Will the pound keep standing?
Services and Manufacturing PMIs are out on Wednesday at 11:30 MT time.
Daily News: a lot of comments
- Trade wars continue being a top topic in the economic world.
The German Chancellor Angela Merkel warns about a global financial crisis. The reason is trade wars. If the US imposes tariffs on cars from Europe, it will have a more serious proof than steel and aluminum duties. Mrs. Merkel said that countries need to cooperate to avoid the crisis. According to Reuters, China puts pressure on the EU to make a joint statement against the US. If two countries issue a joint statement against the US, it will lead to a real trade war. However, it’s unclear who will be the winner.
According to the WTO, the economic growth is “in jeopardy” because of the trade tensions between the US, China, and the EU. From October 2017 to May 2018, G20 countries have imposed 39 new “trade restrictive” measures including duties on imports. More tariffs will worsen the situation even more.
Clouds are gathering over the financial world. Trade wars and the financial crisis are near…
- The US dollar index is weak. It is trading below the psychological level of $94.50. Only positive economic data will be able to support the USD. A lot of data will be released today. If the actual ones are greater than the forecast, the index will recover. The resistance lies at $95. Otherwise, it will fall further. The support is at $94.20.
- The USD is weaker, other currencies are stronger. The pound is moving to the resistance at 1.3280. However, the trading isn’t extensive. The British currency needs an additional support. Today BOE Governor Mr. Carney will give a speech at 13:00 MT time. If he gives some positive clues on the economic conditions, the pound will strengthen further. Otherwise, GBP/USD will return to the support at 1.3180.
- Some comments on the oil market.
According to Goldman Sachs, the oil market will remain in deficit through the rest of the year despite higher OPEC production. Production losses would exceed an increase (anticipated 1 million barrel a day) in output from OPEC and its allies and would push inventories to very low levels. However, rising supply shocks will potentially threaten both further price rises and global economic growth.
Mr. Trump continues to communicate with OPEC through twitter.
Let’s see whether OPEC members read Trump’s twitter.
Today traders will pay attention to crude oil inventories data (18:00 MT time). According to the forecast, it will be a decline in the number of inventories. If the actual data shows a greater decline, the oil market will appreciate.
Up to now, Brent has been continuing trading within $77.55-$78.20. Traders are waiting for a signal from the oil data. If there is a greater decline, Brent will break the resistance at $78.20 and the next resistance will lie at $79.85. Otherwise, Brent will break the support at $77.55 and the next support will lie at $76.45 (50-day MA).
WTI is trading within $73.30-$75.20. The trading isn’t extensive, as traders are waiting for the data. In case of the greater decline, WTI will move to the resistance at $75.20, the next one is at $76.60. Otherwise, a break of the support at $73.30 is anticipated. The next support is at $72.15.
That’s all for today! Follow market news with FBS!
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