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Oil Talking Points

The price of oil is expected to face increasing sensitivity over a entrance days as a Organization of a Petroleum Exporting Countries (OPEC) and a allies assemble for the Joint Ministerial Monitoring Committee (JMMC) assembly on Aug 17-18.

Fundamental Forecast for Oil: Neutral

The cost of oil cleared a Jul high ($42.51) during a initial week of Aug even yet OPEC prepares to retreat a prolongation cuts in response to COVID-19, and it stays to seen if a organisation will change gears over a entrance months as a press recover from a prior JMMC assembly reiterates that “the outcomes of a Jun Meetings extended a initial proviso of a prolongation adjustments until 31 Jul 2020.”

It seems as yet OPEC and a allies will tell a intentional measures from progressing this year as a organisation insists that “the additional supply ensuing from a scheduled easing of a prolongation composition will be consumed as direct recovers,” and a organisation might revive wanton out to pre-pandemic levels as a refurbish to a Monthly Oil Market Report (MOMR) reveals an softened opinion for oil consumption.

“Global oil direct expansion in 2020 is revised adult by 0.1 mb/d from a prior month’s assessment” according to a Jul MOMR, with a news going onto contend that “the ceiling rider reflects somewhat better–than-expected oil direct from a OECD segment in2Q20, that some-more than equivalent downward adjustments to non-OECD oil direct during a same quarter.”

In turn, a death of a Jun agreement might drag on oil prices, though another turn of intentional prolongation cuts from OPEC and a allies might keep oil prices afloat as US wanton outlay sits during a lowest turn given 2018.

Recent total from a US Energy Information Administration (EIA) showed wanton prolongation squeezing to 11,000K b/d in a week finale Jul 31 after holding during 11,100K b/d for dual consecutive weeks, and a serve slack in US outlay might assistance to keep a cost of oil afloat as OPEC Secretary General Mohammed Barkindo pledges to yield “reassurance to a marketplace that a OPEC+ organisation is active and entirely mindful of a ever-evolving oil marketplace fundamentals.”

With that said, developments entrance out of a JMMC assembly might change a cost of oil as OPEC and a allies ready to revive wanton outlay to pre-pandemic levels, though another turn of intentional prolongation cuts might keep appetite prices afloat as US outlay stays stagnant.

— Written by David Song, Currency Strategist

Follow me on Twitter during @DavidJSong

Market view finished on a rather discreet note Friday as a tech-heavy Nasdaq 100 fell about 0.9%. The Dow Jones and SP 500 erased waste however. The sentiment-linked Australian and New Zealand Dollars came underneath offered vigour as a haven-linked US Dollar and Japanese Yen managed to rise. Even gold prices succumbed to offered vigour after conspicuous gains.

All eyes have newly been on record companies for pulling some of a many assertive gains in tellurian equities given late March. Last week, US-China tensions might have played a pivotal role. The former changed to anathema exchange with pivotal Chinese tech companies WeChat and TikTok. Tencent, a owners of WeChat, saw a share cost during one indicate decrease as most as 10.5% on Friday.

Retaliation from China, a world’s second-largest economy, should be kept an eye out for as that could subdue marketplace mood further. Another pivotal risk to watch for is developments around US mercantile stimulus. Last week, Democrats and Republicans unsuccessful to find an agreement on a distance of a package, pulling a White House to cruise executive movement on certain impulse provisions.

Markets are brazen looking, hence a confident non-farm payrolls report being brushed aside final week. A miss or check in US impulse as good as sharpening US-China tensions could derail prospects of a quick tellurian mercantile liberation from a repairs coronavirus has done. That could tongue-tied a impact of EU and UK GDP information ahead. More concentration could be given to University of Michigan Sentiment on Friday as a comparatively timely indicator of mercantile health.

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Fundamental Forecasts:

British Pound May Fall on Virus-Hit GDP Data, Brexit Stalemate

The British Pound might come underneath glow as doubt about Brexit continues to quell GBP’s unrestrained forward of a recover of preliminary, Q2 UK GDP data.

Oil Price Outlook Hinges on OPEC Meeting as US Output Remains Stagnant

The price of oil clears a Jul high ($42.51) ahead of a OPEC assembly as US crude outlay sits during a lowest turn given 2018.

