Increasing trade war between USA and its key partners, including China after Trump administration announced that it plans to control the Chinese investment in the United States as well as strictly control U.S. export of technical products. Chinese president - Xi Jinping said last week that “In our culture, we punch back.” Furthermore, trade war with Europe also pressured EU tax import products from USA so Harley-Davidson announced it would move some manufacturing out of the US to avoid EU tariffs and EU prepared further retaliatory measures in case of new U.S. tariff. Investors focus on EU leaders meeting the end of this week.
The rising trade tension combined with fund flow which Fed will reduce 40 billion dollars per month on QE program in the coming third quarter may pressure major stock markets in Asia. Japanese yen may get good support from the trade war so USD/JPY may fall lower to 109 points. But gold price did not get much support from this factor because investors choose bond more than commodity so gold price may move sideways down to the support line at 1,260 dollar, if U.S. dollar is steady.
The economic data of the United States may support greenback to hold steady while euro may get negative factor from the political uncertainty in German so EUR/USD may fall to 1.16200 points again after rose up to 1.170 points. After OPEC decision, Brent rose up and U.S. crude oil stock may support Brent hold above 74 USD per barrel. Bitcoin price rose back above 6,200 dollar after 250 million Tethers (USDT) were created on Monday. Bitcoin also build the reversal pattern “Head and Shoulders” so it may rise to 6648 dollar.
Economic indices in focus:
• UK: BoE Gov Carney Speaks at 15.30 p.m.
• USA: Core durable goods orders (May) at 19.30 p.m.;
Pending home sales (May) at 21.00 p.m.;
Crude oil inventories at 21.30 p.m.
By Niramon Nitnitiphruet
Financial analyst, Olymp Trade.