The US dollar index is consolidating near 102.60. Market participants are trying to assess the likelihood of more than one rate hike in the US before the end of this year. Yesterday data on activity in the manufacturing sector was released. The manufacturing PMI fell to 46 points, which indicates stagnation. After the release of the report, fears about a recession in the US returned to the market again. In addition, data on personal consumption expenditures were published last Friday, indicating a decrease in inflationary pressure in the American economy. Against this backdrop, the Fed may abandon its plan to raise interest rates two more times. Given the above, the dollar retains the potential for decline.
SELL STOP 102.40/TP 101.80/SL 102.60
GBP/USD
The British currency is trading near 1.2700. Yesterday, the June data on the index of business activity in the manufacturing sector were published: the index fell from 47.1 points to 46.5 points. Experts note that the indicator has been in the stagnation zone for the eleventh month due to a decrease in the volume of internal and external orders, as well as an increase in the cost of raw materials and components. In general, the slowdown in manufacturing activity increases the risks of a recession, although so far the national economy is supported by a strong services sector. For now, traders are more focused on the prospects of another rate hike in July. In case of further policy tightening, the growth of the GBP/USD pair will continue.
BUY STOP 1.2710/TP 1.2800/SL 1.2680
BRENT
Brent is updating local highs, holding near $75 per barrel as new output cuts take effect: Saudi Arabia will reduce oil production by 1 million barrels per day this month. Oil buyers are also supported by positive manufacturing activity data from China, where the index is above 50 points. Prices are rising on expectations of a significant decline in US oil inventories against the backdrop of a long weekend. Analysts expect oil inventories to have fallen by 10 million barrels last week. Given the above, we recommend holding long positions in oil.
BUY STOP 75.50/TP 78.50/SL 74.00
