The quotations of the euro-dollar pair rose slightly at the end of Monday’s session to 1.1756, although during the trading the pair reached the level of 1.1815.
The European currency continues to strengthen against the US against expectations of an interest rate hike at the Fed meeting, which will be held on Wednesday. The growth of the economy in the United States significantly exceeds the Eurozone, and the European regulator only indicates the prospects of a possible rate hike in mid-2019, unlike the Fed, which may well raise the rate twice before the end of the year. Following the September meeting, the ECB left rates unchanged and said it expects key rates to remain at current levels for as long as it takes to ensure inflation is just below 2% in the medium term.
Ecb head Mario Draghi, speaking yesterday, also said that the recovery of inflation in the Eurozone will be possible provided that market interest rates remain low until the end of next summer. Draghi also announced that the forecasts of inflation in the Eurozone remain unchanged, at about 1.7% in 2018, 2019 and 2020, which is slightly less than the ECB’s target of 2%.
In our forecast for Tuesday we assume a further slight strengthening of the euro-dollar quotations against the resistance levels of 1.1775, 1.1800 and 1.1835.
Forex. Pound/dollar currency pair forecast (GBP/USD)
The quotes of the pound-dollar pair recovered slightly yesterday after a sharp fall at the end of last week and reached the resistance level of 1.3120 by the end of the session.
The fall of the British currency on Friday once again showed how much the pound today is more dependent on the news on Brexit than on economic indicators. Rising retail sales and inflationary pressures allowed the pound to rise and gain a foothold above the key level of 1.3000, but after the summit of EU leaders the currency lost more than two hundred points in one day. The current situation looks almost intractable. EU representatives have rejected Theresa May’s proposed solution to the problem. Moreover, most members of the British Cabinet also oppose Theresa May’s option on a future relationship with the EU as a basis for negotiations and offer their own option. According to this proposal, it is necessary to avoid the imposition of any customs duties on imports and exports and to get out of the influence of the EU court. In addition, the British opposition is considering the option of holding a referendum on the final agreement on further cooperation between the UK and the EU after Brexit, as well as with early parliamentary elections. In addition, political divisions within the ruling party could prevent a potential deal with the European Union from being accepted, even if it is eventually reached.
In our forecast for today we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.3100, 1.3080 and 1.3050.
Forex. Gold price forecast
Gold prices were little changed at the end of Monday’s trading and ended the session at $1,199 per troy ounce.
The U.S. and China imposed new trade duties on each other’s imports on Monday. So far, neither side is ready to concede in the ongoing standoff, which is expected to hit the world economy. At the same time, China expressed readiness to resume negotiations with the United States if they do not take place against the background of threats of new tariffs. On Saturday, the U.S. president again threatened to impose additional duties on imports of Chinese goods if Beijing retaliates. In this case, the new duties will affect almost the entire volume of imports of goods from China.
According to some reports, the administration of Donald Trump has already begun preparations for a new round of pressure on China, which will involve not only the Ministry of Finance and the Ministry of Commerce, but also the Pentagon and the National Security Council. Beijing will be accused of hostile activities against U.S. companies, intellectual property theft, cyberattacks and election meddling. China has already canceled trade talks scheduled for this week in Washington.
Volatility of gold decreases in the run-up to the Fed meeting, at which the interest rate is likely to be raised. With a high probability gold will be traded in a narrow range near the level of 1200 dollars per ounce, and after the meeting will resume growth.
In our forecast for today we expect a slight decrease in gold quotations to support levels of 1202, 1204 and 1207 dollars per troy ounce.
Forex. North American Oil Forecast (WTI)
WTI crude oil prices rose sharply in Monday’s trading and reached a new high starting in June this year at $72.24 per barrel.
The growth of oil at the beginning of the new trading week is connected with the results of the meeting of the OPEC monitoring committee, which was held on Sunday in Algeria. Despite market expectations, OPEC did not increase oil production quotas. Saudi Arabia and Russia are ready to increase production at any time, but the cartel leadership has decided to observe the dynamics of the change in supply in the world market against the background of declining exports of raw materials from Iran. According to preliminary forecasts, the level of implementation of the OPEC agreement in September may reach 100%, which is significantly less than the 129% achieved in August, and Iran’s share of the oil market will be distributed among other participants.
Iran’s representative to OPEC, Hossein Ardebili, said other OPEC countries would not be able to easily recoup the market’s absence of 2.3 million barrels of Iranian oil per day when U.S. sanctions against the country take effect. The rest of OPEC members will have to use their reserves to export enough raw materials to make up for the lack of supplies from Iran, which will eventually lead to higher oil prices.
Today, the American Petroleum Institute will publish its data on changes in raw materials inventories last week. According to preliminary data, commercial oil reserves are expected to decline, which will allow prices to continue to grow.
In our forecast for today we expect further growth of WTI crude oil quotations to resistance levels of 72.40, 72.60 and 72.90 dollars per barrel.
Forex. Cryptocurrency forecast
Cryptocurrency assets fell slightly on Monday after strong growth the day before. Bitcoin fell to $6,650 and ethereum fell to $235.
The well-known Opera browser has released a specialized desktop version of its software, which is aimed at users of cryptocurrencies. The new product was separated from the main version of Opera and gave it the name Opera Labs. The default browser includes a cryptocurrency ethereum wallet. You can also use your browser to interact with decentralized applications. At the moment there is only support for Ethereum and tokens on its blockchain, but the company said it will expand the list of supported assets in the future. At the moment there has not been an official release and Opera Labs is not available to ordinary users. But a limited group of beta testers is already testing the product.
The XRP token continues to be in the spotlight after a four-day rally in which the cryptocurrency grew by more than 100%. A new platform created by former Tech CEO Ripple has integrated with YouTube and Twitch, allowing content creators to accept XRP. A platform called Coil aims to provide Internet content creators with new ways to monetize and is in beta. In addition, Youtube and Twitch users can also send donations to Wikipedia and Internet Archive. Users of the beta have already started using this feature on their sites.
In our forecast for Tuesday, we expect further slight growth in bitcoin quotes to resistance levels of 6600, 6650 and 6700 dollars, as well as strengthening of ethereum to the marks 240, 245 and 250 dollars.