All the news today will be on the Hurricane Dorian, but there are several key reports coming out. Expect Oil WTI to make major moves if the hurricane shifts.
USD strengthens against EUR and moves horizontally against GBP and JPY.
USD is growing amid market expectations for the continuation of the trade negotiations between the US and China. On the eve, the Ministry of Commerce of China confirmed the desire of the Chinese authorities to avoid the escalation of trade tension and the willingness to solve problems calmly. US President Donald Trump said the exchange of views between the parties is ongoing, and new contacts are planned for the coming weeks. In general, investors expect results from the current intensification of the negotiation process. However, experts note that there is no significant progress expected. Moreover, the Chinese authorities are preparing to the prolongation of the crisis, as evidenced by their recent measures to stimulate domestic demand.
EUR is weakening against its main competitors – JPY, GBP, and USD.
EUR is under pressure of the negative economic statistics. The volume of retail sales in Germany in July fell more than the market expected by 2.1%, confirming the serious problems of the German economy. EU consumer price index in August remained unchanged at 1.0%. Core CPI also did not change and amounted to 0.9%, although the market was expecting growth to 1.0%. A series of recent negative German and European data are forcing the market to wait for the ECB to take action already at the next September meeting. However, recent comments by regulator members disappoint traders. So, a member of the Executive Board of the ECB Sabine Lautenschlaeger said that European economy does not need a large package of support measures yet. Regulatory official Klaas Knot noted that the introduction of an asset purchase program is not yet necessary.
GBP weakly strengthens against EUR and JPY but moves horizontally against USD.
British investors continue to monitor the situation around the suspension of parliament by Prime Minister Boris Johnson. The Scottish High Civil Court refused to set aside this decision and adjourned the hearing until next week. On Tuesday, it will hear the legal arguments of the parties, after which the final decision will be made. Labor officials said they were initiating an emergency debate in parliament to prevent Johnson from pulling Britain out of the EU without a deal. Meanwhile, the Prime Minister promised to increase the intensity of negotiations with Brussels. Now, consultations will be held twice a week.
JPY is weakening against GBP today, is strengthening against EUR and is moving horizontally against USD.
Japanese economic statistics published today was ambiguous. The unemployment rate in July, instead of the expected growth up to 2.4%, fell to 2.2%, which is the minimum over the past 26 years. The volume of industrial production in July grew much more than the market expected, by 1.3%. The increase was due to an increase in the production of cars and chemicals. At the same time, retail sales in July fell immediately by 2.0% instead of the expected 0.6%.
AUD is weakening against JPY today and moves horizontally against EUR, GBP, and USD.
Published July data from the Australian construction market were negative. Sales of new housing decreased by 7.2%, and Building Approvals fell by 9.7%.
Today, oil prices are being corrected downwards.
Prices are dropping despite hurricane Dorian approaching US shores. It is predicted that the state of Florida will be hit, which could lead to a decrease in oil production and the production of petroleum products in the United States. In the evening, the publication of the Baker Hughes report on active oil platforms is expected. Previously, the number reduced from 770 to 754 units. The continuation of this trend may support the instrument.
Shares of General Electric are trading at a 7-month low, continuing to decline since the end of July, having lost more than 22% in value. Previously, the company raised its forecast for financial indicators for 2019, while a big problem for investors is the company’s debt burden of USD 105 billion. General Electric plans debt servicing by selling its assets by the end of 2019, including part of GE Capital’s assets for USD 8 billion and the biopharmaceutical business for USD 21 billion, and is also looking for a buyer to sell 50.4% in Baker Hughes for USD 11 billion.
During the last week the stock of General Electric dropped by 5.85%. S&P 500 went up by 0.06% within the same period.
|Take Profit||7.25, 6.80, 6.40|
|Stop Loss||7.90, 8.25|
|Key Levels||7.15, 7.75, 8.30, 8.80, 9.30|
|Take Profit||9.10, 9.50|
|Key Levels||7.15, 7.75, 8.30, 8.80, 9.30|
If the price consolidates below the support level of 7.75, one may consider selling #GE. Potential profits should be locked in by orders at 7.25, 6.80 and 6.40. Stop loss — 8.25.
If the price consolidates above the level of 8.30, one should expect the company’s shares to correct. The movement potential is aimed in the area of 9.10–9.50. Stop loss — 7.80.
Implementation time: 3 days.
Support and resistance
The emitter shows “bearish” tendencies. At the moment, the company’s shares are testing key extremes. Local support and resistance levels are 7.75 and 8.30 respectively. Company’s shares technical correction is possible in the near future. Indicators show contradictory signals: the price has consolidated below MA (50) and MA (200), and MACD histogram started to rise. Positions are to be opened from key levels.
Comparing company’s multiplier with its competitors in the industry, we can say that #GE shares are neutral.
Resistance levels: 8.30, 8.80, 9.30.
Support levels: 7.75, 7.15.