› MARKET REVIEW AUG 6 - AUG 10

MARKET REVIEW AUG 6 - AUG 10

EUR/USD

Eurozone will not please us with the volatile news this week, only on Thursday, there will be the ECB monthly report on the current state of the economy in the EU. Nothing new is waiting for the investor in this report, the regulator has made it clear that its policy remains unchanged at the moment.

The US, having reported about the labor market last Friday, will publish data on inflation this week. It is worth noting that expectations for "non-farm" did not materialize, but the indicator is above 150,000, which is quite enough. But salaries have grown according to expectations, which is very good, because the faster the salary increases, the more people will spend money. Consequently, inflation will be able to show better dynamics.

Economists forecast the acceleration of US inflation in July, which will further increase the chances of raising the Fed's interest rate in September (at the moment the market is already laying such a scenario in the US dollar). The release of US inflation will take place on Friday, less volatile news will be released earlier. Among them are the number of open vacancies in the labor market on Tuesday, the stock of crude oil and its products on Wednesday, the producer price index and the number of initial applications for unemployment benefits on Thursday.

Also from today, the first part of the Iranian sanctions will come into force, which will affect the metals market including gold, steel, and aluminum. The Islamic government will be prohibited from buying American currency as well.

Key resistance in the pair is 1.15, there were hints on its tests, but the bears in the pair are not strong enough yet if the expectations of accelerating US inflation are confirmed, this line can be taken.

MARKET REVIEW AUG 6 - AUG 10

GBP/USD

British Prime Minister Theresa May did not find support in the European Union with a "soft" version of Brexit. The option of Great Britain's exit from the EU without benefits is increasing every day. The Sunday Times published an article that says that the British ministers have already taken up the issue of duties while leaving Euroblock without concessionary terms. Belgium and the Netherlands can serve as transfers and legalizations of British goods to the EU.

In such a stressful state, the pound sterling can "feel its way" after the release of GDP for the second quarter. The growth is expected in the quarter and annual rate, although a decrease of 0.1% is expected in the monthly rate. This will be the first estimate of GDP, as a rule, it is the most volatile, therefore it is worth paying attention to this release on Friday. The growth of business investment under conditions of uncertainty for Brexit is not to be expected.

MARKET REVIEW AUG 6 - AUG 10

OIL

The United States intends to ensure the compliance of the sanctions to the full extent, which will enter into force on Tuesday at 12:01 pm (on the Eastern time). "It is an important part of our efforts to overcome Iranian malignancy," said Secretary of State Mike Pompeo. "The US will apply these sanctions."

Sanctions will affect the trade in gold, precious metals, coal, industrial software. Also starting this week, the United States will reconsider sanctions on purchases of the US dollar by the Iranian government.

The US reminded other countries that they should stop buying and importing Iranian oil since early November this year. Otherwise, they will face additional financial measures of the United States. Which ones have not been specified yet.
The Secretary of State noted that Iran would need "huge changes" to get out of the sanctions this time. "They have to behave like a normal country," Pompeo said, and called the Iranian leaders "bad actors."

Under such conditions, black gold is unlikely to be allowed to "fall" in price significantly. After all, now market participants are forced to look for another supplier instead of Iran, which can reduce the supply in the market as a whole significantly. Consequently, it will lead to the rise in the price of raw materials.

On the other hand, the US trade war with China, which is gaining momentum, could reduce the demand for oil products. Gasoline, diesel and so on, which on the contrary can reduce the price. It is necessary to monitor the situation in the world closely, only after this you can determine the direction of the price.

MARKET REVIEW AUG 6 - AUG 10

Gold

Gold continues to decline moderately, the level of 1220.00 was not taken immediately, but still could not resist the support. The next stronger psychologically support level is 1200,00. The round price, if it is taken, may force gold miners to reconsider the feasibility of mining. As history has shown, at the end of 2016, when the price dropped to 1120.00 US dollars per troy ounce, gold miners began to strike and stopped mining. After that, the asset grew by $ 100 per month. A similar situation is approaching.

Moreover, the trade war which is gaining momentum will support the asset. Last Friday, the Chinese Ministry of Finance promulgated new tariffs for 5,207 American goods worth of $ 60 billion. This step was a response to the proposal of US President Donald Trump to raise tariffs from 10% to 25% on Chinese imports of $ 200 billion. As expected, China will not give up, they have something to answer. But how far are two leading economies of the world ready to go? After all, while the two countries are at war, even at trade one, the partner countries suffer from this.

MARKET REVIEW AUG 6 - AUG 10


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