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    Morning Report – Monday 5th August

    THE DAILY REPORT

    MORNING REPORT

    TOP THINGS TO KNOW

    Trump defends stance on China trade after new tariffs

    (Reuters 03/08/2019) - U.S. President Donald Trump said on Saturday that things are going well with China, insisting U.S. consumers are not paying for import taxes he has imposed on goods from that country although economists say Americans are footing the bill.

    “Things are going along very well with China. They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing - and no inflation. No help from Fed!” Trump said on Twitter.

    He also said - without presenting evidence - that countries are asking to negotiate “REAL trade deals,” saying on Twitter, “They don’t want to be targeted for Tariffs by the U.S.”

    Trump abruptly decided on Thursday to slap 10% tariffs $300 billion in Chinese imports, stunning financial markets and ending a month-long trade truce.

    China vowed on Friday to fight back.

    Tariffs are intended to make foreign goods more expensive to boost domestic producers, unless international exporters reduce prices. But there has been no evidence that China is cutting prices to accommodate Trump’s tariffs.

    A study published by the National Bureau of Economic research in March found that all of the cost of tariffs imposed in 2018 were passed on to U.S. consumers.

    WTI remains on the road to recovery amid geopolitical tension

    (FXStreet 05/08/2019) - While Friday’s comments from the US President Donald Trump helped trigger WTI recovery, the energy benchmark holds the strength amid geopolitical tension surrounding the Middle East as it trades near $55.30 during the initial Asian session on Monday.

    Having announced 10% tariffs on China’s goods worth $300 billion, effective from September 01, the US President Trump took a U-turn from previous comments on Friday while saying that the tariffs can be delayed/canceled if China promises to move forward on trade between now and their next scheduled meeting in September.

    Not only trade news but a fifth consecutive weekly fall in the US oil rig count, as reported by the Baker Hughes, also favored the black gold’s pullback from a fortnight low.

    During the weekend, Iran again grabbed market attention by seizing an oil tanker and seven sailors on the charges of “smuggling”. The same is third such seizure by Iranian revolutionary guards in a month and flashes warnings to global oil players using the Persian Gulf as a route.

    Traders will now look forward to Services/Non-Manufacturing Purchasing Managers’ Index (PMI) data from China, Eurozone, the UK and the US for fresh impulse while keeping an eye over trade/political headlines.

    Technical Analysis

    Even if $55.80/$56.00 can be considered as immediate resistances, 200-day moving average level of $56.70 becomes the key upside barrier for prices, which in-turn keeps highlighting medium-term support-line of $53.60 and June month low $50.60 on the bears’ radar.

    TRADE OPPORTUNITIES

    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    GBPJPY Daily – Buy above 129, rebound towards 130.57.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    USDCAD 30 Minute – Short positions below 1.3225 with targets at 1.3180 & 1.3155.

    GBPUSD 30 Minute – Long positions above 1.2130 with targets at 1.2170 & 1.2200.

    EURUSD 30 Minute – Long positions above 1.1095 with targets at 1.1115 & 1.1135.

    SUGAR Daily – Buy above 11.71, short term rebound targets at 12.83 & 13.1.

    HANG SENG Daily – Short positions below 28000 with targets at 26665 & 25600.

    NIFTY Daily – The downside prevails as long as 11249 is resistance.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website www.forexct.com.au. Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: August 05, 2019 | 6:09 AM