iFOREX Daily Analysis : February 16,2018
iFOREX | Feb 16, 2018 06:36AM ET
The U.S. dollar fell to three-year lows against most major currencies, as new concerns over U.S. policies and a rising deficit shown by recent U.S. economic reports raise investor’s worries.
The dollar posted a sharp drop amid continuous concerns over the deficit in the U.S., which is projected to rise approximately by $1 trillion in 2019 following the announcement of infrastructure spending and large corporate tax cuts. Data on Thursday also pointed towards a rise in U.S. producer prices which gained by 0.4% last month. The U.S. dollar index, was trading close to its lowest since December 2014.
Elsewhere, the euro and the pound were higher on Thursday, with EUR/USD up 0.27% at 1.2537 and with GBP/USD gaining 0.23% to 1.4128.
The reappointment of Haruhiko Kuroda as Bank of Japan governor had a very insignificant impact on the yen, even though his leadership is seen to keep the central bank on a loose policy path.
After a recent drop below $7,000, the price of bitcoin has now jumped to over $10,000 again, according to trading figures on Coinbase and Blockchain.info. Some analysts see the psychologically key level as a trigger for new buyers to come into the market. The move was supported by an announcement from South Korean government that there is no is no intention to ban or suppress the cryptocurrency market.
On Friday, retail sales data is due from the U.K. at 9:30 GMT, followed by a series of housing starts and building permits data from the US at 13:30 GMT. The U.S. will also publish monthly and yearly figures on import and export prices. Later in the day, the focus will be shifted towards the Michigan consumer expectations report and the U.S. active oil rig count by Baker Hughes
EUR/USD
The EUR/USD finished Thursday almost 0.34% higher, just short of reaching 3 year highs, a level that was hit today during the Asian session.
The rise came due to a sharp drop in the USD and prospects of German political stability. Primarily, the boost came by widespread weakness in USD on the concern of a US deficit (fiscal and budget/current account). USD is also under pressure after terrible retail sales, weak consumer spending and a series of GDP downgrades.
A series of economic reports on housing, import and export prices and consumer sentiment are due from the US later in the day which could provide signs regarding the path of monetary policy that is to be followed by the Fed.
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Pivot:1.2455
Support:1.24551.241.236
Resistance:1.2591.26351.269
Scenario 1:long positions above 1.2455 with targets at 1.2590 & 1.2635 in extension.
Scenario 2:below 1.2455 look for further downside with 1.2400 & 1.2360 as targets.
Comment:the RSI advocates for further upside.
Gold
Gold prices traded almost unchanged on Thursday, fluctuating within a tight range as traders assess recent data pointing to rising inflation, something which could support the case for a faster pace of monetary policy tightening by the Federal Reserve.
Today, subdued trading activity is expected as China, Hong Kong, South Korea, Taiwan, Indonesia, Singapore, Malaysia, Philippines and Vietnam markets are closed because of the start of the new year. Asian markets
For Friday, gold traders will be watching closely the U.S. reports on import and export prices and consumer sentiment for further indications on the direction of the dollar.
Pivot:1348
Support:134813361330
Resistance:136613731378
Scenario 1:long positions above 1341.00 with targets at 1360.50 & 1366.00 in extension.
Scenario 2:below 1341.00 look for further downside with 1336.00 & 1330.00 as targets.
Comment:the RSI is bullish and calls for further advance.
WTI Oil
Oil prices gave back part of the rise posted on Wednesday, following recent data showing US oil producers continue to increase production while refinery activity drops, adding to a rise in supply in the weeks to come.
Oil producers led by Saudi Arabia and Russia aim to draft an agreement on a long-term alliance by the end of this year, United Arab Emirates energy minister Suhail al-Mazroui said on Thursday
OPEC and non-OPEC producers including Russia have been restraining production by a total 1.8 million barrels per day (bpd) in a bid to prop up prices under a deal that is to expire at the end of 2018.
Investors focus is currently shifted on reports which could further affect the price of the dollar along with Friday’s report of active US oil rigs by Baker Hughes.
Pivot:60.55
Support:60.5559.7558.9
Resistance:62.0563.2564.2
Scenario 1:long positions above 60.55 with targets at 62.05 & 63.25 in extension.
Scenario 2:below 60.55 look for further downside with 59.75 & 58.90 as targets.
Comment:the RSI advocates for further advance.
US 500
U.S. stocks gained on Thursday for a fifth straight session in volatile trade. The Dow rose to close above the 25,000 mark Thursday for the first time in nearly two weeks, the S&P 500 gained by1.21% and the Nasdaq gained by 1.58%.
So far this week, the Dow and the S&P are both up more than 4% and on track for their biggest weekly percentage rise since November 2016.
The rise was partly supported by wholesale prices which rose 0.4% in January, after a rise in oil prices, though core producer prices were also up by 0.4%. The figure was the latest view on inflation, following Wednesday’s consumer-price index.
For Friday, traders will be watching closely the U.S. reports on import and export prices and consumer sentiment for further indications on the direction of the dollar.
Pivot: 2688
Support: 2688 2652 2526
Resistance: 2763 2812 2838
Scenario 1: long positions above 2688.00 with targets at 2763.00 & 2812.00 in extension.
Scenario 2: below 2688.00 look for further downside with 2652.00 & 2626.00 as targets.
Comment: the RSI is mixed to bullish. The rising 50-period moving average should push the prices higher.
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