CRUDE OIL PRICE WAVERS AHEAD OF BIDEN-SALMAN MEETING

The Australian dollar moved sideways after China recorded its slowest economic growth in two years. According to the National Bureau of Statistics, the economy expanded by 0.4% in Q2. On a QoQ basis, the economy contracted by 2.6%. This performance was mostly due to the recent lockdowns in places like Shanghai and Jilin. As a result, these lockdowns led to the closure of key factories like Nio and Tesla. Further data showed that industrial production rose by 3.9% in June while fixed asset investments rose by 6.1%. The Australian dollar tends to react to Chinese numbers because of the volume of trade between the two countries.

The euro and European stocks rose after Italy’s president rejected the resignation of Mario Draghi, the former ECB governor. At the same time, Italian bonds declined for three days straight while the spread between the German and Italian yields rose by 215 basis points. The Italian crisis adds to more woes that are facing the European economy. Other challenges are the ongoing energy concerns and the soaring inflation. As such, there are concerns over what will happen when the ECB hikes rates next week.

The price of crude oil moved sideways on Friday as investors waited for the outcome of Biden’s meeting with Crown Prince Mohammed Bin Salman. The two leaders are expected to deliberate on several issues about the region and oil prices. He will also privately lobby the country to increase production in a bid to lower prices. However, according to Bloomberg, Biden will leave the Middle East without making a public statement on increasing oil production.

The US dollar rose slightly after the latest retail and trade numbers from the US. The data showed that the headline sales rose by 1.01% in June even as inflation remained at elevated levels. Excluding the volatile food and energy products, sales rose by 1.0%. Meanwhile, the closely watch export and import prices rose by 0.7% and 0.2%. Still, these numbers will likely not change the Fed’s actions later this month. Most officials expect it to hike by either 75 or 100 basis points.

XBRUSD

The XBRUSD pair moved sideways as traders waited for Biden’s meeting with Salman. It is trading at 97.18, which is higher than this week’s low of 92.45. On the four-hour chart, the pair moved below the 25-day moving average. It has also formed a hammer pattern, which is usually a bullish sign. The MACD has also formed a bullish divergence pattern. Therefore, the pair will likely rise as sellers target the resistance at 100.

EURUSD

The EURUSD pair rose slightly as investors bought the dip. It rose to a high of 1.0040, which is slightly above this week’s low of 0.9950. On the four-hour chart, the pair moved above the 25-day moving average while the Relative Strength Index (RSI) and the Stochastic Oscillator are pointing upwards. Therefore, the pair will likely end the week in this range since there is no major scheduled economic data.

XAUUSD

The XAUUSD pair crashed to the lowest point since 2020 as demand for gold disappeared. The pair is trading at 1,701, which is below the important resistance at 1,784. It is along the lower side of the Bollinger Bands while the Relative Strength Index (RSI) has moved to the oversold level. The pair will likely continue falling since bears seem to be in control.