SP 500 and FTSE 100 Forecasts for a Week Ahead

Tech heading a SP 500 towards record highs, however, China risks rise. FTSE 100 hovers in a reduce range.

US Dollar Weekly Outlook – Short-Term Relief Rally or a Change of Heart?

The US dollar is perplexing to form a understanding bottom to rally-off though a elemental backdrop stays murky for a greenback.

Yen May Rise as Nasdaq 100 Falls on US-China Tensions, Fiscal Woes

The anti-risk Japanese Yen might arise versus currencies like a AUD and NZDon US-China tensions and mercantile impulse woes that sank a Nasdaq 100 during a finish of final week.

Technical Forecasts:

US Dollar Outlook: USD Sell-off Halted during Trend Support– DXY Levels

The Dollar is down than 3% year-to-date with a index responding to trend support during multi-year lows. Here are a levels that matter on a DXY weekly technical chart.

SP 500, DAX 30, FTSE 100 Forecasts for Week Ahead (Charts)

US bonds looking for new highs while a DAX and FTSE continue to denote relations weakness.

USD/MXN Week Ahead: Sentiment Will Focus on Sino-US Tensions Ahead of Banxico Meeting

USD/MXN recovers some customer support as sharpening geopolitical tensions means a change towards havens

EUR/USD Price Forecast: Eyes a Test of a Neckline Support Level

Last week, EUR/USD rallied to an over dual – year high afterwards declined after. Will a cost strike a new high in a entrance days?

Australian Dollar Outlook: AUD/USD Rates Eyeing 2019 High

The Australian Dollar could be on a verge of a vital dermatitis opposite a US Dollar as AUD/USD rates eye a tighten above pivotal draft resistance.

Gold Price Technical Forecast: Gold Rally Rolls, How Far Can it Go?

Gold prices put in a large dermatitis in a initial 4 days of this week, with a large pullback display adult on Friday. But will that deter Gold bulls?

US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD

Source: IG Charts

US Dollar Price, News and Analysis:

• US Jobs Report beats expectations though stagnation stays worryingly high.
• Congress still debating a second coronavirus service bill.

The US dollar has picked adult from a new 27-month low though a pierce lacks self-assurance and might blur reduce due to increasing domestic uncertainty. The latest US Jobs Report showed a economy adding 1.7 million jobs, with salary rising and a stagnation rate falling. All numbers kick expectations though a US stagnation is still over 10%, compared to 3.5% in Feb this year, while nonfarm practice is reduce than a Feb turn by 12.9 million, according to a US Bureau of Labor Statistics.

DailyFX Economic Calendar

The second coronavirus service check is still being debated in Congress with both sides refusing to nudge so far. Finding a resolution is apropos some-more obligatory as a time ticks after a $600 a week stagnation service package lapsed during a finish of July. If a new package is passed, and it is eventually approaching to, a US dollar copy press will be operative overtime again, putting downward vigour on a greenback.

In addition, US President Donald Trump continues to ramp adult a vigour on China with tech companies now in his cross-hairs. The President final night threatened restrictions on dual renouned Chinese amicable media companies, TikTok and WeChat, as good as melancholy to de-list Chinese companies quoted on US batch exchanges unless they approve with US accounting standards. Retaliation is approaching from China.

Forex Fundamental Analysis – News that Matters

US Treasury yields continue to lay during or on record low levels due to a ongoing copy of US dollars. These parsimonious yields offer small support to a greenback and they are doubtful to do so in a destiny possibly with rates approaching to stay low for a apart future.

Via Investing.Com

The daily US dollar basket (DXY) draft shows a intensity area of support around 92.50 with Friday’s candle pulling towards a new double-top around 94.00. Above here would supplement some certain perspective to a greenback, generally if it could mangle and open above a 20-dma around 94.17. The rest of a chart, however, stays disastrous and it stays to be seen if this new bounce-back turns into something some-more long-lasting or if it is only a brief remit before a USD turns reduce again. Fundamentals will continue to expostulate cost movement in a greenback.

US Dollar (DXY) Daily Price Chart (January – August 7, 2020)

What is your perspective on the US Dollar – bullish or bearish?? You can let us know around a form during a finish of this square or we can hit a author around Twitter @nickcawley1.

