.95 & 58.40 as targets.
Comment: the RSI is bearish and calls for further downside.
US 500
US equity indices closed mixed on Wednesday, while tech values rebounded with the NASDAQ (US Tech 100) closing 0.4% higher rebounding from the high losses at the start of the week. Technology (US Technology ETF +0.59%) and non-cyclicals (US Non-Cyclicals ETF +0.57%) stocks were the best performers on Wednesday, while the biggest losses were seen in energy (US Energy ETF (NYSE:XLE) -1.33%) and cyclicals (US Cyclicals ETF -0.71%) stocks.
On Thursday jobless claims data will be released as well as consumer credit statistics, the Services Survey Information Revenue data and Federal Reserve money supply (M2), total assets and credit data.
Pivot: 2622
Support: 2622 2615 2604.25
Resistance: 2638 2648 2657
Scenario 1: long positions above 2622.00 with targets at 2638.00 & 2648.00 in extension.
Scenario 2: below 2622.00 look for further downside with 2615.00 & 2604.25 as targets.
Comment: the RSI advocates for further advance.
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