Former Trump lawyer Michael Cohen pleaded guilty in federal court

Daily Analysis - 22/08/2018

Trump's comments have negative impact on dollar

Cohen pleaded guilty in federal court In New York, to eight felony counts of bank fraud, tax fraud, and campaign finance violations. Cohen admitted that he was involved in a conspiring with some media company, it is said he was the publisher of The National Enquirer, to silence a Playboy model during the 2016 presidential election. The U.S. dollar continues down after President Donald Trump criticized the Federal Reserve and its monetary policy moves. The dollar dropped back to 95.0790 from of 95.7520, now the next support is at 94.80. The stock market went up while Trump’s comment as investors may act on the fact that the next interest rates may not be as hawkish as before. Now the equity indexes open the day a little higher than yesterday and gain more profit. At first half of the session, the S&P 500 Index went to a new record high.

Kiwi now is the strongest in Asia and the Aussie fell

Asia session was a little busy today, some second-liner macro news came out from the OZ economies. New Zealand’s Q2 retail sales went way above expectations and gave the momentum and the confidence that investors needed to support the Kiwi. On the other hand, the Aussie failed to rally up due to the Australian construction output data. The USDJPY went higher up to the 110.50 levels, despite the negative US dollar and Treasury yields. This week will remain, in fear of the data that are coming out especially from the European session. The key market driver will be once again the US-China talks. The NZDUSD key resistance level is at 0.6714 and the pair crossed the 10, 20,50 EMA with the sentiment looking strong up. We expect momentum during the USD FOMC Meeting Minutes.

EURUSD continues to look bullish

The pair is looking good and went up briefly to the 1.1600 level late on Tuesday although lost some momentum to the upside afterwards. US political problems kicked the greenback some more after US President’s former lawyer Cohen and campaign chair Manafort accused President Trump to be involved in a conspiracy that impacted the election. The news hit negatively the US Dollar Index and boosted the EUR on a new high. The day started with some minor retracement on the pair reaching the 1.1562 level. The next resistance level is at 1.1601 and if the price breaks that level we may see a trend continuation to the upside. Today we are anticipating the publication of the FOMC minutes later in the European session. After that, we will have the US housing sector and the release of July’s Pending Home Sales.

Iran Fears gave Oil price a boost

Oil prices rose slightly on Tuesday morning as many think an Iran supply shortage could have a more significant impact on oil markets than previously thought. The fears about the global economy’s health and the recent rout in emerging market currencies, elevate the threat of lower than expected demand. Commerzbank said in a note “Prices are being supported by the prospect of lower oil supply from Iran. In addition, The American Petroleum Institute (API) report stated an extra-large oil inventory draw of 5.17 million barrels of US crude oil inventories for the week ending August 18. The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday. The CAC-SEP18 price is now at 5420 and the next support is at 5445.64. The 50EMA is already penetrated on the 1H timeframe and we expect to see more momentum to the upside today. On the other hand, we see that on the daily timeframe there is a key resistance level at 5494.53 and we expect the price to bounce on that level.