iFOREX Daily Analysis : January 10,2018
iFOREX | Jan 10, 2018 02:41AM ET
The US Dollar traded higher against other major currencies, with the US Dollar Index (USDX) closing 0.17% higher. This was in part attributed to expectations that the Federal Reserve could further increase rates this year, while market participants are carefully watching FOMC member speeches this week. The Japanese Yen (JPY) traded higher against even the strong Dollar as the Bank of Japan reduced the purchase of long-dated government bonds and led to theories that the stimulus policy could end sooner than previously expected.
Gold was under pressure by the stronger US Dollar and also higher US Treasury yields. Oil closed at a 3-year record high, supported by confidence in OPEC production cuts as well as data from the API indicating significantly lower US oil stockpiles than expected.
US equity indices closed mixed with technology stocks lower but strong financial and health care stocks pushing the S&P 500 (US 500) to a new record close level.
While Bitcoin was again down by around 2%, Ripple significantly declined from its recent high. Ethereum continued its rise to a new all-time high and establishing itself again clearly as the second most valued cryptocurrency by market capitalization, ahead of Ripple. JP Morgan CEO mentioned that he does regret calling Bitcoin a “fraud”, while maintaining that he is still not actually interested in the cryptocurrency.
On Wednesday France publishes industrial production statistics. The United Kingdom will release global trade, manufacturing output and industrial production data. In the US import/export price, wholesale trade and mortgage market data is due to be released. The Energy Information Administration (EIA) is due to publish its oil stockpile statistic.
EUR/USD
The EUR/USD [i] closed for the third consecutive day lower, despite positive economic data from Germany and steady unemployment figures in the European Union (EU). Some analysts explain this buy expectations that the US Federal Reserve would raise rates, while the ECB could be concerned about the strength of the Euro.
On Wednesday France publishes industrial production statistics. In the US import/export price, wholesale trade and mortgage market data is due to be released.
Pivot: 1.1955
Support: 1.191 1.188 1.186
Resistance: 1.1955 1.198 1.2
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Scenario 1: short positions below 1.1955 with targets at 1.1910 & 1.1880 in extension.
Scenario 2: above 1.1955 look for further upside with 1.1980 & 1.2000 as targets.
Comment: the RSI is capped by a declining trend line.
Gold
Gold [i] further retraced on Tuesday as the stronger US Dollar and expectations that central banks globally could tighten monetary policy as the Bank of Japan reduced its bond purchase program. Higher US Treasury yields put the safe-haven metal additionally under pressure (US T-Bonds ETF -1.37%).
As inflation is one of the key aspects for central banks to determine monetary policy, gold traders might want to keep an eye on the US import/export prices published on Wednesday and the Consumer Price Index (CPI) due on Friday.
Pivot: 1320
Support: 1309.5 1306 1300
Resistance: 1320 1326 1330
Scenario 1: short positions below 1320.00 with targets at 1309.50 & 1306.00 in extension.
Scenario 2: above 1320.00 look for further upside with 1326.00 & 1330.00 as targets.
Comment: the RSI is mixed to bearish.
WTI Oil
WTI oil [i] traded significantly higher and left the previous May 2015 high behind and reached now a 3-year high, a level last seen at the end of 2014. Concerns that US production could soar above a 47 year record, could not stop the price rally over confidence in OPEC supply cuts. Data from the American Petroleum Institute (API) pushed the prices even higher as crude oil stockpiles fell by 11.190 million barrels, which was significantly higher reduction than anticipated.
On Wednesday the Energy Information Administration (EIA) is due to publish its oil stockpile statistic.
Pivot: 62.22
Support: 62.22 61.65 61.1
Resistance: 63.35 64 64.5
Scenario 1: long positions above 62.22 with targets at 63.35 & 64.00 in extension.
Scenario 2: below 62.22 look for further downside with 61.65 & 61.10 as targets.
Comment: the RSI advocates for further advance.
US 500
US equity indices [i] closed mixed. The S&P 500 (US 500) and Dow Jones Industrial Average (US 30) reached again record levels, however the NASDAQ (US Tech 100) closed lower as especially chip maker and design companies were under pressure. AMD closed 3.91% lower as it was confirmed that its CPU designs were to some extent also affected by the “Spectre” security vulnerability.
The traditional stock indices Dow and S&P 500 closed higher supported by strong performance of bank (US Banks ETF +1.37%) and health care (US Health Care +1.14%) stock, while analyst also point out optimism about the upcoming earnings season.
On Wednesday the Mortgage Bankers' Association (MBA) is due to release its index data, followed by import and export prices and wholesale trade statistics.
Pivot: 2743
Support: 2743 2735 2726
Resistance: 2770 2780 2790
Scenario 1: long positions above 2743.00 with targets at 2770.00 & 2780.00 in extension.
Scenario 2: below 2743.00 look for further downside with 2735.00 & 2726.00 as targets.
Comment: the RSI advocates for further upside. The index is breaking above an ascending triangle pattern intraday.
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