Markets are jittery this week after a series of not so good manufacturing data from the world's two largest economies and consumers of oil. China's Manufacturing PMI dropped to contraction territory at 49 in June, from 50.2 prior. Data from the US stayed in expansion territory with the 52.8 print, which however was lower than the 53.0 prior.
These figures play into recession fears, in the aftermath of last week's downgraded forecasts from the International Monetary Fund and the contraction of the US economy by 0.9% in the second quarter, according to the first reading.
Today, sentiment sours as US House Speaker Nancy Pelosi is expected to visit Taiwan, which has increased tension between China and the US, further testing the latter's policy of strategic ambiguity.
Chinese President Xi Jinping had told US President Biden during their recent call, that US "should honor the one-China principle", according to the country's Foreign Ministry. 
Back in May the US President had vowed to defend Taiwan if needed, when asked, adding that "That's the commitment we made. That's the commitment we made".
OPEC+ Output Decision Looms
In early June the Organization of the Petroleum Exporting Countries (OPEC) and ten allies including Russia, a grouping commonly referred to as OPEC+, had decided to accelerate its output increases for July and August by bringing forward the September adjustment.
OPEC+ now meets on Wednesday and markets will be waiting to see if it will hold production in September or they will add more oil to the market. President Biden's recent visit to the Middle East and Saudi Arabia – the de facto leader of OPEC and one of the few countries that probably have the ability increase capacity – did not produce any commitment.
However, Special Presidential Coordinator for International Energy Affairs Amos Hochstein who had accompanied President Biden to the aforementioned trip, had expressed confidence for "a few more steps", speaking on CBS. 
Markets have been gyrating between supply and demand concerns, since on the one hand prospects of economic downturn hurt demand, but on the other hand the oil market is tight and undersupplied.
USOil starts the new month on the back foot, on the heels of its June-July slump, having erased half of the rally from late-2021 lows to the March 14 year highs.
This has put near-term risk to the downside and makes the commodity vulnerable to 86.55, although a strong catalyst will be required for a breach, which would bring 78.23 in the spotlight.
In spite of that, USOil has showed resilience over the last couple of weeks and we could see a push towards 100.00, but the region up to 102.00 and the EMA looks unfriendly. Successful closes above the EMA200, will put bulls on the drivers, but it does not inspire confidence for that and above-105.00 recovery.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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