International Financial Markets: 21 March 2018

On Tuesday, leading indices wiped out some of the losses accumulated on the first business day of the new week. Investors were positive in anticipation of the Fed meeting at 20:00 today, at which the interest rate is expected to rise to 1.75%. The blue chip index Dow Jones advanced nearly half a percentage point and closed at 24727 points. The broad S & P 500 remained almost unchanged, adding 4 points. Technological NASDAQ rose 0.27 percent to 7,364 points.

In Europe, the leading stock also ended the day on green territory. The German benchmark DAX added 0.74% to its value and ended the trading session at 12307 points. The French CAC and the British FTSE grew by 0.57% and 0.26% respectively to 5252 and 7061 points respectively. 

In the precious metals market, the US dollar was strengthened, and gold wiped out 0.44% of its value. Light crude oil rose 2.56% to over 63 dollars, hit a three-week peak and its competitor Brent variety - by 2.34% to 67.68 dollars per barrel. 

Basic interest rate - United States

At 21:00 hours, US interest rate data will be published, expecting it to be raised by the Federal Reserve by a quarter percentage of 1.50% to 1.75%. Market participants will monitor any indication of tightening monetary policy for the remainder of the year. The initial forecast was to raise the interest rate by three times in 2018, but after a favorable economic assessment at the end of last month, speculation emerged that this could happen four times.

Tool in Focus - Citrix Systems Inc.

The Florida-based technology company in the United States is part of the S & P 500's broader index. Its stock moves over 50-day average and is rising. The stock declined by about 10 dollars in February, but the price was gradually recovered. The slower average of the MACD indicator is trying to break the faster average, which can be considered as a bearish signal, and lowering the price would be appropriate for entering into a long position, but investors can wait for the price to test the 50-day average.

USD / CHF

The 8-hour chart of the EUR / CHF currency pair has seen an upward trend since February, with quotations moving close to the support line and above the 50-year average. The MACD initiator is in a positive zone and we think it would be a good purchase to reach levels of about 0.9650 - 0.9700.

XAG / USD

With the 6-hour silver chart against the US currency, we see a formed downward channel, with the price movement currently below the 50-year average. The MACD indicator is in a negative area and we think it is appropriate to enter a short position to reach a price of about and below $ 16 an ounce.

Dow Jones

The movement of the Dow Jones Blue Chip Index has formed a triangle formation and we expect the price to break the line of support or resistance soon. The intersection of the two averages of the Stoastic indicator suggests that it is possible to follow the appreciation and recovery of the upward movement, which was interrupted at the end of January and the index went up to the psychological limit of 26,000.

The S & P 500 ended the 8-day winning streak

US stock indices recorded mainly declines on Friday after disappointing labor market data, which revealed a drop in employment in the country for the first time in seven years. The blue Dow Jones industrial average index fell by 6 points, while Chevron and Boeing contributed most to the losses. 

The broader S & P 500 index shrank 0.1%, with the losers in the primary consumer goods and telecommunications sector. Thus, the index ended the eight-day winning series - the longest four-year series - and a series of six consecutive record-breaking closures, the longest series since 1997. 

The Nasdaq composite tech index managed to see a slight increase of 0.07%. 

The US labor market has lost 33,000 jobs in September, largely due to the two major hurricanes that hit the country in the month. This is the first drop in US employment since 2010. Economists surveyed by Reuters expected an increase of 90,000 jobs. Despite the decline in employment, average hourly wage increased at an annual rate of 2.9%. The unemployment rate has shrunk to a 16-year low of 4.2 percent. Return on US Treasury bills jumped after data were released. This 10-year paper reached 2.362%, and two-yearly - 1.51%, the highest level since 2008. 

"We all knew the report would be confusing for the distortions of hurricanes Harvey and Irma," said Richard Pickirllo, managing director of PGIM Fixed Income, to CNBC. "Despite the distortions, the average hourly wage is rising and unemployment is shrinking, and I think the bond market is reacting to that."

The main US indices recorded strong increases for the week, rising by more than 1%.

Daily analysis of major currency pairs for September 4, 2017

European stocks closed with rallies for a third consecutive session on Friday, helped by the news that the European Central Bank will probably wait for December to unveil a plan to cut asset purchases.

The weaker-than-expected US job data also helped stimulate the positive mood of the stock markets as it reduced the likelihood that the Fed would raise interest rates again this year. Stoxx Europe 600 finished 0.6% up to a closing price of 376.14, recording 0.6% weekly growth. The European benchmark rose 0.8% on Thursday but still recorded a loss of 1.1% in August, marking a third consecutive month at a loss. On Friday, US stocks ended the week and the first trading day in September as profit as weaker-than-expected job rises could lower the Federal Reserve's desire to increase credit spending for 2017.

