Trading plan for 01/08/2018
Weaker data from China and leaks from the White House regarding customs duties on Chinese goods set the climate at the start of Wednesday’s listing. NZD is worst despite good data from the labor market. The surprising increase in crude oil inventories in the API report is at the WTI price.
The stock market in Asia, on the one hand, wants to use the strong finish of Wall Street, but to stir up fears about trade disputes quenches optimism. Japanese Nikkei225 grows by 0.8% with the help of USD/JPY, but the Chinese Shanghai Composite is losing 0.7% today.
On Wednesday, the 1st of August, the event of the day is, of course, the FOMC interest rate decision and statement release, but there is plenty of other interesting data to be posted. China will reveal Markit Final Manufacturing PMI data, Eurozone and the UK will post PMI Manufacturing data and the US will issue ADP Non-Farm Employment Change, ISM Manufacturing, and Crude Oil Inventories data.
Crude Oil analysis for 01/08/2018:
The PMI index for China’s industry slumped to 50.8 from 51 in July, which is the weakest result in eight months and foments worries about slowing recovery. The publication coincided with reports of sources similar to the White House, according to which the administration is considering higher tariffs on goods imported from China worth USD 200 billion.
WTI oil remains at the lows after the weak Tuesday’s session. At night, an additional negative impulse was the API report, which pointed to an increase in crude oil inventory last week by 5.6 million barrels. The consensus against today’s DoE data suggests a drop in inventories by 2.3m bbl. WTI has stopped falling at 68.05 this morning it is up to USD 68.45 at the time of writing.
Let’s then take a look at the Crude Oil technical picture at the H4 time frame before the inventories data are published. The market bounce did not last long and the local lower high at the level of 70.54 was made before the price slumped again. The next target for bears is seen at the level of 67.59 and the short-term bearish outlook is supported by the weak RSI and weak stochastic indicator. Only the internal trend line support, marked in gold on the chart, is temporary saving the price to plummet even further.