› Market review, July 31- August 04, 2017

Market review, July 31- August 04, 2017


Reports from the US raise doubts concerning Fed's plans to tighten financial policy. On Friday, US GDP showed the forecasted data of 2.6%, which indicates the stability of the economy and its sustainable development. But after analyzing the dynamics of the US dollar, we can say that economic progress is now on the second place. Attention is paid to the ongoing scandals in the political environment, and even more so - to the head of state and his family.

But at this stage, the US is gaining preferences in the form of export growth and strengthening of financial conditions amid a weak USD. The ECB clumsily tries to hide their obvious concern about the active growth of the euro by 5% after the press conference of Mario Draghi.

With all that logical question rises: maybe all the scandals around the president are the work of Donald Trump himself? Because in the worst forecasts, the US dollar weakens, which benefits the economy and exports. It is necessary to expect reciprocal non-verbal intervention from the ECB, because the expensive euro brings to nothing the plans of the European Central Bank about the possible reduction or even termination of the stimulating program QE.

Market review, July 31- August 04, 2017


As predicted earlier, gold showed surprising dynamics of the uptrend last week. The catalyst for the rise of gold price was demand for the “save haven” assets. Too unstable situation with the US dollar, as geopolitical issues led to increased demand for gold. The price of gold by the end of the week remained stable.

After a slight correction to the levels of 1250, in the near future a third attempt will be made for the year of taking the psychological level of 1300.

Market review, July 31- August 04, 2017


Can OPEC control the situation on the oil market?
Earlier last week, the monitoring committee held a meeting in St. Petersburg to check the compliance of the pact with the cartel and allies. This meeting was of great importance, because, the participants of the oil agreement are unhappy. Prices in the last 2 months are falling, even if strict agreement on reduction is observed.

The level of production in Libya and Nigeria was raised at the summit, which are exempted from the agreement on the reduction of oil production. Allies of the cartel demand to remove privileges from these two countries. As a result of the meeting, there were no specific specifics concerning Nigeria and Libya.

This meeting bore fruit, and improved the mood of market participants, and raised the price of black gold by 3%.

OPEC has several more powerful levers to influence the price. The most important of which is Saudi Arabia's export decline. This is the control over the observance and stabilization of the oil price.

As for the active growth in oil prices, one should also take into account the seasonal factor, and the decline in production in the United States.

From the point of view of technical analysis, the price of oil approaches the important level of $ 50 per barrel. From which you should expect a correction.

Market review, July 31- August 04, 2017

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