China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
GBP managed to resist USD
2020-07-08 • Updated
Almost all currencies have loosened against the greenback today, but the GBP keeps rallying. How is it possible?
As you can see below: the Australian dollar and the Euro weakened today amid the overall risk-off market sentiment. It was caused by the fresh resurgence of new virus cases in the USA, Australia and some parts of Europe. However, the British pound stays strong, even despite its risk sensitivity. The main reason should be the encouraging data from the UK. The British construction PMI came better than analysts expected. It turned out 55.3, while the forecast was 46.0. Also, today the house price index bet estimates. They contracted only by 0.1%, while analysts anticipated the drop by 0.8%. By the way, the EU’s chief negotiator Michel Barnier arrived in the UK for another round of Brexit talks. Sooner they make an agreement, better for the British pound.
How to trade?
Traders are intrigued as GBP/USD is approaching the key resistance (or as they call it “game changer”) at the 1.253-1.254 area. It’s important because it will define the further EUR/USD movement. Will it continue its 6-day rally or drop following its peers? If it breaks this area through, bulls will win and the price may surge to the next resistance at 1.2595 and then even to the 200-day moving average at 1.2666. Otherwise, it will reverse and fall to the support at the 50-day moving average at 1.2420. The next barrier will be at 1.2300. Don’t lose your chance!
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.