The price of crude oil rose slightly after Gibraltar released the oil tanker that was captured a few weeks ago. This decision will likely ease tensions between London and Tehran, which have been having a difficult time over the past few weeks. It was captured because of allegations that it was transporting crude oil to Syria in violation of European Union sanctions. Gibraltar said that Tehran has offered assurance that the tanker won’t violate the sanctions. This tanker news means that Iran will likely release a UK vessel that it captured a few weeks ago. Later today, the market will receive the monthly oil report from OPEC.
The US dollar remained relatively strong following retail sales data released yesterday. In July, the retail sales rose by 3.45% while core retail sales rose by 1.0%. These were excellent numbers, coming at a time when investors expect the market to ease. The Philadelphia and New York manufacturing data were also better than expected. On the other hand, manufacturing and industrial production data from the Federal Reserve were worse than initially expected. Later today, the market will receive the building permits, housing starts and the consumer expectations and current conditions data from Michigan University.
Sterling declined after Brexit discussions continued. Yesterday, Labour Party leader, Jeremy Corbyn appealed to other UK parties to form a coalition with the goal of stopping Boris Johnson’s no-deal Brexit. In a letter to rival parties, he asked the opposition members and some conservatives to support him in a goal to oust Johnson. As a result, he would become the caretaker Prime Minister. This idea was rejected by most of the people he wrote to. The chart below – from Bloomberg – shows the potential scenarios on Brexit going forward.
Meanwhile, investors will today continue focusing on General Electric, after the company was accused by a forensic investigator for accounting manipulation. In a report, Harry Marcopolos, said that the company was using Enron-like accounting strategies to deceive investors.
EUR/USD
On Wednesday, the EUR/USD pair crossed the most important support level of 1.1163. After this, the pair continued moving lower, fueled by strong data from the US. The pair is now trading at 1.1100, which is also an important technical and psychological level. It is slightly below the 38.2% Fibonacci level and is slightly below the 14-day and 28-day moving averages. The RSI is trading slightly above the oversold level of 30. The pair will likely continue moving lower
GBP/USD
Yesterday, the GBP/USD pair declined sharply from a high of 1.2150 and reached a low of 1.2073. In the Asian session, the pair moved up slightly and is currently trading at 1.2087. On the hourly chart, the price is slightly above the 14-day and 28-day moving averages. The RSI has continued the downward trend from a high of 80 to the current 50. The pair will likely continue moving lower, to test the important support of 1.2050.
XBR/USD
The XBR/USD pair started moving lower on Wednesday when it reached a peak of 61.23. Yesterday, the pair reached a low of 57.36. On the hourly chart, the pair is slightly above the 23.6% Fibonacci Retracement level. The pair is along the 14-day and 28-day moving averages while the RSI has been moving higher. The pair will likely see significant movements in either direction after OPEC releases its monthly report.