As suggested in a CFTC Commitments of Traders news in a week finished Aug 4, NET SHORT for USD Index futures decreased -252 to 6 475 contracts. Bets fell on both sides as a greenback is still anticipating bottom after losing roughly -10% opposite a basket of currencies given March. Speculative prolonged positions forsaken -2 433 contracts and brief positions were down -2 685 contracts. Concerning European currencies, NET LENGTH in EUR futures jumped +23 089 contracts to 180 648. NET SHORT for GBP futures declined -10 682 contracts to 14 727 for a week.
On safe-haven currencies, NET LENGTH on CHF futures jumped +3 218 contracts to 11 660. NET LENGTH on JPY futures gained +2 922 contracts to 31 429. Commodity currencies underneath a coverage remained in NET SHORT positions. AUD futures’ NET SHORT declined -3 964 to 1 048 contracts. Separately, NZD futures’ NET SHORT combined +603 contracts to 1 448 during a week. Meanwhile, NET SHORT for CAD futures jumped +10 699 contracts to 23 195.

 

According to a CFTC Commitments of Traders news for a week finished Aug 4, NET LENGTH for crude oil futures gained +3 697 contracts to 536 266 for a week. Speculative prolonged position rose +16 930 contracts, while shorts gained +13 233. For polished oil products, NET LENGTH for gasoline increasing +7 526 contracts to 57 940, while NET LENGTH for heating oil futures combined +4 785 contracts to 15 471. NET SHORT for natural gas futures plunged -11 099 contracts to 7 595 contracts for a week.

Gold futures’ NET LENGTH gained +1 945 contracts to 238 746. Speculative prolonged positions increasing +9 259 contracts while shorts also combined +7 314. Silver futures’ NET LENGTH rose +2 581 contracts to 29 889. For PGMs, NET LENGTH of Nymex platinum futures forsaken -2 906 contracts to 19 506 while that for palladium slipped -144 contracts to 2 972.

Source: IG Charts

OUTLOOK: BEARISH

British Pound Groans on Prolonged Brexit Negotiations

The British Pound stays dangling by domestic angst over a fortitude of an roughly five-year divorce agreement between a United Kingdom and European Union. Last week, EU arch Brexit adjudicator Michel Barnier tweeted discipline for businesses to prepared for intensity cross-border attrition after a Dec 31, 2020 deadline. In a report, it states that:

“There will be extended and inclusive consequences for open administrations, businesses and adults as of 1 Jan 2021, regardless of a outcome of negotiations. These changes are destined and stakeholders contingency make certain they are prepared for them” –European Commission.

The British Pound subsequently embellished some of a gains. The UK and EU have scheduled trade-related talks via a fall, privately adult until Oct 2. European officials stressed a need to have a understanding to benefaction by that indicate to concede plenty time for a 27 European leaders to examination it, ask for amendments and or sanction it.

Friction between EU and UK policymakers heading adult to that indicate could expel a deep, dim bearish shade over a politically-sensitive British Pound. Already a exchanges between Mr. Barnier and his reflection David Frost, have – suitable to his name – sent a chilling summary about shared trade talks. These discussions and uncertainties around them might quell gains in GDP until there is some-more clarity.

Follow me on Twitter @ZabelinDimitri for some-more marketplace updates!

GBP Eyes Virus-Hit GDP Data

Sterling traders will also be anxiously watchful for a recover of rough Q2 UK GDP data. These total are doubtful to uncover an underlying optimism. One source of variability and doubt is not usually what executive estimates might be though how a tangible reading will deviating from it.

If one thing was done transparent by Bank of England Governor Andrew Bailey during final week’s process meeting, it’s that a mercantile conditions entails an “awful lot of risk”. He pronounced financial authorities are prepared to boost a gait of item purchases if necessary, and to “lean in” to support a UK economy. Officials see GDP descending 9.5 percent in 2020, with expectations that stagnation is set to “materially” rise.

When asked about disastrous rates, Mr. Bailey pronounced that this magnitude is in a toolbox, though that officials have no goal of regulating it. The executive bank done it really transparent that it will not tie rates until acceleration is sustainably above a target, signaling that a enlarged state of easing is expected to be around for utterly some time. With that in mind, a British Pound will expected continue to knowledge vigour from this end.

British Pound Index Versus, US Dollar, Japanese Yen, Euro, Australian Dollar – Monthly Chart

GBP index combined regulating TradingView

— Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To hit Dimitri, use a comments territory next or @ZabelinDimitri on Twitter