US EQUITIES DECLINE SHARPLY AS INVESTORS BECOME CONCERNED ABOUT APPLE

US equities declined sharply yesterday, erasing gains made last week. This was attributed mostly to Apple, which declined by more than 5%. Investors were concerned that the company’s growth had peaked. There were also other worries about Goldman Sachs and General Electric. Goldman suffered the biggest decline since 2011 after Malaysia said that it will ask for a refund worth more than $600 million from the company. Today, declines in the US will likely spread in Europe. The Stoxx futures are pointing to a lower open.

Yesterday, sterling dropped sharply as traders continued to fret about Brexit. Today, traders will continue to focus on any news relating to Brexit as time runs out for Theresa May. There are concerns that even if a deal is made with the EU, the Prime Minister will not be able to marshal the support of her party, with a good number of her Conservative members remaining opposed to the Chequers plan. Today, traders will also focus on employment numbers from the UK. Wages plus bonus are expected to rise by 3%.

The euro continued the declines started yesterday and reached an intraday low of 1.1212. This was the lowest level since June last year and followed investor concerns about the European Union economy, Italy, and Brexit.

EUR/USD

The EUR/USD pair is trading at 1.1250 at the time of writing, which is higher than the intraday low of 1.1212. On the 30-minute chart, the 15-day EMA appears to be crossing the longer 30-day EMA. If the crossover happens, it is an indication that the pair could continue moving higher in the short term. The upward trend is confirmed by the Relative Strength Index (RSI), which is currently at 57 and rising. If the trend continues, it will likely reach the important resistance level of 1.1280, which is the 23.6% Fibonacci Retracement level.

GBP/USD

The GBP/USD pair moved up slightly to an intraday high of 1.2880. On the 30-minute chart, the pair’s 15-day EMA is crossing the 30-day EMA, which is a bullish signal. The RSI is at 63 and moving up, which is a bullish signal while the Bull’s Power indicator is rising too. The pair is likely to continue moving up in the short term and is likely to reach 1.2900, which is an important resistance level. However, this upward movement could be short-lived.

XTI/USD

Crude oil resumed the declines after the US President added pressure to Saudi Arabia and OPEC about supply cuts. This is after Saudi Arabia emerged as a key supporter of supply cuts with the aim of reducing the probability of oversupplies in 2019. WTI crude declined to an intraday low of $58.75. This was the lowest level since February this year. On the four-hour chart, the XTI/USD pair’s double EMA continue to show that the downward trend will continue. Today, the main focus in the oil market will be the OPEC monthly report, which will be released at 11:20 GMT.



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