The price of crude oil declined yesterday after Donald Trump said he was ready to meet with the President of Iran, Hassan Rouhani, in a deal likely to be brokered by Emmanuel Macron. In an interview, Macron said that he would work with both the Iranians and the US to replace the faltering deal that will incorporate the views made by the Trump administration. Macron also talked to Iran’s Rouhani, who said he was open to meeting with the Americans. Trump said that in case a deal was reached, the JCPOA signatories would be ready to provide financing to Iran, which has seen its economy weaken after the Trump administration started the maximum pressure campaign. Later today, the American Petroleum Institute (API) will release the inventory data of the coming week.
Investors will focus on Europe, where a number of countries will release important economic data. Germany will release the second preliminary reading of the second quarter growth. Investors expect the data to show that the economy expanded by an annualized rate of 0.4%. This will be lower than the previously-released 0.7%. On a QoQ basis, the economy is expected to have shrunk by -0.1%, which will be lower than the expected 0.4%. In France, investors will receive the consumer and business confidence data for August and from Sweden, they will receive the PPI and trade data.
Investors will also focus on the United States, where the Conference Board (CB) will release the consumer confidence data for August. Data is expected to decline from 135.7 to 129.5. This will likely be because of the ongoing trade war between the US and China. Consumers are generally worried that the tariffs announced by the Trump administration will increase the cost of doing business. On earnings, the market will receive the second-quarter results from companies like Bank of Nova Scotia, J.M. Smucker, Barnes & Noble, Eaton Vance, Veeva, Lannett, and Autodesk.
EUR/USD
The EUR/USD pair declined in overnight trading and is currently trading at the important support of 1.1100. This price is along the 23.6% Fibonacci Retracement level on the hourly chart. It is also slightly below the 14-day and 28-day moving averages. The ADX, which measures the strength of a trend, declined from a high of 45 to the current 23. The pair will likely continue moving lower but this will depend on the European and American data that will be released today.
XBR/USD
On Friday, the price of crude oil dropped sharply after the trade war intensified. Yesterday, the XBR/USD pair pared back those losses and reached a high of 59.55. In the American and Asian session, the pair dropped and tested a low of 57.95. On the hourly chart below, this price is between the lower and the middle lines of the Bollinger Bands while the RSI has remained along the 45 level. It is also along the 50% Fibonacci Retracement level. The pair will likely move in either direction depending on the news and the API inventory data.
EUR/GBP
The EUR/GBP pair moved slightly higher in overnight trading. The pair moved from a low of 0.9027 and reached an intraday high of 0.0.9100. On the four-hour chart, the price is slightly below the 50% Fibonacci Retracement level while the RSI has moved from the oversold level of 24 to the current 46. The pair will likely move to the 50% Fibonacci level of 0.9100 and then resume the downward trend.
