IMF decreased UK growth forecast – Keep focusing on Powell

The summit in Finland had ended with the better diplomatic relation between the United States and Russia on Monday. Trump did not mention Syria and Ukraine as well as he refused to blame the Russian leader for meddling in the 2016 U.S. election. This political factor did not affect much the world stock market on Tuesday but the major stock market in Asia traded mixed because investors focus on earning in second quarter. While New York stock market may focus on Fed chair Powell’s speech and earnings of some big companies such as American express, IBM, EBay, etc.
The U.S. dollar was holding steady early on Tuesday as investors keep focusing on Powell. But British pound swings in very narrow frame after IMF decreased its economic growth forecast this year to 1.4% from the Brexit issue. In my view, Powell may not express much negative effects of Trade war to the U.S. economy and he may keep hiking the interest rate 4 times in 2018 so greenback can get the positive support and rise up. As the result, pound may fall lower than 1.3200 dollar. However, an internal factor may slowdown the bearish trend of pound so GBP/USD may move in the frame 1.3100-1.3200 points today.
There is also a negative factor from Fed rising interest rate because the higher rate may reach the slowdown of properties in the USA. Hence, real estate shares may drop from the higher rate and Dow Jones may slightly fall. The steady dollar had pulled gold price edged lower than 1,240 dollar since Monday but Gold price try to rise back above 1,240 dollar. I suggest the new support line for gold price this week at 1,237.70 dollar and the resistant line at 1,245 dollar.
In contrast, Bitcoin price try to break the resistant line at 6,700 dollar so if it can rise above 6,700 dollar, it may rise up to next resistance at 7,000 dollar from the higher trade volume.
Economic indices in focus:
• UK: CPI (Jun) at 15.30 p.m.
• EU: CPI and Core CPI (Jun) at 16.00 p.m.
• USA: Building permits (Jun) at 19.30 p.m., Fed Chair Powell Testifies at 21.00 p.m. and Crude oil inventories at 21.30 p.m.

By Niramon Nitnitiphruet (Financial analyst, Olymp Trade).

Olymp Trade Review