2019-11-11 • Updated
Sterling erased its post-election losses and rose to 1.3010 in the past week after the Bank of England Governor Mark Carney said on Wednesday that they may need to raise interest rates despite a weakening economy. It was a radical U-turn from its last week’s dovish commentary, so traders reacted accordingly. The pound got some additional support after British Prime Minister Theresa May won backing for her Brexit and austerity agenda thanks to decisive votes of the small Northern Irish party.
The current price action is clearly showing the characteristics of the bullish trending phase, but we would not recommend rushing into long trades in the near term. Britain enters a period of uncertainty negotiating its exit from the EU which should hurt the GBP. So, the US dollar will probably try to recoup its losses next week. The economic data coming from the US may help if the figures come out upbeat. There will be US manufacturing PMI, unemployment claims, jobless rate, average hourly earnings and, what is more important, NFP. You should also note in your diary the release of FOMC meeting minutes on Wednesday. The British pound might also be influenced by the data flow out of the UK. Manufacturing, construction, and services PMIs will be released at the beginning of the week. Then, you should particularly be focused on Friday’s economic releases (Halifax housing price index, manufacturing production and goods trade balance).
On the technical chart, GBP/USD reached 1.3030 but failed to climb higher. A break of support at 1.2920 (Thursday’s low) will allow us to target lower levels at 1.2865 (50-day SMA), 1.2795 (Fibo 23.6% traced from this year low). On the upside, the target at 1.3045/50 appears to be within reach. Only after the break of these levels, the pound will be able to rise higher.
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.
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
