The USD weakened further against a number of its counterparts, as US president Trump stated in an interview that he is “not thrilled” with the Fed hiking rates and that it should do more to help him boost the economy. He also accused Europe and China of manipulating their own currencies. The markets proved sensitive to fears, that Trump may weigh on the Fed’s policy however currently, analysts reassure that Fed officials do not seem to be influenced by President Trump and we share that view. The USD weakened as mentioned and should there be further headlines about the issue we could see it weakening further.
EUR/USD rallied yesterday and during today’s Asian session, breaking the 1.1482 (S1) resistance line (now turned to support) and testing the 1.1537 (R1) resistance level. We may be seeing the pair stabilising today even correcting somewhat, as the RSI indicator in the 4-hour chart is at the reading of 70, implying an overcrowded long position. Should the bulls continue their run today, we could see the pair breaking the 1.1537 (R1) resistance line and aim for the 1.1623 (R2) resistance level. On the other hand, should the bears dictate the pair’s direction we could see the pair breaking the 1.1482 (S1) support line.
The US not to give concessions to Turkey for pastor’s release
US president Trump said that he will not make any concessions to Turkey in order for the latter to release US citizen, pastor Brunson. He also stated that he wasn’t concerned that higher steel and aluminum tariffs imposed on Turkey would have a negative effect on Europe. The statements coincided with shots being fired on the US embassy in Ankara on Monday, an incident indicative of the tense relationships between Turkey and the US. Also, analysts, are concerned over a possible spillover of the issue in the economies of other emerging markets, however, we currently consider the circumstances of the Turkish crisis as very specific. USD/TRY remained relatively unimpressed on Monday, however further developments on the matter could give rise to volatility.
USD/TRY continued to trade in a sideways manner yesterday between the 5.9500 (S1) support line and the 6.2800 (R1) resistance level. We see the case for the pair to continue to trade in a sideways manner should there be no further fundamental surprises. It should be noted that the pair seems to look for direction to open its next leg, as the RSI indicator in the 4-hour chart remains near the reading of 50. If the pair comes under selling interest we could see it breaking the 5.9500 (S1) support line, while should it find fresh buying orders along its path we could see I breaking the 6.2800 (R1) resistance level.
In today’s economic highlights:
In the American session, we get Canada’s Wholesales growth rate for June and later on the API weekly crude oil inventories figure. Also please note, that New Zealand’s milk auction figure is due out today.
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