- Challenges to global trade raise bars for future energy demand outlook.
- China data disappointment also weighs on prices.
- Geopolitical tensions between Iran and Iraq are in play.
With the US President Donald Trump intensifying global trade tension, WTI drops to March lows with a bottom about $55.60 while currency trading near $56.00 by the press time on early Friday.
Even if the war-like situation between Iran and Iraq, together with an on-going global oil production cut, indicates future supply crunch, questions to the global trade system raise bars for demand outlook.
The US President Donald Trump recently announced 5% tariffs on all Mexican goods imports in order to push the nation towards stopping illegal migration into the US. Mr. Trump also said the tariffs could go on to as high as 25% if the trade partner doesn’t solve the situation by October.
Adding to the price weakness could be China’s official purchasing manager index (PMI) data wherein manufacturing PMI slipped into activity contraction region with 49.4 versus 49.9 expected and 50.1 prior while non-manufacturing PMI remained unchanged at 54.3 by lagging behind 54.5 consensuses.
In addition to the political news reports concerning trade and the Middle East, traders may also have a busy day due to the economic calendar that has PMIs and personal income-spending data to entertain momentum lovers.
Technical Analysis
Failure to provide sustained downturn beneath February 04 highs at $55.73 guard the 50% Fibonacci retracement of the late December swing lows to recent 2018 highs at $54.50 while $58.00 and 4HR 20EMA at $58.40 seem to limit immediate upside.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.