iFOREX Daily Analysis : January 30,2018
iFOREX | Jan 30, 2018 02:02AM ET
The US Dollar managed to climb higher with the US Dollar Index (USDX), which measures its performance against other major currencies, closing 0.27% higher. The Dollar thus recovered from its 3 year low closing level last Friday. After a stellar performance last week, the Pound (GBP) fell against the Dollar over continued uncertainty where the Brexit negotiations are heading.
Gold and oil fell in part due to pressure of a strengthening Dollar. Oil investors are concerned about excess US oil production, which could soon hit record high levels.
Higher Treasury yields put US equities under pressure with major stock indices trading lower, while Gold could also have been adversely affected by 3.5 year record high Treasury yields.
Most major cryptocurrencies such as Bitcoin and Ethereum fell by 5% or more on Monday. Crytpo coin investors are concerned about the recent theft at the Japanese Coincheck exchange, where allegedly cryptocurrency valued $530 million was stolen. Also in the headlines was a theft from IOTA wallets, which however is attributed to owners not following published standard security guidelines.
On Tuesday France releases Gross Domestic Product (GDP) and Consumer Manufactured Goods Consumption data, followed by the European Union also releasing GDP and Economic Sentiment, Industrial and Consumer Confidence data. Germany is scheduled to release Consumer Price Index (CPI) statistics. In the US the S&P/Case-Shiller House Price Index and Consumer Confidence (Conference Board) statistics will be published.
EUR/USD
The EUR/USD [i] dipped lower in Monday’s trading but managed later to recover most of the day’s losses. Import prices in Germany and producer prices in Italy were seen lower than previously, while the US showed mixed fundamental data. US Personal Income was up to 0.4% monthly (expected and previous +0.3%), while consumer spending at +0.4% monthly (expected +0.5% / previous +0.6%) and annual Core PCE Price Index at +1.5% (expected +1.6% / previous +1.5%) did not match expectations.
On Tuesday France releases Gross Domestic Product (GDP) and Consumer Manufactured Goods Consumption data, followed by the European Union also releasing GDP and Economic Sentiment, Industrial and Consumer Confidence data. Germany is scheduled to release Consumer Price Index (CPI) statistics.
Pivot: 1.2335 Support: 1.2335 1.23 1.227Resistance: 1.243 1.2465 1.2505 Scenario 1: long positions above 1.2335 with targets at 1.2430 & 1.2465 in extension. Scenario 2: below 1.2335 look for further downside with 1.2300 & 1.2270 as targets. Comment: the RSI advocates for further upside.
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Gold
Gold [i] prices visibly retraced on Monday with the strengthening of the Dollar, however at a higher magnitude than the Dollar itself. Solid economic expansion coupled with solid inflation makes traders expect the Federal Reserve to possibly act more proactive regarding its monetary policy. Solidly stronger US Treasury yields put additional pressure on the precious-metal safe-haven.
The FOMC rate decision on Wednesday as well as the Non-Farm Payrolls (NFP) on Friday could be especially interesting for gold traders this week.
Pivot: 1347.5 Support: 1338.75 1335 1328Resistance: 1347.5 1353.75 1357 Scenario 1: short positions below 1347.50 with targets at 1338.75 & 1335.00 in extension. Scenario 2: above 1347.50 look for further upside with 1353.75 & 1357.00 as targets. Comment: the RSI is mixed with a bearish bias.
WTI Oil
Oil [i] retraced from its 3-year high it reached last week. Notably the WTI-Brent oil spread continued to decrease as Brent declined more than WTI on Monday, whereas on Friday while both were in the green, gains in Brent did not match those in WTI. A stronger Dollar as well as US crude oil production being close to all-time high levels put the prices under pressure.
On Tuesday the American Petroleum Institute (API) will publish crude oil stockpile statistics, followed by the Energy Information Administration (EIA) on Wednesday.
Pivot: 66.1 Support: 65.1 64.9 64.35Resistance: 66.1 66.45 66.65 Scenario 1: short positions below 66.10 with targets at 65.10 & 64.90 in extension. Scenario 2: above 66.10 look for further upside with 66.45 & 66.65 as targets. Comment: the RSI is mixed to bearish.
US 500
US equity indices [i] closed noticeably lower on Monday with the most significant retracement in this so-far very positive year. Higher yields with the US 10 year Treasury at a 3.5 year high made investment in comparably riskier assets such as stocks less appealing. Energy (US Energy ETF (NYSE:XLE) -1.35%) and real estate (US Real Estate ETF -1.18%) stocks in particular were trading lower that session.
Wynn Resorts (-9.27%) shares were in free fall on Monday over the story of its CEO Steve Wynn being alleged of sexual misconduct. While some analysts see this as significant risk, others see the falling price as an interesting opportunity.
On Monday among others from McDonalds, AMD, SAP and Pfizer (NYSE:PFE) are due to publish earnings figures. On Tuesday reports from Boeing (NYSE:BA) and Nintendo are due.
Pivot: 2869 Support: 2844 2836 2830 Resistance: 2869 2879 2885 Scenario 1: short positions below 2869.00 with targets at 2844.00 & 2836.00 in extension. Scenario 2: above 2869.00 look for further upside with 2879.00 & 2885.00 as targets. Comment: the the RSI advocates for further downside.
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