XAUUSD, H4 and Daily
The dollar edged lower after the softer industrial production print and as trade war concerns take hold again. U.S. imposed $50 bln in 25% tariffs as threatened on 1,102 Chinese product categories, which will begin to be collected from July 6. The Chinese immediately followed suit with prepared tariffs of their own. The administration has prepared a second list of $100 bln in tariffs as well amid the reprisals.
The USDJPY fell to 110.41 lows before heading back over 110.60, and EURUSD topped at 1.1625 from 1.1610. Wall Street opened sharply lower on trade concerns, while yields remained near session lows. Commodities on the other hand moved sharply lower, with Gold facing a big-big sell off the last 2 hours. The XAUUSD broke below the up channel identified since May 21 and drifted down to year’s low at $1,284.58, reverting back all gains earned in the last 21 days. This giant market move seems to be mainly driven by global trade war concern rather than by US data.
A closer look at today’s US data:
U.S. industrial production fell 0.1% in May, with capacity sliding to 77.9%, weaker than forecast. April’s 0.7% production rise was revised up to 0.9%, though the 0.7% March gain was bumped down to 0.5%. April’s initial 78.0% capacity use rate was nudged up to 78.1%. Manufacturing production dropped 0.7% versus the 0.6% April gain (revised from 0.5%). Declines were broad-based. Motor vehicles and parts tumbled another 6.5% after dropping 2.2% previously (revised from -1.3%). Machinery production slipped 0.9% from 2.3%, with computer and electronics unchanged after the 1.4% prior increase (revised from 1.2%). Utilities were up 1.1% from 1.9% (revised from 1.9%). Mining was 1.8% higher after rising 1.0% (revised from 1.1%).
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Andria Pichidi
Market Analyst
HotForex
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