US futures rebound as trade war tensions ease
US stock futures rebounded after having their worst day since December. The Dow and S&P 500 futures rose by 160 and 25 points respectively. Investors sentiment was soothed by a statement by Trump yesterday that he will meet with China’s Xi Jinping at the G20 summit in Japan. He said that he expected to have a successful meeting with Xi and that the outcome of the trade talks will take place in the next three to four weeks. In a note, Deutsche Bank said that if the US was to increase all tariffs from China by 25%, US companies in the S&P 500 would fall by between 20% and 30%.
The UK pound was relatively unmoved today after mixed jobs numbers. The data showed that the unemployment rate declined to 3.8% from the previous 3.9%. On the other hand, the employment change in the past 3 months was at 99k, which was lower than the expected 141k. The claimant count increased by 24.7k while the average earnings index with bonus eased to 3.2%. Investors were expecting a growth of 3.4%.
The euro was relatively unmoved today after mixed economic data from the European Union. In the EU, the industrial production eased by minus 0.6%, which was better than the expected decline of - 0.8%. On a MoM basis, production declined by - 0.3%, which was in line with the expectations. In Germany, the ZEW assessment of the current conditions increased to 8.2, which was better than the expected 6.0. In April, the headline CPI rose by 1.5% which was in line with the expectations.
This week, the GBP/USD pair has declined from a high of 1.3182 to a low of 1.2970. This decline happened as opinion polls showed that the Brexit Party was rising. On the four-hour chart, this price is below the 25-day and 50-day moving averages. The pair is also moving on a downward trend. The RSI has declined to almost the oversold level of 30. In the short term, the pair could accelerate the downward trend to reach the important support of 1.2940.
The XTI/USD pair rose to an intraday high of 62.06 after data from OPEC showed that the countries were continuing the supply cuts. On the hourly chart, this price is slightly below the 38.2% Fibonacci Retracement level. The price is also slightly above the 25-day and 50-day moving averages. There is a likelihood that the pair will move to the 50% Fibonacci level of 63.25.
The EUR/USD pair declined to an intraday low of 1.1207, which is below the important green support below. On the hourly chart, the price is below the 25-day and 50-day moving averages and along the lower line of the Bollinger Bands. The accumulation/distribution indicator has moved slightly lower while the money flow index has remained unchanged. In the US session, the pair could move below the 1.1200 support.