Current Risks for Developed Economies
Oil prices are rising while the US government is on the verge of shutting down. How will it affect the market?
Trade Ideas June 28 – July 2
The main events of the week are Non-Farm Payrolls (NFP) and the OPEC meeting. NFP is one of the most impactful indicators, that’s why it usually grabs a lot of attention of traders. This time, the focus will be even bigger as the Fed will base its further policy decision on employment. OPEC+ meeting will decide whether to hike oil output further or not.
EUR/USD
After Fed’s hawkish decision in June, banks have started making bullish forecasts on the US dollar. Further hints at Fed’s tapering (cutting bond buys) in coming months will lift the US dollar. The better-than-expected NFP may push EUR/USD to early-April lows at 1.8000. The worse-than-expected NFP may drive the pair to 1.2000.
USD/CAD
USD/CAD jumped on the Fed hawkishness. However, the Bank of Canada has already tightened the policy, that’s why the CAD is better protected from unexpected Fed policy actions than other currencies. Besides, the Canadian dollar should gain on rising oil prices. The majority of the correction in USD/CAD is over, that’s why USD/CAD may drop to the 50-day moving average of 1.2200.
XBR/USD
XBR/USD (Brent crude oil) has hit the record high of $75 a barrel. The increasing demand for crude oil is likely to support the oil rally further to the psychological mark of $80 a barrel. On Thursday, OPEC+ members have to announce their decision on supply increases and give an outlook for the oil market.
IBM
IBM is a multinational technology company. Its hybrid cloud software gives the company a boost. The Q1 earnings report revealed that its cloud revenue grew 21% year over year. Since the company is trading at the local lows, it has a high potential to grow.
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