2020-07-27 • Updated
The British pound is climbing up for the 7th day in a row. Will it keep rallying?
According to Richard Perry of Hantec Markets, the pound should continue moving up. Indeed, it has just crossed the key resistance at 78.6% Fibonacci level at 1.2816, that’s why it may surge to the next resistance at 1.3000.
The contradictory data from the United Kingdom came on Friday. The British retails sales surpassed analysts’ expectations and turned out 13.9%, while the forecast was 8.3%. The PMIs were better than anticipated as well. The GfK consumer confidence was -27, while the forecast was -25. Nevertheless, the British pound is rising further no matter what.
The greenback continues moving down for the 7th day straight. It gives an additional impetus for the further GBP/USD growth. The US data came worse than economists foresaw yesterday. Both PMIs, Manufacturing and Services, turned out worse than expected. The Services PMI even went below 50.0, that marked the industry contraction. Of course, it was the result of the fresh coronavirus outbreak in the country. New virus cases are still surging in most of the US states and weighing on the USD. Today the data was mixed. Core durable goods orders (excluding transportation items) were worse than the forecast, while durable goods orders came better. They increase by 7.3%, while analysts anticipated 7.0%.
In the long term the British pound highly depends on the Brexit talks. The sooner the EU and the UK reach an agreement, the better for the pound sterling. Also, the GBP is really sensitive to the overall market sentiment. Keep your finger on the pulse!
GBP/USD is moving upward to the key psychological mark at 1.3000. If it breaks it through, it may surge higher to the 100.0% Fibonacci retracement level at 1.3200. Support levels are at the 78.6% Fibo level at 1.2816 and at the 200-day moving average at 1.2700.
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.
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.
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