June was the best month in five years for the US dollar, however since the publication of employment data last Friday the greenback has lost some traction, with investors feeling less anxious about the timing of the Fed’s tapering policies. Even though the overall number of new jobs created in June was positive, exceeding forecasts, the devil is in the detail. Alongside the rise in jobs, there was also an uptick in unemployment while average earnings rose less than expected, highlighting the need for continued monetary support, making it harder to justify a premature end to the ongoing stimulus.
Oil markets remained steady at the beginning of this new week as investors seek more clarity on production following tensions inside OPEC+. The unexpected clash between Saudi Arabia and the United Arab Emirates is leaving investors baffled despite the otherwise bullish environment for oil. The next few hours are likely to witness an increase in market volatility as the next OPEC+ meeting looms today, and a breakthrough in discussions could even spark a much more directional price movement. Meanwhile the market stays inside its mid-term bullish channel, trading above $74.50 with upward targets at $75.40, $75.85 and $76.35 while the nearest support levels are at $74 and $73.40.
European markets continued to trade lower on Monday, as the risk-off mood prevails following the solid key US figures released at the end of last week. While central banks aren’t likely to start tapering discussions immediately, investors are already weighing the end of stimulus policies around the world, which is inevitably denting market sentiment this week. Today’s trading session is likely to stay volatile but not very directional as the US will remain shut for Independence Day. However, investors will scrutinize ECB President Christine Lagarde’s words when she speaks due later today to get more clues about the next policy and monetary moves in Europe while the FOMC minutes loom on Wednesday.
Pierre Veyret– Technical analyst, ActivTrades
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Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.