Tuesday was the most interesting day in the Forex market. All data released in Europe was worse than forecasted. And in the U.S., consumer price data was higher than the analysts’ forecasts. In theory, the dollar should have strengthened. Instead, it fell sharply.
The decline was also recorded in relation to all risk investments and commodity futures. If you follow the chart above closely, you can see that the EUR/USD pair is once again approaching a strong resistance zone. Over the past 2 years, a strong reversal has occurred several times at these levels. In addition, the price fell several points at once. But the more the same scenario is repeated, the stronger the exit from this scenario can be.
In England, very poor GDP figures are published for the second month in a row. Our spring forecasts are fully confirmed. After it turned out that the island offered no protection against COVID-19, the next problem was very acute. The same location on the island has led to an even greater production and logistics crisis than in the EU. All connections were interrupted. Most British people deeply regretted the choice made in the referendum.
Despite the news from South and North America, where the coronavirus situation is assuming a catastrophic scenario, the oil refuses to sink. It is already clear that the tourist season that has begun is in danger. Most tourists will not leave their country. And the resumption of a large number of scheduled flights is a dream.
Nevertheless, the oil is at the same level as 40 days ago, when it looked as if the corona virus had retreated with the arrival of the heat. Why is this happening? There can be only one answer. Production of the black gold has dropped sharply in recent months. This applies to the OPEC+ agreement. As well as countries like the USA, whose oil companies have reduced their production due to a sharp drop in demand.
Perhaps the oil industry has succeeded in finding a new balance between supply and demand. In which case, a long flute awaits us all summer long. And only then will everyone see whether the second wave of the coronavirus will reach the countries of Asia and Europe. And if it does, we can expect the biggest drop in oil to 20-25 dollars a barrel.
What’s waiting for us today?
05:00 Bank of Japan decision on interest rate
08:00 British Consumer Price Index June
15:15 U.S. Industrial Production for June
16:00 Decision of the Bank of Canada on the interest rate
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