16.09.201910:56 Forex Analysis & Reviews: Review of EUR / USD and GBP / USD pairs on 09.16.2019: Aggravation of the oil wars

Everyone now talks about an unprecedented attack on the oil refineries in Saudi Arabia. As a result, the kingdom reduced the volume of black gold production by at least half. Everything is quite simple with the guilt since the Yemeni Hussites immediately took responsibility for the attack, threatening that if Saudi Arabia does not stop the bombing of Yemen. Then, the attacks will continue. True, the United States has appointed Iran guilty and has already threatened the Islamic Republic with all kinds of heavenly punishments. In any case, an attack on the largest oil refinery in the world and a reduction in production by the largest exporter in the world immediately led to a sharp jump in prices for black gold. Panic is aggravated by statements that eliminating the consequences of the attack and returning to the previous volumes of production, as well as export, which will require not just days, but weeks and possibly months. This threatens a shortage of oil in the world market. Therefore, it is not surprising that traders are somewhat worried. Moreover, there is a risk of repeated attacks. In addition to the next threats against Iran, it is true that the United States tried to calm the world public a bit. They were saying that they would open strategic oil reserves to prevent a shortage of black gold if necessary but it didn't help much. At some point, the growth in oil prices reached 19.0%, which can be called a record growth in history. Nevertheless, there is a direct correlation between the price of oil and the dollar. When black gold rises in price, portraits of dead American presidents lose value. Moreover, there is a risk of repeated attacks.

However, all of these will not have a significant impact on the position of such currencies like the pound or the single European currency. To achieve this, just look at what was happening on Friday, when these currency pairs stood rooted to the spot. Although, the data on retail sales in the United States clearly should have been a reason for revival. The fact is that they accelerated from 3.6% to 4.1% instead of slowing down the growth rate of retail sales from 3.4% to 3.2%. It was not the only growth that happened as the previous results were also revised upwards. This fully compensates for the negative caused by lower inflation. That is, the profit of American companies is not in danger, rather they can increase their revenue. Consequently, the Federal Reserve does not have much to worry about and reduce the refinancing rate. So for now, investors cannot understand exactly what they should expect from the upcoming meeting of the Federal Committee for Open Market Operations. Here are the quotes standing still.

United States Retail Sales Growth:

So it turns out that until the meeting of the Federal Committee on Open Market Operations, which will be held on Wednesday. Investors will remain cautious and the single European currency will remain in the region of 1.1050 - 1.1100.

For the pound, the situation is somewhat more interesting since it is under pressure from a very serious overbought, and political uncertainty. According to the logic of things in anticipation of the meeting of the Federal Committee on Open Market Operations, these imbalances should be addressed, but the panic in the oil market creates some difficulties in achieving such a good goal. Therefore, the pound will be in the region of 1.2425-1.2500, demonstrating a tendency to move to the lower end of the range.