Stocks pause and USD gains ahead of Fed speakers

Summary:

• Stocks pause but remain near recent highs

• Volkswagen develops EV charging network in China

• USDIDX retests 200 day SMA ahead of Fed speak

• Cryptocurrency index slumps, Bitcoin cracks pivotal support

• Oil market outlook for 2019

After pretty impressive gains of late it appears that stock markets are having a pause and biding their time to see whether the recent relief rally has got more legs in it. The US500 dipped lower earlier this afternoon but buyers stepped in and the region from 2589-2624 remains potentially key resistance. European markets also began the day a little lower but this softness has firmed up throughout the session and the DE30 and UK100 are also back near recent highs on the European close.

Looking at individual shares, Volkswagen (VOW.DE) is trying to get ahead of its competitors in the thriving electric car industry. According to the recent Bloomberg report, the German carmaker teamed up with three Chinese companies in order to develop a network of fast-charging stations. A broad and deep network of charging stations may cause Chinese consumers to prefer Volkswagen cars to the other brands. The whole project is said to cost as much as €4 billion with Volkswagen owning 30% of it.

There been some notable weakness in the buck of late with the US dollar falling back against many of its peers in recent trade. Today, however things are looking a little better for the greenback which is attempting to stage a recovery and trading higher against most of its peers. The appreciation is small at present and the rise could be described as tentative, given that the size remains pretty small despite it being seen against the majority of other currencies. Speeches from Evans and Bullard come either side of Chairman Powell’s talk at the economic club of Washington this evening. These could have a significant impact on the US dollar. The USD index has pulled back to its 200 day SMA - an indicator which has done a pretty good job of calling the prevailing trend in recent years.

Major virtual currencies entered Thursday’s trading with substantial declines with Bitcoin falling more than 5%. As a result, the Bloomberg Galaxy Crypto Index has slid almost 8% so far today. Since the peak made in December 2017 the index, which tracks cryptocurrencies such as Ether, Litecoin, Ripple or Bitcoin, fell as much as 84%.  Bitcoin broke below the lower bound of the triangle pattern suggesting the price could be falling toward $3130.

We earlier posted an in-depth look at the market outlook for Oil in 2019, and this can be viewed in full here.