EUR/USD (Daily Trade)
In Thursday’s morning trade, the euro continued its weakness against the US dollar amid a strengthening dollar rally after US economic data that improved faster than anticipated for the past month raised investor expectations for stronger inflation, and also raised prospects for a Fed rate hike.
Throughout trading this morning, the US dollar index was observed to rise 0.36% to 94.19. The index rebounded from its previous low of 93.
The US Department of Labor said that its producer price index for final demand increased 0.3% last month.
In the 12 months to June, the PPI was up 3.4% after rising 3.1% in May. It was the biggest annual increase in recent years, fueling expectations the Fed could adopt a more aggressive stance on tightening monetary policy to control inflation.
The euro continued to weaken following reports that ECB members were divided in response to the central bank’s decision to raise interest rates.
Some policymakers said the increase was possible as early as July 2019, while others suggested the move was unlikely until next fall.
The EUR/USD currency pair fell 0.33% to $1.1672 in trading. Meanwhile USD/JPY was up 0.83% to Y112.24 and USD/CHF was up 0.30% to 0.9923.
Elsewhere the GBP/USD pair fell 0.42% to $1.3196.
US-China trade concerns are still in the spotlight on trade. The White House issued a follow-up tariff plan on 10% tariffs on $200 billion worth of Chinese imports that will be reassessed for effectiveness.
USD/CAD rose 0.26% to C$1.3148 after the Bank of Canada raised interest rates on Wednesday, and said it expects GDP to come in at 2.8% for the year.
Technically
Resistance : 1.1670 1.1700 1.1742 High / Low : 1.1679 / 1.1669
Support : 1.1664 1.1633 1.1536 Running Price : 1.1672
Comment : For intraday trade today suggest Sell at the level of 1.1630 stop loss at the level of 1.1670 target at the level of 1.1540.
XAU/USD (Daily Trade)
Gold prices fell in early Thursday trading, following gains in the US dollar, while the Trump administration’s threat of further tariffs on Chinese goods weighed on demand for the metal following copper prices slumping to nearly a year low.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell $10.60, or 0.37%, to $1,255.00 a troy ounce, just above a daily low of $1,247.80.
US-China trade concerns are still in the spotlight on trade. The White House issued a follow-up tariff plan on 10% tariffs on $200 billion worth of Chinese imports that will be reassessed for effectiveness.
The threat of further US tariffs on Chinese goods failed to bolster investor demand for safe-haven gold, as dollar strength continued to cap gains in the yellow metal.
Throughout trading this morning, the US dollar index was observed to rise 0.36% to 94.19. The index rebounded from its previous low of 93.
Dollar-denominated commodities such as gold are sensitive to dollar movements. A rising dollar makes gold more expensive for holders of foreign currency, reducing demand for the precious metal.
The renewed progress of the US trade competition gave a big negative reaction for other metals as copper, aluminum and nickel fell sharply on hopes that the trade war will be able to limit demand from China which is one of the biggest metal consuming countries.
Copper prices fell 3.40% to $2.74, Aluminum prices fell 1.23% to 2,062.00, while Nickel Futures fell 1.59%.
Silver futures fell 1.27% to $15.81 a troy ounce, while platinum futures lost 1.63% to $832.40.
Technically
Resistance : 1244.13 1246.40 1251.17 High / Low : 1243.70 / 1241.20
Support : 1242.67 1241.43 1240.27 Running Price : 1243.10
Comment : For today’s intraday trade, suggest Buy at the level of 1246.40, stop loss at the level of 1245.80, target at the level of 1248.40.
CRUDE OIL (Daily Trade)
Crude prices closed sharply lower in trading, ignoring a larger-than-expected drop in US crude inventories as OPEC output boosted, and the reopening of terminals in Libya dampened investor hopes for a global supply shortfall.
On the New York Mercantile Exchange, crude futures for July delivery fell 5% to settle at $70.38 a barrel, while on London’s Intercontinental Exchange, Brent fell 6.7% to trade at $73.56 a barrel.
US crude inventories fell by 12,633,000 barrels for the week ended July 6, lowering expectations for a decline of 4,489,000, according to data from the Energy Information Administration (EIA).
The big gain in crude supplies came as the import rate fell by 1.315 million barrels per day (bpd), although output remained flat at around 10.9 million bpd, the EIA said. Production shutdowns at Canada’s Syncrude, which has the capacity to produce 350,000 bpd of oil, continue to weigh on North American crude supplies.
Gasoline inventories fell by 0.649 million barrels, missing expectations for a decline of 0.750 million barrels, while distillate supplies unexpectedly rose by 4.125 million barrels, against expectations for a 1,200 million barrel increase.
The oil inventories report was largely bullish and failed to lift sentiment amid investor concerns about rising global supplies as OPEC output increased last month, while Libya started to resume export activity, adding as much as 0.7 million bpd back to the market.
OPEC output rose above 32.3 million bpd in June, up 173,000 bpd from the previous month, according to OPEC’s monthly report. This increase was due to an increase in Saudi output to levels not seen since the output cut agreement in 2016.
OPEC, in its monthly report, said it expects the pace of oil demand growth to slow, but still increase by 1.45 million bpd in 2019.
Technically
Resistance : 70.88 71.61 72.25 High / Low : 70.81 / 70.43
Support : 70.63 70.28 76.13 Running Price :70.75
Comment : For today’s intraday trade, suggest Buy at the level of 71.20, stop loss at the level of 70.80, target at the level of 71.80.
