Euro declines as Trump threatens EU with more tariffs
The euro declined today as Donald Trump threatened Europe with more tariffs. In an early-morning tweet, the US president complained about the new tariffs by the EU on American companies like Harley Davidson. These tariffs came after Donald Trump announced new tariffs on the EU after winning a World Trade Organization (WTO) case on Airbus subsidies. In the next few weeks, the president could announce fresh tariffs on EU vehicles after he finishes a review by the Commerce Department.
US stocks pointed to a higher open as the busiest week in Wall Street got underway. This week, most of the companies in the S&P 500 will release their first-quarter earnings. Twitter stock gained in premarket trading after the company’s earnings and revenues gained. The company attributed this to the increased spending on digital marketing. Other companies that reported better-than-expected earnings were Procter & Gamble, United Technologies, Coca-Cola, Verizon, Hasbro, Lockheed Martin, and Whirlpool. More earnings from companies like eBay, iRobot, Robert Half, and TD Ameritrade will be reported in afterhours trading.
The price of crude oil declined slightly today as traders continued to think about the impacts of the expiring of the waivers. This is a day after US announced that it will not renew the waivers on Iran imports from 5 countries. If the US can reduce Iranian oil exports to zero, it will mean that more than 1 million barrels of oil will be removed from the oil market. Still, many are skeptical as to whether Iran can reduce exports to zero. In fact, many tanker observers have witnessed the country export more than 1.9 million barrels a day. Later today, American Petroleum Institute (API) will release its reading on US inventories ahead of the official data from the EIA tomorrow.
The EUR/USD moved slightly lower today as Donald Trump threatened the EU with more tariffs. The pair is now trading at 1.1245, which is slightly lower than the today’s open. Still, the pair is within a relatively narrow channel. On the hourly chart, the price is slightly below the 25-day and 50-day moving averages. The price is along the lower line of the Bollinger Bands. The pair will likely continue moving lower to test the important support of 1.1225.
The price of West Texas Intermediate (WTI) declined today to an intraday low of $65.50. Still, the price remains closer to the YTD high, which is also the highest level since November last year. As shown below, this price is also higher than the narrow channel where the pair was a week ago. This price is below the lower line of the Envelopes indicator. The pair could move further downwards if the current candle on the hourly chart is bearish. Still, in the medium-term, the upward trend could prevail.
The AUD/USD pair continued the downward trend started on April 18, when the pair reached a high of 0.7205. Today, the pair reached an intraday low of 0.7105. On the hourly chart, this price is along the lower line of the Bollinger Bands. It is also below the 50 and 25-day moving averages. The RSI indicator remains along the 30 level. There is a possibility that the pair will test the important support level of 0.7080.