G20 warn that trade tensions threaten global growth

The G20 meeting in Argentina, ended with a warning that trade tensions could threaten economic growth.

Also, global finance leaders, called for a boost in the dialogue to prevent trade and geopolitical tensions from hurting economic growth.

However little consensus was reached as to how to address a number of disputes regarding US actions.

As per analysts, the latest tone of language suggests a great deal of urgency about resolving these issues. Further headlines could create more volatility.

EUR/USD continued to rise on Friday mostly due to US president Trump’s latest comments, breaking the 1.1715 (S1) resistance level (now turned to support).

Despite the pair’s rise during today’s Asian morning, it could continue to move in a sideways manner today as it slowly stabilizes.

The pair could prove sensitive to any further comments by US president Trump as well as the financial releases during the American session.

Should the bulls take over the reins of the pair’s direction, we could see it aiming if not breaking the 1.1820 (R1) resistance level.

Should on the other hand the bears be in charge we could see the pair, breaking the 1.1715 (S1) support line and aiming for the 1.1640 (S2) support level.

Trump’s comments continue to weigh in on the USD

The Asian markets opening found the USD on the retreat, as it weakened against a number of its counterparts, however seems to have stabilized somewhat later on.

Trump’s comments weighed in on the USD, as the escalation of trade wars was intensified after the US president threatened to impose tariffs on every Chinese import, aiming for an amount of 500B USD.

Analysts, consider that increased uncertainty as a side-effect, could weigh in on the USD as the pressure or comments from the US side could prove to be unpredictable.

Any further negative headlines increasing uncertainty, could weaken the USD currently.

USD/JPY tumbled on Friday, breaking the 112.05 (R2) and the 111.30 (R1) support lines (now turned to resistance) and tested the 110.75 (S1) support barrier before stabilizing today.

It should be noted that the pair’s price action has broken the upward trend-line incepted since the 29th of May, hence we remove our bullish bias and see the case for a sideways movement today.

Please also note that the RSI indicator is in the 4 hour chart is below the reading of 30 implying an overcrowded short position for the pair.

Should the pair come under selling interest, we could see it breaking the 110.75 (S1) support line, opening the way for the 110.00 (S2) support hurdle.

Should it find extensive buying orders along its path we could see it breaking the 111.30 (R1) resistance line and aim for the 112.05 (R2) resistance zone.

In today’s other economic highlights:

In the American session we get Canada’s wholesale sales growth rate for May, the US existing home sales data for June and Eurozone’s preliminary consumer confidence indicator for July.

As for the rest of the week:

On Tuesday, we get Japan’s, Germany’s, France’s and Eurozone’s manufacturing PMIs, all for July.

On Wednesday, we get Australia’s inflation data for June, Germany’s Ifo Business Climate index for July and the US new home sales figure for June.

On Thursday, the ECB interest rate decision is due out and the US durable goods orders growth rates for June will be released.

On Friday, we get UK’s Nationwide HPI growth rates for July as well as the US GDP growth rate for Q2.