18 May 2017 Daily Analysis
Special counsel to probe Trump-Russia, dollar crashes.
Another day of observed loss for the greenback as it hovers near six-months low against other major peers after US political crisis deepens and may likely to delay any efforts of President Donald Trump to implement his economic stimulus pledges. The US Justice Department has appointed former FBI director as special counsel to investigate possible collusion between Trump’s 2016 campaign team and Russia. The appointment of a special counsel was made after Trump abruptly dismissed former FBI director James Comey wo was previously investigating Russia’s role in US election. Media then reported that Trump may have interfered with federal investigation, a serious offence that could lead to his impeachment if verified. “Political instability has shaken up market’s perception towards the United States. Anyone would likely to halt their investment into the country if such headlines were smeared across all newspapers,” said Bart Wakabayashi, Tokyo Branch Manager of State Street Bank. The index had tumbled more than 5.8% thus far, despite widespread speculation that it would remained supported by higher prospect for an interest rate hike. Likewise, the dollar index last stood around 97.24, shedding an additional 0.70% during Asian trading hours. Against other major currencies, euro touches six-months high of $1.1174 while USD/JPY fell 0.50% to 110.88.
Peering into commodities market, crude oil dipped 0.35% to $48.90 as investors turned cautious over political risks in the United States. Meanwhile, overnight’s bullish report from the Energy Information Administration provides some support after crude oil inventories fell by 1.75 million barrels last week. Otherwise, gold price rose 0.33% to $1,261.70 as its demand increases due to higher perceived political risk in the United States.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
01:00 EUR ECB President Draghi Speaks
Today’s Highlight Economy Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 07:50 | JPY – GDP (QoQ) (Q1) | 0.3% | 0.4% | 0.5% |
| 09:30 | AUD – Employment Change (Apr) | 60.9K | 5.0K | 37.4K |
| 16:30 | GBP – Retail Sales (MoM) (Apr) | -1.8% | 1.0% | – |
| 20:30 | USD – Initial Jobless Claims | 236K | 240K | – |
| 20:30 | USD – Philadelphia Fed Manufacturing Index (May) | 22.0 | 19.5 | – |
DOLLAR_INDX
DOLLAR_INDX, H4: Dollar index has extended its downtrend following prior downward expansion of both MA lines after the formation of death cross. As the MACD histogram illustrate signification downward momentum, a closure below the support level of 97.05 would suggest an extension of its losses.
Resistance level: 97.55, 98.00
Support level: 97.05, 96.65
GBPUSD
GBPUSD, H4: GBPUSD remains traded within a sideways channel while currently testing near the top level of the channel. A breakout would signal a change in trend direction to move further downwards. Otherwise, retracement from this level would suggest GBPUSD to be traded lower within the sideways channel thereafter.
Resistance level: 1.2985, 1.3060
Support level: 1.2900, 1.2840, 1.2770
EURUSD
EURUSD, Daily: EURUSD extended its upward momentum after the formation of golden cross by both moving average line. As the MACD histogram continues to illustrate upward signal and momentum, it is suggested to move further up, towards the target of resistance level at 1.1260.
Resistance level: 1.1260, 1.1340
Support level: 1.1130, 1.0980
USDJPY
USDJPY, H4: USDJPY has extended its losses following prior formation of death cross by both MA lines. However, recent rebound from support level of 110.50 suggests USDJPY to be traded higher in short-term as brief retracement. Likewise, long-term trend direction still suggests USDJPY to extend its losses.
Resistance level: 111.25, 112.00
Support level: 110.50, 109.60
CrudeOIL
CrudeOIL, H4: Crude oil price remains traded within an upward channel while currently testing at the bottom level of the channel. A breakout from this level would signal a change in trend direction to move further downwards. Otherwise, a rebound will suggest crude oil price to be traded within an upward channel trend thereafter.
Resistance level: 49.90, 51.60
Support level: 48.75, 47.55
GOLD
GOLD_, H4: Gold price extended its gains following prior breakthrough of 50.0 Fibonacci level at 1254.75. With regards to MACD histogram that shows substantial upward signal, a closure above the resistance level of 1264.35 would suggest an extension of uptrend.
Resistance level: 1264.35, 1278.00
Support level: 1254.75, 1245.15