Oil slips on OPEC meeting. US Q2 GDP expected to be revised higher

The much anticipated OPEC meeting held in Vienna yesterday saw the OIL cartel announce an extension of the oil production cuts until March 2018 as informally reported earlier. Yet, despite the announcement, crude oil prices fell sharply on the day with the NYMEX Crude oil futures falling 4.8% on the day.

The weaker oil prices also pulled down the price of other commodities including gold which slipped to $1256 an ounce. The US dollar managed to post some modest gains but remains largely flat, trading below the 97.50 handle.

In the UK, the Office for national statistics (ONS) revised down the first quarter GDP growth from the initially reported 0.3% QoQ to only 0.2%. The revised numbers came on account of consumers feeling the pinch with rising inflation and weak wage growth.

Looking ahead, the US Commerce department will be releasing the second revision to the first quarter GDP. Economists are expecting a higher revision to 0.9% from first estimates of 0.9%.

EURUSD intraday analysis

EURUSD (1.1197): The EURUSD attempted another go at testing the previous highs above 1.1200, but price action closed with a doji type candlestick pattern which indicates indecision in the markets.

However, for some meaningful correction to be expected, price action will need to follow through with a bearish close today, preferably below 1.1200. This will indicate a move towards the first support level at 1.1100. On the 4-hour chart, supporting the bearish view is the fact that yesterday's gains resulted in a lower high which suggests that some downside may be in store. The economic data today is relatively quiet as far as data from the eurozone is concerned, which will leave most of the heavy-lifting to the U.S. revised GDP numbers.

GBPUSD intraday analysis

GBPUSD (1.2888): The British pound tested the 1.3000 handle briefly yesterday before closing bearish. The price action currently is indicating further declines in GBPUSD. The bearish momentum came on a weaker than expected GDP numbers for the first quarter.

Support at 1.2800 remains as the key support to the downside which will be the initial target. On the 4-hour chart, the breakout validates the rising wedge pattern which will see price action extend the declines to 1.2800. In the event of a retracement, watch for the resistance level at 1.3000 region which is likely to be tested once again. However, in the near term, GBPUSD is expected to test the support at 1.2800.

EURCAD daily analysis

EURCAD (1.5105): The EURCAD was bullish yesterday as the Canadian dollar was hit by the selling in oil prices. The declines came as crude oil prices fell sharply despite the OPEC announcement to cut oil production.

EURCAD posted a bullish close yesterday back at the resistance level of 1.5102 - 1.5147.  The re-adjusted rising wedge pattern suggests that in the short term, price action could be seen moving slightly higher towards 1.5147, reaching the top end of the resistance level. Following this minor push, EURCAD could be seen eventually breaking out from the rising wedge pattern. Initial support at 1.4832 will be tested, followed by a test towards 1.4519.