US futures pointed to a lower open after Robert Mueller completed his investigation on the Trump campaign. His highly-anticipated report was forwarded to the Justice Department on Friday, and yesterday the attorney general released the main conclusions. These conclusions were favorable to Donald Trump, who has spent the past two years calling the investigation a witch hunt. In his report, Mueller said that Trump and his campaign did not coordinate with Russia. He also found it difficult to exonerate the president on the charge of obstruction of justice. While the conclusions of Mueller’s probe are now public, the political circus in the US will continue as the country readies for the next election.
The price of crude oil declined in early trading as investors continued to worry about slow economic growth. This was after the weak PMI data released from Europe on Friday. The data showed that the Germany manufacturing PMI had declined to 44.7 in February, which was the lowest level in almost a decade. In France, the PMI declined to 49.8 while in the EU27, the PMI declined to 47.6. In the United States, the manufacturing PMI declined to 52.5, which was lower than the expected 53.5. The slowdown in the manufacturing activity is a major signal that the economy is slowing down, which tends to impact the crude price negatively. In addition to this, a report by Baker Hughes showed that oil rigs in the US continued to decline.
The euro was little moved after Italy moved ahead with its plan to sign-up to the China’s Belt and Road Initiative (BRI). The plan was signed in Rome, where Xi Jinping visited in his six-day trip to Europe. This decision comes at a time when many EU countries are deliberating on whether to defy Donald Trump again as it relates to awarding Huawei contracts on 5G implementation. It is expected that Washington, and other EU members will continue to criticise Italy for this decision. The BRI program has been accused as a way of trapping developing with toxic Chinese debt.
EUR/USD
On Friday, the EUR/USD pair declined sharply after the release of EU’s PMI numbers. The pair reached a low of 1.1272, which was the lowest level since March 15. In the hourly chart, the price is in the middle line of the Bollinger Bands and below the important diagonal support shown below. The RSI has emerged from a low of below 30 to the current 40. The pair could continue the downward trend to test the important support of 1.1250.
XBR/USD
The price of Brent crude oil started to decline on Thursday, when it reached a high of $68.50. Today, the XBR/USD pair declined to 65.95. On the hourly chart, this price is between the lower line of the Bollinger Bands and the middle one while the average directional index has declined to 28. The Parabolic SAR is above the price. The current price is also along the 50% Fibonacci Retracement level. The pair will likely continue moving lower, to test the important support of 65.70.
GBP/USD
The GBP/USD pair was little moved in early trading ahead of an important week on Brexit. The pair is currently trading at 1.3193, which is slightly lower than the previous high of 1.3222. The current price is between the 61.8% and 50% Fibonacci Retracement level. The price is also slightly above the 50-day and 25-day moving averages. The pair will likely be volatile this week as the initial Brexit deadline looms.
