NAFTA trade deal is a long way off, despite the U.S. compromise on auto content demand. The globeandmail reports that the three nations are still far from reaching a deal to renew the trade agreement. Hopes for a broad agreement in the near term were dashed yesterday following news that U.S. trade Representative Lighthizer will not attend the Summit of the Americans in Peru, with the Deputy U.S. Trade Rep Mahoney attending instead. Lighthizer had planned to meet with Canada’s Foreign Minister Freeland and Mexico’s Economy Minister Guajardo on the sidelines of the summit to discuss the latest on NAFTA, according to Bloomberg’s sources. Meanwhile, the WSJ reports that “Japan welcomed news that the U.S. was looking to rejoin the Trans-Pacific Partnership trade deal,” but President Trump was less enthusiastic on Twitter, saying he “would only join TPP if the deal were substantially better than the deal offered to Pres. Obama.” As for China, the White house plans to escalate pressure, according to the WSJ, “confident that its hard-line strategy is working.”
USOil prices were up 0.5%,early today posting a fresh 40-month high of $67.75. However it was traded softer before the IEA announced that the global supply glut is almost over, noting that crude stockpiles are near to falling below the five-year average target. The buoyant risk appetite tone, reflected in firmer global stock markets, has also remained a backdrop support for oil price. Technically-wise, today the asset is presented a 1.4% loss since morning, back to the daily pivot point at 66.75. Regardless the swift lower, the asset managed to held above the intra-day S1 at 66.30, but most significantly above the strong support of the 50-period EMA in the hourly chart, at 66.54. The 50-period EMA is well supporting USoil since last week.
Hence with the hourly chart, looking ready to form a Morning star and along with momentum indicators remaining in the bullish view of the asset, therefore we still believe in the continuation of the uptrend for USoil and a possible retest of today’s resistance at 67.70 and R2 at 68.15. Both hourly and Daily momentum indicator are sloping in the positive terittory since April, with MACD above neutral and RSI at 54 looking upwards.
In long-term, only a break below the round 65.00 level or the 20-DAY MA at 64.20, could suggest a reversal to the downwards for the asset.
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