USD INDEX
The index had a significant down day with the USD sold off across the board, reaching its lowest level since May. Long term yields moving sharply lower was the early catalyst, followed by the FOMC minutes from July which indicated that the Fed may not raise rates in September, adding to the negative sentiment. Resistance at 99.58 with support at 98.68.
S&P 500
Today was a moderately positive risk-on day for stocks with the index finishing higher, and in so doing breaking a 3-day losing streak. The resilient showing was in typical contrast to the USDX’s sharp decline. Notwithstanding the green candlestick, note the lower low on the daily chart. Resistance at 7767 with support at 7695.
GOLD
The metal recovered sharply from yesterday’s decline with a resounding rally which went on to gain momentum following the “bearish” Fed minutes. The sizable drop in Treasury yields, coupled with the weak dollar - a combination that is particularly bullish for gold. That makes today’s market picture quite striking: USDX -0.8%, S&P +0.24%, Gold +4.1%. Resistance at $4522 with support at $4325.
BRENT OIL
The forward looking oil market found no reason to support either buyers or sellers as the status quo saw prices continue to hover close to the $90 mark. Although the straits of Hormuz remain closed, no new threats to either production or supply kept buyers at bay, while at the same time the lack of an imminent settlement or meaningful negotiations are keeping sellers away. Resistance at $91.06 with support at $88.86.
BITCOIN
The cryptocurrency had a very strong rally driven by a combination of factors. The sell-off in long term yields and the USD, both added to risk appetite with BTC reacting stronger than US equities. Add to this a large short squeeze where sellers closed their trades above the $65K-$66K area all contributed to BTC breaking above $69K with a significant 6% rally on the day. Buyers will aim for a sustained break of the $70K level which could well move the sentiment indicator into positive territory. Resistance at $69.6K with support at $64K.
