President Trump’s strategy this week appears to be of a more appeasing tone that will look to calm markets.  Risk appetite is stable on Trump’s assuaging comments on China and a possible reversal in his hardline with Iran. With no major breakthroughs expected on the trade front today, we could see that momentum fade.

 

Oil

Oil prices have been battered over the last month as the never-ending trade war intensified and hope for business investment with rig counts falter due to worsening global growth concerns.  Yesterday’s risk-on move also saw oil struggle to significantly rally after Trump showed a willingness to meet with Iranian President Rouhani, a possible olive branch that could possible show the beginning of an easing in tensions in the Persian Gulf.  With Iran’s Parliamentary elections due in February and the economy being so weak, the pressure is on Iran to achieve some breakthrough as public frustration grows.  Rouhani’s rejection of a photo-op with Trump reminds us that the path to any progress remains difficult. 

Oil could see some support from tomorrow’s crude energy report which is expected to show a steady draw of just under 2 million barrels.  After hitting consistent record high production levels earlier in the year, the pace of US output has steadily slowed down, and oil could start to see more support as energy markets continue to tighten.

 

Germany

Europe’s largest economy appears to have a clear path to a recession.  The final second quarter GDP quarterly reading was confirmed at -0.2% and with the recent batch of dismal manufacturing reports and IFO surveys, the third quarter will probably be much worse.  The transatlantic trade war will keep the German economy under pressure, but Wall Street does not anticipate a lengthy trade war like the one the US is having with China.  German businesses will continue to struggle to navigate through this difficult environment and we should expect the manufacturing weakness to crossover to other industries. 

 

Gold

In addition to portfolio managers buying up gold as their preferred safe-haven trade, central bank purchases are expected to provide an additional level of support over the next couple of years.  Emerging market demand for gold should provide major support to what is an already very strong bullish trend.  While overbought conditions have been in place for most of the summer, investors awaiting a major pullback might be disappointed.  Short-term support lies at $1,525, followed by $1,475, while upside targets remain $1,650, with longer-term targets around $1,730. 

 

Bitcoin

Bitcoin volatility is down to an almost two-month low and with no major hurdles stemming from the G7, we could see crypto traders slowly creep back into longer-term bets.  In the short-term, it will be difficult for Bitcoin to breakout from the $9,200 to $12,400 range.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD recovers further toward 0.6800 on risk-recovery

AUD/USD recovers further toward 0.6800 on risk-recovery

AUD/USD extends recovery toward 0.6800 in Asian trading on Thursday, despite mixed Australian employment data. The Aussie cheers a return of risk appetite, which weighs on the post-Fed US Dollar recovery. All eyes now remain on US economic data for fresh impetus. 

AUD/USD News
USD.JPY reverses sharply from 144.00, as US Dollar recovery fizzles

USD.JPY reverses sharply from 144.00, as US Dollar recovery fizzles

USD/JPY is attacking 143.00 in Thursday's Asian session, reversing sharply from 144.00. The pair pares back gains in tandem with the US Dollar, as the latter's post-Fed recovery falters due to a rebound in risk sentiment. The focus is next on the US data due later today and Friday's BoJ decision. 

USD/JPY News
Gold price regains positive traction amid a modest USD pullback from one-week high

Gold price regains positive traction amid a modest USD pullback from one-week high

Gold price attracts some dip-buying during the Asian session on Thursday and seems to have stalled its retracement slide from the $2,600 mark, or a fresh all-time peak touched the previous day. The US dollar trims a part of its intraday gains to a one-week high, which turns out to be a key factor lending support to the commodity.

Gold News
Crypto leaders and Congress blast SEC over crypto regulations

Crypto leaders and Congress blast SEC over crypto regulations

In a meeting on Wednesday, several crypto leaders and congress members debunked the Securities and Exchange Commission's harsh regulatory approach toward the crypto industry.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures