The euro rose after European leaders agreed to start trade talks with the United States. The leaders directed the European Commission to start focusing on slashing tariffs on industrial goods, while excluding agriculture. United States negotiators have said that agricultural products like soybeans and corn must be included in the deal. This has been opposed by agricultural countries like France, who believe that removing tariffs will put their farmers at risk. New discussions come at a time when Donald Trump is close to making a decision on whether he will add tariffs worth $60 billion on European goods. Last year, the US trade deficit with the EU widened to $157 billion.
US futures point to a higher open as traders prepare for the earnings season, which will start today. As is the norm, the season will start with the release of financials from leading banks such as Wells Fargo, JP Morgan, and PNC Financial. The banks earnings are important to investors because they provide important perspective about the activity of the consumers and businesses. Better-than-expected earnings show that their customers are doing well, which provides a boost to the economy.
The price of crude oil paused as investors wondered about the impacts of the ongoing crisis in the Middle East. In recent months, demonstrations in the oil-rich countries of Sudan and Algeria have forced the countries’ leaders to leave office. Yesterday, Sudan’s leader, Omar al-Bashir was forced to resign as the military took over. In Libya, fighting has continued in Tripoli as Khalifa Haftar’s militia battles with the forces of the UN-recognized Mohammed Magariaf. Investors believe that these protests could unveil the Arab Spring 2.0.
Regarding economic data, traders will watch trade data from China. This data is expected to show that in March, exports grew by 7.3% while imports declined by 1.3%. The trade surplus is expected to grow by $7 billion. They will also receive the CPI numbers from Spain, the industrial production from the European Union, sentiment numbers from the US, and Baker Hughes rigs count.
After declining yesterday, the price of WTI crude rose slightly today. It is now trading at the 63.78 level, which is closer to the five-month high of 64.70. On the four-hour chart, this price is along the 25-day moving averages but slightly above the 50-day moving averages. After dropping below the zero line, the Chaiking Oscillator is rising again while the Average Directional Index (ADX) has stabilized at the current levels of 30. Therefore, the pair could move upwards to test the important resistance of 70.
Yesterday, the Dow ended the day lower by 15 points. In recent weeks, it has been dragged by Boeing, which is facing billions of dollars in penalties. It is now trading at $26172, while futures are priced at $26180. On the hourly chart, the price is along the short and medium-term moving averages while the RSI is currently at 50. It is slightly above the 61.8% Fibonacci Retracement level. Today, the index will be watched closely as the earnings season kicks off. The key levels to watch will be $26000 and $26200.
After yesterday’s declines, the EUR/USD pair rose sharply in overnight trading. The pair reached a high of 1.1293, which was above the 21-day and 42-day Fractal Adaptive Moving Average. On the 30-minute chart, the RSI has remained above the overbought level of 70 while volumes have declined. Today, traders will continue to watch out for the developments in the US-EU dispute.
General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.