Dow Jones Industrial Average reported a 0.2% growth to 21,987.56, helped by General Electric Co., Chevron Corp. and Nike Inc., recording a weekly increase of 0.8%. The S & P 500 ended with a 0.2% rise, supported by the energy, commodities and finance sectors, registering a weekly 1.4% growth. Technological Nasdaq Composite Index rose 0.1% to a closing price of 6,435.33 points after briefly falling into negative territory. The index recorded a weekly profit of 2.7%, taking into account the biggest growth in December.

EUR / USD

The single currency recorded a decrease against the US dollar on Friday. The session started at 1.1909 and the euro bounced off the resistance at 1.1910. After a volatile session, the currency pair ended at 1.1864. If the pair continues to move down, we can expect a test at levels around 1.1735. On the upside, the euro will focus on the resistance at 1.1910.

Support: 1.1735; 1.1670;

Resistance: 1.1910; 1.2080;

GBP / USD

The British pound recorded a modest rise against the US dollar on Friday. The currency pair opened at 1.2928 and the pound added 26 pips. The chart continued to grow above the creeping averages, while the relative strength index remained neutral. If the upward direction persists, the pair will probably break the first resistance at 1.2980.

Support: 1.2840; 1.2780; 1.2700;

Resistance: 1.2980; 1.3100;

USD / CHF

On Friday, the US dollar recorded a volatile session against the Swiss franc. The currency pair opened at 0.9585 and finished 60 pips higher. Daytime extreme values ​​were reached at 0.9546 and 0.9652 respectively. If the bullish mood continues, there will probably be a breakthrough in the first resistance at 0.9700.

Support: 0.9555; 0.9450;

Resistance: 0.9700; 0.9760;

USD / JPY

The US dollar recorded a modest rise against the Japanese yen on Friday. The session started at 109.97 and finished 28 pips higher. The chart continued to grow above the creeping averages, while the relative strength index remained neutral. In the short term, positive moods prevail, with indicators going over their average lines.

Support: 108.80; 107.80;

Resistance: 110.20; 110.90;

* This material does not constitute a recommendation for the purchase / sale of securities.

The dollar appreciated against most currencies

There was mixed trading on US exchanges and the leading indices closed in red. The reason for shaking the markets was President Donald Trump's warning to North Korea that their threats would be "welcomed with fire and anger." Geopolitical tensions are set to be the main driving force of markets in the near future, while North Korea's nuclear weapons provocations are not diminishing.

During the day, the Dow Jones declined by 60 points, but at the end of the session ended with 33.08 points lower at 22118.42. The CBOE Volatility Index (VIX), which measures the "fear" in the markets, rose 11%, indicating volatility in market participants. The broad S & P 500 ended the day with 0.24 percent down to 2480.91 points, while Nasdaq wiped out 0.21 percent of its value to 6370.46. European exchanges enjoyed good trading, and the German DAX index rose 0.28 percent to 12,292.05 points, while the leading English index FTSE 100 added 0.14 percent to its value and finished the trading session at 7542.73 points.

The day started weak for the dollar, but the US currency turned the trend and appreciated against most currencies. The JOLTs Job Openings economic indicator showed better data than expected, which supported the dollar and led to an appreciation against the euro to 1.1754, which was a fall for the EUR / USD currency pair by 0.36%. Against the backdrop of the rising dollar, oil fell 0.34 percent to $ 48.99 a barrel, while the world's Brent benchmark could be bought at a price of $ 52.02 a barrel, down by 0.29 percent. Geopolitical tensions between the United States and North Korea have pushed a lot of investors to gold, which is renowned as a refuge during market uncertainty. The precious metal rose 1.09% to almost 1261 dollars per troy ounce.

The main event during the day will be data on light crude oil reserves in the US as of August 4th. Stocks are forecast to decrease by -2100 thousand compared to -1527 thousand in the prior-year period. If expectations are justified, this will have a positive impact on the price of oil, and we may see a 50-barrel barrier over the psychological barrier.

Energy Select Sector SPDR Fund - Living Room

The fund that invests in energy companies is in a downward trend, and after the correctional upward movement we can use the opportunity to get into a short position. For confirmation, we'll wait for a low peak to make sure the correction completes its move, and we may open a deal on the next downside of the Stoastic indicator. For the first time we use the psychological limit below the local minimum at 63.25 at the level of 63 dollars per share. Reversing the price in the channel boundaries and rising above 66.80 will offset our forecast for deepening downward movement.

