U.S. Threatens China With Additional Tariffs
IronFX | Jul 11, 2018 06:17AM ET
US threatens China with additional tariffs
- The US administration has raised the stakes in its trade dispute with China by threatening to impose additional tariffs on Chinese products. The tariffs threatened to be levied are to be of 10% on a long list of products imported, totaling a value of about 200$ billion. According to media, a senior Chinese official warned that the US ministry is harming global trade order. Should there be further escalation of the situation we could see the USD strengthening.
- EUR/USD traded in a sideways motion yesterday, breaking the upward trend-line incepted since the 28th of June and constantly testing the 1.1715 (S1) support line. As the aforementioned upward trend-line was broken and in line with yesterday’s analysis, we lift our bullish bias and see the case for a sideways movement. Please be advised that the pair may prove to be sensitive to any further headlines regarding trade tensions. Should the pair find extensive buying orders along its path we could see it rising and aiming if not breaking the 1.1820 (R1) resistance line. Should it come under selling interest by the market, we could see it breaking the 1.1715 (S1) support line and aim for the 1.1640 (S2) support barrier.
BoC interest rate decision
- Today in the American session (14:00, GMT) we get BoC’s interest rate decision. The bank is expected to hike rates by 25 bp and reach the level of +1.50%. Currently CAD OIS imply a probability for the bank to hike rates of 98.74%. The accompanying statement could contain comments about the uncertainty surrounding trade relationships, inflation, GDP and unemployment. We maintain our concern about the influence of the tensions of Canada’s trading relationships with the US, over the bank’s outlook. Unless there is a rather dovish accompanying statement, we could see the Loonie getting some support.
- USD/CAD tested extensively the 1.3120 (S1) support line yesterday. Technically we would like to point out that the RSI indicator in the 4 hour chart seems to imply a rather indecisive market as it remained around the reading of 50 yesterday. We see the case for a sideways movement but the pair’s direction could be influenced by the BoC interest rate decision. Should the bulls take over we could see the pair breaking the 1.3165 (R1) resistance line and aim for the 1.3222 (R2) resistance hurdle. Should on the other hand the bears take over we could see the pair breaking the 1.3120 (S1) support line and aim for the 1.3050 (S2) support area.
In today’s other economic highlights:
- In today’s European session, we get the Czech CPI rate for June and in the American session we get the US PPI rate for June. As for speakers ECB’s President Mario Draghi along with Villeroy de Galhau, Peter Praet and Yves Mersch speak. From the BoE, Sam Woods and Governor Mark Carney will be speaking and also please note New York Fed President John William’s speech later on. Furthermore, ECB’s governing council will have a meeting and have an eye out for the NATO summit as it enters its first day.
- Also please be advised that The OPEC monthly report is to be released as well as the EIA crude oil inventories figure.
Get The News You Want
USD/CAD
·Support: 1.3120(S1), 1.3050(S2), 1.2985(S3)
·Resistance: 1.3165(R1),1.3222(R2),1.3285(R3)
EUR/USD
·Support: 1.1715(S1), 1.1640(S2), 1.1550(S3)
·Resistance: 1.1820(R1), 1.1945(R2), 1.2070(R3)
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