Oil, GDP, And The FOMC Meeting Minutes

 | May 25, 2017 02:05AM ET

h2 FUNDAMENTAL OUTLOOK (actual from May 21)

Current economic situation:
USD
(-) Core CPI YoY felt to 1.9%, below FEDs target level of 2%, because of falling oil prices and this can be the reason for FED pause in % increasing;
(-) GDP and PMI strongly falling;
(-) Trump policy without changes;
(-) Risk of Trump impeachment;

EURO
(+) CPI raised above 2%, PMI of Manufacturing and Services and PPI is strongly rising.

Conclusion: all against dollar and eur/usd will continue uptrend to 1.1350

Economic perspective:

DOLLAR
(-) if this week Wednesday’s “FOMC Meeting Minutes” will have information about negative Core CPI and possible pause in % rates rising, this will be very negative signal for dollar. In other way, if all will be the same, dollar stay more neutral;
(-/+) If oil prices after Thursday’s “OPEC meeting” will not go above $50, US CPI have risk to continue its falling or to be below 2% of target level. In other way oil now have strong uptrend and OPEC can support it, after that WTI can reach price $55, that will increase US CPI above 2%;
(+/-) this week we have a lot of FED speeches, when some of them can say about risk in % rates pause;
(-) talking about Trupm’s impeachment can to be continue and if will increase turnover, increase risk for dollar and gold uptrend;
(-) Friday’s “US GDP” have chance to continue falling, because all other economic indicators continue their falls, that will harm the dollar.

EURO
(+) CPI raised above 2% and this week on “Draghi speech” possible can say something about decreasing of QU tapering;

Conclusion: more negative scenarios for dollar, so eur/usd will continue uptrend to 1.1350