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Home > Articles > U.S. factory activity lowers in April, although Tariffs seem to be imposed in any way

U.S. factory activity lowers in April, although Tariffs seem to be imposed in any way


U.S. factory activity decelerated for a second consecutive month in April. Manufacturers blamed high commodity prices and suggested that tariffs on steel and aluminum imports could be the reason. Increasing raw material costs are the most recent indication that inflation tensions are building up and this could draw the attention of Federal Reserve officials who commenced a two-day policy meeting on Tuesday. U.S. Commerce Secretary Wilbur Ross on Tuesday said the one-month extension for the new steel and aluminum tariffs granted to the European Union was basically a onetime event and that it is not something that will be continuous. White House officials also confirmed quota system will be enacted for Imports of these materials. In our opinion, the US government may have to reconsider their commitment to the imposed tariffs as they could hurt the US economy instead of benefit from it. The USD could weaken on fears of new Tariff tensions and Inflation signs.

Gold moved higher during the Asian morning possibly due to the pre-mentioned news. On today’s European morning the shiny metal traded nearby the 1308.95 (S1) Support line which was seen as a resistance level in the previous days. For today, we see the case for the precious metal to continue to trade in a sideways manner, with some bullish tones as the tariffs matter resurfaces and does not seem to be ending anytime soon. Should the bulls take over we could see Gold moving higher towards the 1315.07 (R1) Resistance level and could even stabilise nearby that level. On the other hand, should the bears take the reins, we could see Gold moving lower breaking the 1308.95 (S1) Support line and moving even lower towards the 1304.72 (S2) Support barrier.

XAU/USD

XAU/USD 02/05/2018 | EconAlerts

  • Support: 1308.95(S1), 1304.72(S2), 1300.00(S3)
  • Resistance: 1315.07(R1), 1322.34(R2), 1332.15(R3)


Facebook to add a new feature

Facebook will add features for dating and for building long-term relationships on its social platform. Zuckerberg stated that their intention was, creating the dating service with an importance on privacy, a delicate subject for people who use online dating. It could be the case that Facebook is trying to show a concerned side towards its users and to improve the relationships with them, after the scandal over its handling of personal information. Facebook stock is currently trading around 172 USD per share. With the implementation of this new feature, the social network has the potential to move higher by attracting even more users.

On other news, EUR/USD moved lower yesterday due to unexpected weaker economic data and increasing doubts as to when the European Central Bank will normalise its monetary policy. During today’s European morning it is seen to stabilise around the 1.1978 (S1) Support level and displays a more bullish appetite somewhat. If the pair comes under buying interest we could see it heading towards the 1.2090 (R1) resistance level and even breaching it, moving higher and aiming for the 1.2281 (R2) Resistance level. On the other hand, if the common Currency is taken over by a selling interest, we could see it breaking the 1.1978 (S1) Support level and heading towards the 1.1882 (S2) Support barrier. It must be noted that EUR/USD has been trading above the current price since the 12th of January.

EUR/USD

EUR/USD 02/05/2018 | EconAlerts

  • Support: 1.19780(S1), 1.18817(S2), 1.17430(S3)
  • Resistance: 1.20900(R1), 1.22815(R2), 1.23402(R3)

 

In today’s other economic highlights:

From the European morning, we get the German Manufacturing PMI (Apr), the UK Construction PMI & the European Unemployment Rate & GDP.  In the US Session, we get the ADP Nonfarm Employment Change (April) & the Crude Oil Inventories. Last and most important the FOMC Statement along with the Fed interest rate decision.
As for Speakers: German Buba President Weidmann Speaks

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: FXGiants

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