Recent judicial rulings in the US have established a new tariff policy constraint that exacerbates pessimistic market forecasts.
The US Federal Court of International Trade ruled to block the entry into force of global import duties imposed by President Donald Trump. The head of state was accused of exceeding his authority.
A three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the President the right to impose tariffs in the manner enacted by Trump.
A Manhattan court also declared that the US Constitution gives Congress the exclusive authority to regulate trade with other countries, which cannot be overridden by presidential powers aimed at protecting the economy. The ruling said, “An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government.”
The possibility of reinstating the initial international trade tariffs is now approaching zero. Markets have rallied, gaining confidence in the ability of other branches of government to neutralize administration actions that threaten economic growth.
The first reaction to this news came from US stock indices, only after the close of the American trading session. Looking ahead, reduced pressure on China, as the main consumer of oil, may stimulate demand for oil, including Brent crude. This will likely cause prices to speculatively rise toward the nearest resistance level at $68 per barrel.
The overall recommendation is to buy Brent crude oil.
The profit should be fixed at the level of 68.0. A Stop loss could be set at the level of 61.5.
The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
