Daily Report (Market Drivers & Snapshot) – 16/04/2018

US vs Russian sanctions on the calendar, Dollar is looking for support from the retail sales.

Dow Jones 24460 (0.01%) / Dax 12465 (0.00%)
Oil $66.37/bbl
Gold $1344/oz
EZ: German WPI m/m actual 0.0% vs 0.4% expected.
North America: Retail Sales forecast 0.4%. Core Retail Sales forecast 0.2%.

US President Donald Trump announced precision strikes were taking place against Syria. “Today the nations of Britain, France and the United States of America have marshalled their righteous power against barbarism and brutality,” said Trump in an address to the nation. The conflict in Syria is hard to predict, the markets have to swallow a potential two-fronted geopolitical battlefield now: the risk of trade tensions with China and the risk of an outright escalation of military action against Syria (a conflict with Russia).

The current environment remains essentially on hold as it awaits clarification from the geopolitical uncertainty and stronger economic data from the US to sustain the positive tone of the FED outlook. Hawkish Fed and dovish ECB not enough for USD; today’s retail sales figures will have an impact on the dollar trend. If positive as expected we might get out of the 5 days stagnation in the currencies prices and the Gold. No major escalation is expected today from both the US and Russia, the crude oil prices might fade to lower consolidation.

 
Today’s Snapshot
CLK8 Last 66.37/bbl.

May crude oil closed lower on Friday setting the stage to a lower opening on Monday. If the geopolitical environment doesn’t escalate the crude oil prices will fade down and consolidate on lower level.

Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices is possible near-term. If May extends the rally off February’s low, the 62% retracement level of the 2014-2016-decline crossing at 70.46 is the next upside target. Closes below the 50-day moving average crossing at 62.65 would confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 67.45. Second resistance is the 62% retracement level of the 2014-2016-decline crossing at 70.46. First support is last Friday’s low crossing at 61.81. Second support is March’s low crossing at 59.91.

 

Written by:
Nehmat Harb
Financial Advisor

 

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