This week was full of important events and economic data, which affected the movements of the markets markedly throughout the trading days of the week. The beginning was with Donald Trump, the American president who made his first visit outside the United States since taking office last January. He went to Riyadh and made a deal to sell weapons to Saudi Arabia, which came close to 110 billion dollars with options of rising it about 350$ billion over the next decade, In addition signed many agreements in various fields and meeting with a number of leaders of Arab and Islamic countries. Trump then went to Europe and met a number of European leaders and agreed to start a business plan on a US-EU trade agreement. The visit will end with the G-7 summit in Italy.
Eurozone finance ministers failed to reach a deal on a new bailout package for Greece and postponed the decision for next month's meeting. The meeting also touched on the start of formal negotiations with UK to get out of the European Union. As speculation mounted about the ECB starting to consider Tapering and raising interest rates as soon as possible, ECB President Mario Draghi made it clear in his recent speech that the ECB is committed to the full implementation of the quantitative easing program, and interest rates will not rise before the ending of asset purchases.
Also, attention was directed to UK, especially in the wake of the terrorist attack in Manchester city, which led the British pound to retreat against some of its rivals, but it was stable against the US dollar before it pulled back sharply during the last day of the week to the levels of 1.28. Later of the week, the UK's second estimates of GDP showed a slowdown in the first quarter of this year, driven by a sharp slowdown in consumer spending. On the other hand, the Conservative Party remains in the forefront of opinion polls ahead of the general election on June 8.
US equity markets rebounded during the week following reports about Trump's proposed budget plan, which could include cutting government spending of 3.6$ billion and reducing the budget deficit over the next 10 years.
Moody's agency downgraded China's credit rating for the first time in 28 years, citing high debt levels that would have a major impact on the Chinese economy. The move was strongly rejected by the Chinese government, calling it a reduction of the government's ability to bear the difficulties facing the economy.
In Canada, BOC’s rate statement was free from negative terms after keeping interest rates unchanged at 0.50% for the 15th consecutive month, supporting the Canadian dollar to rally strongly against most of its rivals.
Finally, what the markets expected on OPEC has achieved and the organization agreed with a number of oil producers from outside to extend the agreement of output cut for an additional nine months until March 2018, and the markets met the decision by pushing oil prices down significantly to 48.19$ before rising before the end of the week and currently trading at $ 49.50 a barrel.
On the technical side, we’ll take look at the most important movements this week as following:
The pair has dropped to the bottom line of the symmetrical triangle, breaking 1.1160 level and staying below it, we expect further decline to 1.1070. Current resistance will be at 1.1240.
Prices has fallen sharply after breaking the bottom line of the ascending channel besides the strong support at 1.2840, we expect further decline reaching 1.2760. current resistance will be at 1.2840.
As we expected in the morning report, USDJPY has pulled back after breaking support at 111.50 and reached 110.90, we still expecting further decline to 110.24. current resistance will be 111.50/80.
Gold breached the upper line of the symmetrical triangle, and we expect further rising targeting 1280$. Current support levels will be at 1260$ then 1250$.