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USDIndex at 94.30 – Next Support at 97.30

Market Analysis
2017-07-18_16-33-28

USDIndex, Weekly

A weak round of U.S. June export price data was noticed, thanks to a surprising food price drop despite a drought-related late-month grain price spike that extended into early July. Import prices were less weak than expected however, due to a restrained oil price decline and a small rise for import prices ex-petroleum.  An observation of the last year’s skewing of price strength toward exports with today’s reverse-twist, seems that as oil prices continue to fall since February, following the climb over the prior year from a trough in February of 2016. Despite 0.2% headline June export and import price drops, some support can be established for prices from declines in the value of the dollar since December, alongside recovering growth abroad and stabilization in global inventories, though the boost to oil prices from OPEC production restraint has been capped by soaring U.S. shale output. Export prices ex-agriculture and import prices ex-petroleum are both poised for 2017 gains of 1%-2%, following respective 2016 increases of 1.4% and 0.2%, but big respective declines of 5.9% and 3.7% in 2015, 2.8% and 0.1% in 2014, and 0.4% and 1.1% in 2013.

Meanwhile, U.S. equities were unmoved following the import and export price figures, which were both a bit softer than consensus forecasts. US equities were trading mixed today mainly due to the U.S. abandonment of ACA healthcare reform following two more Republican defections overnight, leading Trump to confirm that he always backed allowing Obamacare to fail before replacing it. Dollar index sank 0.65% to 94.55 with lower U.S. yields as the Trump reform agenda was apparently stymied, though this could revive energy for a more consensual tax package. The Dow is 40-points lower, S&P sank 5-points and NASDAQ is 16-points lower in pre-market trade. UnitedHealth rallied 2% after firmer earnings, guidance. After the 0.2% drop in import/export prices, the NAHB housing market index is on tap next.

Next Support Levels for USDIndex can be set at : 93.70 , 93.00 and 92.50 .

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Andria Pichidi

Market Analyst

HotForex

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