All U.S. Indices Posted Record Highs Together for First Time Since 1999 On the Back of Oil

The main beneficiary of yesterday’s session was the oil that dragged up the U.S. indices posting record highs all the three of them for the first time since 1999. The statement that oil producers will probably take measures to stabilize the oil prices at the next OPEC meeting at the end of September pushed the oil more than 5% up.The volatility in the FX pairs has been weak, however, the greenback ended higher, the euro has been mixed against the majors and the pound broadly lower.

Greenback Ended Thursday’s session Higher; Euro firmed
Thursday was a strong day for the U.S. dollar as the currency ended higher against the majors. The import prices rose 0.1% in July while the index was expected to plunge 0.3% while the jobless claims ticked slightly higher. However, these figures had little impact on the dollar. Today, the traders expect the retail sales figures for July. The single currency has been through a thin volatility session on Thursday in the absence of market driver news. Today, early in the morning the GDP growth of Germany triggered mixed emotions in the market. The German economy rose 0.4% the three months to June compared with the first quarter rose 0.7%, the best reading since Q4 2014. On the other hand, the annual GDP growth non-seasonally-adjusted climbed 3.1% from 1.5% before. Eurozone’s as a whole GDP growth and industrial output are coming out later in the day.

EUR/USD – Technical Outlook
The Eurozone economic calendar was light this week, creating a consolidation zone between 1.1070 support level and 1.1200 psychological resistance level. During yesterday’s session the EUR/USD pair plunged 0.36% and closed below the 200-daily SMA. From a technical point of view, on the 4-hour chart, the common currency is currently trading below the 50-SMA and is approaching the significant support area 1.1100 – 1.1120. The volatility of the pair is expected to be stronger today with the announcement of Eurozone's GDP. Our expectation is a decline in the aforementioned area and then a pullback towards the 1.1200 barrier. On the other hand, a break below the referred zone will open the way for the 1.1070 price level or moreover for the 1.1030 obstacle. Furthermore, the momentum indicators have turned slightly lower and they are moving in a neutral territory. The MACD oscillator is still following a positive path and is moving below its trigger line. The RSI indicator fell and is challenging the 50 level.

GBP/USD – Technical Outlook
The GBP/USD pair is looking bearish in the short-term, as well as in the medium-term, following the strong rebound on 1.3100 psychological resistance level. The pair fell 0.43% over yesterday’s period and challenged the 1.2935 price level while was spending most of the day trading below the 1.3000 strong resistance barrier. Technically, on the 4-hour chart, technical indicators are following a negative territory with some weak momentum. Going to a lower timeframe, the MACD oscillator is approaching its mid-level and is moving above its trigger line, while the RSI indicator is sloping upwards and is near the 30 level. Our suggestion is an upward potential move until the 1.3000 barrier which coincides with the 50-SMA and then a downward move is expected for retesting the 1.2935 support level. An alternative scenario is a penetration of the psychological level at 1.3000 and then the price will move on to the 1.3070 resistance level.

USD/CAD – Technical Outlook
The USD/CAD pair plummeted 1.5% since Monday and sent the price to one-month low at 1.2960 price level. The pair broke the ascending trend line to the downside over yesterday’s period and closed below the 50-daily SMA. Today, it continues to look bearish, as it continues to push towards the 1.2960 support level. The pair will continue its bearish movement if the price plunge below the mentioned level. The 4-hour chart, shows that the price is now moving well below its three SMAs (50-SMA, 100-SMA,200-SMA), whilst the technical indicators have corrected oversold readings and they are falling. For now, we would expect the pressure to remain to the downside and the next level to watch, over intraday basis, will be the 1.2925 and then the 1.286 region, a strong technical barrier.

WTI and Brent Crude Oil – Technical Outlook
Brent Crude Oil jumped nearly 5.8% at $46.80 per barrel as the Saudi oil minister stated that at the end of September OPEC meeting, they will discuss the market situation and any action needed to stabilize the prices. Moreover, the International Energy Agency forecasted that crude oil markets would rebalance in the next few months. The comments also bolstered the WTI Crude oil that lifted more than 5.5% at $44.60 per barrel. The technical structure suggests more bullish movement for both Brent and WTI Crude oil. The aggressive rally for both of them was started from the rebound on the $43.60 and $41.70 respectively.

The Brent Crude oil is currently trading above the 200-SMA on the 4-hour chart which remains with a more upside potential move if there is a successful penetration of the fresh almost one-month high. After the strong movement, there is also a possibility of retesting the support level at $46.20 and then continuation of the upward move until the $48.00 psychological resistance barrier.
Technical indicators on the 4-hour chart are biased higher and corrected extreme overbought readings. The MACD oscillator is currently moving above both, its zero and trigger lines, increasing the probabilities for further advance while the RSI indicator is moving near the 70 level.

The WTI Crude oil has a similar increase with Brent. On the 4-hour chart, the 200-SMA is ready to provide strong resistance to the bulls near the $45.00 obstacle which we will use as a rebound area for the week ahead. A successful break above the latter level will open the doors for the $46.20 resistance level. Technical indicators seem to be in agreement with the upward move.

Dow Jones, S&P, Nasdaq Ended Same Day at Records For First Time Since 1999
The sharp rise in the oil prices sent Wall Street stocks to hit record highs. All of the three U.S. indices ended positive creating all-time record highs for the first time since 1999. The S&P 500 gained 0.5% and topped at 2,188 with all of the index’s sectors closing positive, the only exception was the Real Estate sector that dropped 0.94%. It’s worth to mention that energy sector, that was the main driver of the U.S. indices, rose 1.47%. The Dow Jones industrial average picked up 0.64% or 117 points up at an all-time high at 18,615 while the Nasdaq composite index pulled up 0.46% or 23.81 points at 5,228, surpassing its previous high set at Tuesday's close.

From a technical point of view, the S&P 500 the last 4 weeks is moving between the 2,147 support level and the 2,188 resistance level. During yesterday’s session the index reached a fresh all-time high at 2,188 and if the price overcomes the latter level then the index will meet the 161.8% Fibonacci level of the last big downward move (June 23 high price until June 26 low price).

The DJIA index created a new all-time high over Thursday and the three SMAs (50-SMA, 100-SMA, 200-SMA) are still sloping upwards endorsing the further upside movement if there is a penetration of the 18,615 resistance level. If the price surpasses the latter level then the price will expose until the 18,770 barrier. Technical indicators are endorsing the bullish thought.

What to watch today
Eurozone’s GDP growth estimate for the second quarter is predicted to remain unchanged at 1.6% yoy and 0.3% qoq. June’s industrial production is predicted to show an increase of 0.4% mom from a drop of 1.2% before.

Going to U.S., the retail sales for July are forecasted to rise by 0.4% mom, slightly less that June’s increase of 0.5% while the retail sales ex-autos by 0.2% from a rise of 0.7% before. The producer price index for July is also coming out. The flash Michigan consumer sentiment is expected to show improved optimism in August of 91.5 from 90.0 before. Business inventories for June will be released as well.