iFOREX Daily Analysis : December 15,2017
iFOREX | Dec 15, 2017 05:15AM ET
The US Dollar traded slightly higher against a basket of major currencies (US Dollar Index - USDX) in part due to the dovish policy outlook of the European Central Bank (ECB) as it signaled that no interest rate hikes are planned and current market support programs are to be continued.
The Turkish Lira (TRY) weakened almost 2% against the Dollar as the central bank raised the rates only by 50 basis points, whereas according to a Reuters survey market participants expected a 100 point rise.
Oil recovered slightly as OPEC confirmed that the compliance with production cuts of its members was at a year high. Gold traded unchanged as higher Treasury yields could have put some pressure on the safe haven, the renewed uncertainty about the US tax reform could have pushed demand.
US equities traded lower despite positive retail sales and lower jobless claims numbers. Bank and biotech stocks were hit the strongest. Disney traded higher as the deal of them acquiring 21st Century Fox was confirmed.
Bitcoin traded reached again the $17,000 level after falling below $16,000 on Thursday. Other cryptocurrencies such as Ethereum and Litecoin were trading lower. Over the time-frame of one week Bitcoin is however only 2% up, compared to 50% plus for Ethereum. The Cryptocurrency Index (CRIX) which compounds the performance of multiple cryptocurrencies, indicates a rise of over 17% over the time frame of just last week alone.
On Friday Empire State General Business Conditions level, Industrial Production, Capacity Utilization and Foreign Demand for Long-Term U.S. Securities level statistics will be released. Canada publishes manufacturing sales statistics.
EUR/USD
The Euro was initially stronger on unclear signals on the final touches on the US tax reform in the senate. Statements from the ECB to keep current rates and bonds purchase programs running. The rebound of the EUR/USD below the 1.18 threshold was supported by strong data from the US, where retail sales were up by 0.8% (expected +0.3% / previous +0.2%) as well as lower new jobless claims at 225 thousand (expected 239 thousand / previous 236 thousand).
On Friday besides industrial and business conditions statistics in the US the foreign demand for long-term US securities will be published.
Pivot: 1.181
Support: 1.181 1.186 1.19
Resistance: 1.176 1.173 1.1715
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Scenario 1: short positions below 1.1810 with targets at 1.1760 & 1.1730 in extension.
Scenario 2: above 1.1810 look for further upside with 1.1860 & 1.1900 as targets.
Comment: the RSI is mixed to bearish.
Bitcoin
Bitcoin recovered in early Friday trading and reached again the level of $17,000, while other cryptocurrencies such as Ethereum and Litecoin traded lower after days of rallying up. Over the time-frame of one week Bitcoin is however only 2% up, compared to 50% plus for Ethereum. An analyst from Deutsche Bank (DE:DBKGn) attributed part of the reason for Bitcoin's current popularity to Japanese private investors switching from stocks to cryptocoins. After Interactive Brokers, now Goldman Sachs (NYSE:GS) announced that it will request a !00% margin on some Bitcoin futures trades as Cboe launched futures on Sunday and the CME is due to launch Bitcoin futures on the coming Monday.
Pivot: 16361.1
Support: 116697 16361.1 15506.9
Resistance: 18250.2 18764.3 19278.4
Scenario 1: the upside prevails as long as 16361.07 is support.
Scenario 2: below 16361.07, expect 15506.86 and 14998.41.
Comment: the RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the pair is trading above both its 20 and 50 MAs (respectively at 16735.37 and 16624.81).
WTI Oil
Oil stopped its fall and slightly recovered on Thursday amid mixed market signals. The IEA (International Energy Agency) estimated that in 2018 oil supply could exceed demand, fuelled by increasing US production. The OPEC tried to reassure the market of its commitment to the agreed production cuts as advised the public, that production compliance was at a year high. On Friday the Baker Hughes oil rig count for the US will be released.
Pivot: 56.1
Support: 56.1 55.81 55.5
Resistance: 57.25 57.65 58.05
Scenario 1: long positions above 56.10 with targets at 57.25 & 57.65 in extension.
Scenario 2: below 56.10 look for further downside with 55.81 & 55.50 as targets.
Comment: the RSI is mixed to bullish.
US 500
US equity indices closed lower on Friday as Republicans are arguing about the actual implementation of the tax bill, which the Trump administration tries to present as a major win. Cyclical (US Cyclicals ETF +0.39%) and real estate (US Real Estate ETF +0.04%) stocks were up, while most other economic sectors were down especially biotech (US Biotech ETF -1.47%) and bank (US Banks ETF -0.98%) stocks. Disney closed 2.84% higher as a deal of the acquiring 21st Century Fox for $52.4 bn. was confirmed.
On Friday Empire State General Business Conditions level, Industrial Production, Capacity Utilization and Foreign Demand for Long-Term U.S. Securities level statistics will be released.
Pivot: 2667.5
Support: 2653.5 2646 2639
Resistance: 2667.5 2675 2680
Scenario 1: short positions below 2667.50 with targets at 2653.50 & 2646.00 in extension.
Scenario 2: above 2667.50 look for further upside with 2675.00 & 2680.00 as targets.
Comment: the RSI advocates for further downside.
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