Trade Tensions weigh in on the markets
- Uncertainty and further developments regarding trade tensions set the trends in the markets yesterday. Especially contradicting messages coming out of the White House about possible new investment rules in the US, blurred the picture. The main issue seems to be concentrating on whether the investment restrictions in the US will apply only for China or worldwide. Both cases were supported yesterday from White house officials, providing confusion to the markets, while media mentions the 6th of July as a possible date for president Trump to announce the next moves of the US. The USD weakened against JPY during today’s Asian morning and should there be further escalation we could see it weakening even further.
- USD/JPY traded in a sideways movement yesterday. We see the case for the pair to continue to trade in a sideways manner today however some bearish tendencies may occur should there be further negative headlines about trade tensions. Should the pair be under selling interest we could see it breaking the 109.25 (S1) support line and aim for the 108.70 (S2) support level. Should it find buying orders along its path we could see it breaking on the upside the 109.75 (R1) resistance line and aim for the 110.25 (R2) resistance level.
EUR positive momentum continued
- Euro’s positive momentum continued yesterday, ahead of possible positive financial releases. The positive momentum was ignited from new assurances by Italian politicians on Friday that Italy does not plan to leave the EUR. On the other hand, risks arise from the German political stage as the migration dispute could destabilize the German government. The EU summit is to be held on Thursday and Friday and most probably will discuss the issue, however little results are expected. Should there be positive financial releases EUR could strengthen, however it may also remain fundamentally shaky.
- EUR/USD rose yesterday and during today’s Asian morning tested the 1.1715 (R1) resistance line. We remain quite hesitant to call for a rally on the pair as EUR’s vulnerability could distort the picture especially as the common currency showed signs of weakness with other crosses during today’s Asian morning. Should the pair come in a bears market we could see the pair breaking the 1.1640 (S1) support line and aim for the 1.1550 (S2) support area. If the bulls take over we could see the pair clearly breaking the 1.1715 resistance line and aim for the 1.1820 (R2) resistance hurdle.
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In today’s other economic highlights:
- In the US session we get CB consumer confidence indicator for June and the weekly API crude oil inventories figure. As for speakers please bear in mind that BoE MPC members Haskel and McCafferty as well as FOMC member Raphael Bostic and Dallas Fed President Kaplan speak.
EUR/USD
·Support: 1.1640(S1), 1.1550(S2),1.1470(S3)
·Resistance:1.1715(R1),1.1820(R2),1.1945(R3)
USD/JPY
·Support: 109.25(S1), 108.70(S2), 108.10(S3)
·Resistance: 109.75(R1), 110.25(R2), 110.75(R3)
