Trading on financial market is unfolding in the background of declines on the Chinese stock exchange, where investors are debating how worries about commercial wars affect the sentiment in business. The political risk from Germany weighs on the EUR, and Trump's activity on Twitter weakens oil.
Over the weekend, the global investors have received PMI indices from China, which remain in the expansion area, although indicators for the industry are weakening. PMI for services in June increased to 55 from 54.9, and for the industry, it dropped to 51.5 from 51.9. Today, the private Caixin PMI for the industry pointed to a slight decrease to 51 from 51.1. The Shanghai Composite stock market, it loses 1.7%, dictating the sentiment for other markets. Japanese Nikkei 225 is 2.2% lower.
Crude oil starts the week with a slump of 1%. after a week-long comment by President Trump on Twitter, he talked to the King of Saudi Arabia about an increase in production by 2 million bp. The White House and the Saudi press agency issued statements that the parties are discussing what to do with mining losses, but no decisions have yet been made. WTI is trying to bounce back to $73 this morning.
On Monday 2nd of July, the event calendar is light in important data releases, but the global investors should pay attention to PMI Manufacturing data releases from the whole Eurozone and later on, to the ISM Manufacturing data from the US.
EUR/USD analysis for 02/07/2018:
EUR is under pressure from events on the German political scene. CSU leader Horst Seehofer resigned from the position of the head of the Ministry of Interior and leadership in the party, which is the result of an immigration dispute in the government. According to Seehofer, the findings at last week's EU summit are unsatisfactory, as they will not reduce immigration to Germany. The risk of the coalition breaking up is rising, which is not a good news for the EUR.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. EUR/USD has been falling since the beginning of the trading week, from 1.1675 to 1.1630. The 50% Fibo at the level was too strong level for the bulls so far and the price is starting to fall again. The market conditions are slightly overbought at this time frame, so the bearish bias is being supported. The key support zone is seen at the level of 1.1509 - 1.1542.