The US economy was expanding at its fastest pace in over two years, registering an annualised GDP growth rate of 3.1% in the second quarter.
The Treasury Secretary Steven Mnuchin also expressed a positive outlook on the economy in a forum last night, saying that he expects growth to be between 2.9% and 3.2% annually over the next ten years. Mnuchin's estimate is still below President Trump's assumption of a growth rate of 5-6%, which is largely based on the successful implementation of his massive tax cut plans.
Positive economic data buoyed the US stock markets, with the S&P 500 Index extending further into new highs. The US dollar index, however, retraced to the 93.0 area after hitting a one-month high of 93.4 yesterday. This could be a temporary pullback as a result of profit-taking activities. Precious metals had a relief rebound last night, but the magnitude of the rebound was not sufficient to change the direction of their downward trends. The immediate support levels for gold and silver could be found at around US$1,282 and US$16.78 respectively.
WTI crude oil prices retraced from recent highs, hitting strong resistance level of US$52.0 yesterday. It is currently trading in the 51.3 area. US$52.0 is the 78.6% Fibonacci extension level, thus a strong resistance level in the near term. Technically the oil price is still riding an uptrend, with both its 10-Day Simple Moving Average and SuperTrend (10,2) both sloping upwards. The momentum indicator RSI has reached the overbought zone of above 70%, suggesting some technical pullback is possible.
Asian equity markets were underperforming these last few days, dragged down mainly by Hong Kong and India markets. The Hang Seng index is facing strong selling pressure near the 27,300-28,000 area due to a recent property sector meltdown. Momentum indicator MACD is forming a 'bearish divergence' pattern, which is usually a leading bearish signal. The Hang Seng's immediate support level is at around 27,200, breaking below this level will pave the way for a deeper correction toward the next support at 26,800.