US Treasury Secretary Mnuchin stated that the US could impose more sanctions to Turkey, should it not free pastor Brunson. The statement was made as the Turkish crisis started to cool off and could create new volatility should there be a counterstatement. Qatar offered support for about 15 Billion USD however analysts state that the amount could prove insufficient for the Turkish economy. In the European theatre, Germany stated that it wants to avoid an economic melt-down of Turkey, while France seems to be willing to improve trade relationships. The Turkish finance minister Albayrak stated that there are no intentions to impose capital controls and that Turkey will come out stronger
from the crisis. Should there be new negative headlines (political or financial) about Turkey we could see the TRY weakening once again.
USD/TRY dropped yesterday breaking the 5.9500 (R1) support line (now turned to resistance) and stabilised below it. We could see the pair continuing to trade in a sideways manner today, however bearish tendencies may occur as the pair corrects a bit further. It should be noted that the pair may prove sensitive to any new headlines. Should the bulls take over the pair’s direction we could see it breaking the 5.9500 (R1) resistance line and aim for the 6.2800 (R2) resistance hurdle. On the other hand, should once again the bears be in charge we could see the pair breaking the 5.6700 (S1) support line and aim for the 5.4300 (S2) support barrier.
USD stabilises on US-Sino negotiations headlines
USD seems to be losing steam as headlines about new US-Sino negotiations are printed and a risk-on mood starts to slowly build up again. It should be noted though, that president Trump pushes for a better deal with China. Also, White House economic advisor Kudlow warned Beijing not to underestimate president Trump’s resolve to push for changes in China’s economic policies. As per analysts, the risk-on mood starts to weigh on the US Dollar while prompting some buyback of the EUR.
EUR/USD rose yesterday breaking the 1.1360 (S1) resistance line (now turned to support) and stabilised clearly above it. We see the case for the pair to continue to trade in a sideways manner while bullish tendencies could occur should the greenback be weakened, especially by an increased risk-on mood of the markets. Should the pair find fresh buying orders along its path we could see it aiming if not breaching the 1.1428 (R1) resistance line, while should it come under selling interest, we could see it breaking the 1.1360 (S1) support line aiming if not breaking the 1.1300 (R2) resistance level.
In today’s economic highlights:
In the European morning we get Eurozone’s final HICP rate for July and in the American session, we get Canada’s CPI rates for July. Should you be interested in a peak of what’s in store for the markets next week, please refer to our weekly outlook later today.
All trading involves risk. It is possible to lose all your capital
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.