MARKETS LITTLE CHANGED AHEAD OF THIS YEAR’S MOST IMPORTANT WEEK
Global stocks were little moved today after the G7 summit and ahead of tomorrow’s summit between the United States and North Korea. For the first time in history, the US team refused to sign the joint communique after the G7 summit. The team refused to sign the document because of Justin Trudeau’s statement on the tariffs the US has levied against the country. This morning, Donald Trump doubled down on his tough statement against Trudeau calling for the country to lower their tariffs against the US.
The pound dropped today after the county released manufacturing data. The data showed that manufacturing production in April declined by 1.4%. This was the lower than the 0.3% growth traders were expecting. It was also the lowest level since 2012. It showed that the country’s manufacturers were still going through a challenge especially on the Brexit issues. The country’s trade balance of negative 14 billion pounds missed the estimated 11.03 billion pounds. The GBP/USD pair is currently trading at 1.3370.
The USD/JPY pair rose today after Donald Trump and Kim Jong Un arrived in Singapore for the summit. This will be the first time a US president and the North Korean leader will have met in person. If the meeting ends well, the USD/JPY pair could continue the upward momentum. This is because traders view the Japanese Yen as a safe haven because of the vast holdings Japan has overseas. If there is no positive resolution, the pair could fall as traders move to the yen.
The EUR/USD pair was little moved today as traders braced for what is being touted as the most important week this year. On Wednesday the Fed is expected to release its interest rate decision. This will be followed by the ECB on Thursday. The pair is now trading at 1.7910, which is slightly lower than the close on Friday. The pair is trading in line with the 30-day Simple Moving Average (SMA) and slightly higher than the 60-day SMA. It is also trading above an important support as shown below. Further declines would see the pair test this support at 1.7555. Any upside will see the pair test the weekly high at 1.1838.
The GBP/USD pair fell after today’s disappointing industrial production numbers. The pair is now trading at 1.3375, which is lower than the important support of 1.3380. The pair is also trading below the 30 and 60-day simple moving average level, with the MACD indicator showing that it could continue the downward momentum. The RSI is currently at 45. Traders should be careful because the pair will certainly be affected by tomorrow’s employment numbers from the UK, the North Korea deliberations, and the decision by the Fed on Wednesday.
The USD/JPY pair moved slightly higher today as traders placed their hopes on the Trump-Kim summit. The pair is currently trading at 109.8, which is slightly lower than the weekly high of 110.2. As shown below, the pair is trying to form a symmetrical triangle pattern. It is also trading above the 30 and 60-day moving averages. In the short term, the pair will see major movements because of the North Korea summit, the Fed, and the BOJ decision on Friday. This could see the pair test the 109.1 level or the 110.1 resistance level.