EUR / USD - 4 hours

The EUR / USD currency pair is experiencing a recurring pattern of breakthrough and a strong depreciation that could continue the price development with a new break below the last line of resistance. This gives a good entry level in a short position, but we need to be cautious about the support of 1.17. Stoastic is in downward direction without signaling any directional reversal. If you rise above the average trend line around 1.18, we can expect to increase traffic and reach a new local maximum.

OilUK - 4 hours

Brent crude oil has traded in a shrinking triangle since early August, and we suppose it is a sign that the market is expecting an important decision from the leadership meetings of the raw materials to take it in a clear direction. We can see breakthroughs below the bottom of the triangle around $ 51.60, but our expectations are for a resumption of appreciation after there is a break above the line of resistance of about $ 52.50 per barrel.

Nikkei 225 - Living Room

Japan's Nikkei 225 June index moves in a narrow range between 19900 and 20250, and the current level coincides with a 50-day average and is approaching 100 times, indicating market weakness and volatility in market participants. The ADX indicator, which measures the trend strength, is low, indicating a lack of trend and shows that it is not good to make investment decisions at this stage. An increase of more than 25 of the indicator levels will mean that the index has gone in a given direction, and we can see and test the 100 periodic average that acts as a support and a downsizing area.

Dow Jones recorded the 9th consecutive upward session

US stocks traded at higher prices and the Dow Jones index added values ​​to last week's level, recording the 9th consecutive session with growth and a new historic maximum at 22,118 points, which is 0.12 per cent more than closing at Friday. The S & P 500 climbed 0.16% to 2 480 points, the first record high since July 26, and the Nasdaq technology index surpassed the opening level by 0.51% and ended the day at 6 383 points.

European exchanges failed to follow the upward trend on world exchanges, with the Old Continent dominating mixed trading. Europe's blue chips sent the DAX index to red territory down 0.33 percent to 12,257 points while in the UK FTSE 100 beat market pressure and added 0.27 percent to almost 7,532 points. Negative results were the new sanctions imposed on North Korea, which would deprive the country of about $ 3 billion of annual export earnings. The worries about oil extraction from the OPEC and the US have been on the market, and this has led to a fall in the cost of raw materials. US oil was down 0.40% below $ 50 a barrel, while Brent dropped 0.13 percent to $ 52.26 a barrel. The price of gold was volatile on the first day of the week and the precious metal traded in narrow limits. At the end of the day sales were over and the market price reached $ 1 257.70 per troy ounce.

Economic data - China

China publishes trade data for July at around 6:00 am. The report was expected to show that the country's trade surplus has risen to $ 46.08 billion last month against a surplus of $ 42.77 billion in June. Actual data show a surge in trade surplus of $ 46.74 billion, which is more than predicted. It is assumed that exports will rise by 10.9% in July compared to a year earlier, after a 11.3% surge a month ago, but the real increase was 7.2%. Imports were expected to grow 16.6% after an increase of 17.2% in June, but the current figures show an increase of 11%.

Nucor Corporation

The steel maker is a good investment with a reliable dividend policy, but on the technical side, the market allows trade in the range, with any rebound from the $ 52 support line being a potential entry into a long position for values ​​over $ 60. Breaking over the upper limit of the channel would lead to a rapid appreciation to values ​​close to $ 70 per share.

USD / JPY

The currency pair USD / JPY shows the first signals of the downward movement reversal. After a strong impulse movement, the dollar rises above the downward trendline and breaks the 50-year average, where consolidation begins and, we think, preparing for a new appreciation. The RSI indicator is over 50%, which supports our expectations for future appreciation. When overcoming the resistance around 111.00, the goal of 111.70 / 120.00 should be reached. Returning quotes below 110.50 will override the analysis and resume the downward movement.

XAG / USD

The movements of silver outline a downward channel where there is a false breakthrough of the upper line of resistance and rebounding from it. Additional resistance is the 50-day average that puts pressure on the price of the metal. The Stochastic indicator is near the over-sold market, so we need to wait for a new rise cycle, where the price remains limited by the top line of the channel and the moving average. This will give us confirmation that buyers are weak and can go into a short position for values ​​of around $ 15 per troy ounce.

DAX

Since mid-June, the German index has adjusted for long-term rise and is below the 50-day average. The MACD technical indicator forms a hidden divergence, which is a trend-turning formation, and signals that it may follow a revival of the upward trend. The more aggressive of you may end up in a long position when rebounding from the channel support line but it is advisable to wait for a breakthrough over the canal and a test to confirm the downward trend reversal.