At an event yesterday, Jerome Powell, the chair of the Federal Reserve, said that the magnitude of the projected rate cut at the upcoming Fed meeting was up for debate. He did, however, indicate that the Fed will definitely be cutting rates as early as July.
Meanwhile, the lack of progress in the US-China trade negotiations also hit the markets. Equities retreated while safe havens such as the yen and gold rose on the day.
Euro Posts Modest Gains on CPI
Inflation data for the eurozone showed that consumer prices edged higher. The headline inflation rate rose 1.3% on the year, beating estimates of a 1.2% increase.
The core inflation rate also nudged higher, rising 1.1%. Meanwhile, the European Parliament confirmed the appointment of Ursula Von der Leyen as the next Chairman of the European Commission, while Christine Lagarde was formally nominated as the next ECB Chairperson.
EURUSD Pares Losses, but Trades Flat
The currency pair recovered from the losses set earlier this week. However, price action continues to trade flat as the pair approaches the support/resistance level of 1.1250. With the new range formed between 1.1250 and 1.1188, we expect price to breakout from this range to establish further direction.
Crude Oil Falls on EIA Inventory Report
WTI Crude oil prices fell after the US. Energy Information Administration reported a higher than expected inventory. US crude oil stockpiles fell 3.12 million. This was more than the estimates of a 3.6 million decline in inventory. The data was shrugged aside as initial news reports indicated that Tehran was dropping its nuclear program, which was later denied.
WTI Breaks Below Key Support Level
The declines in oil prices continue for the third consecutive day. Price broke past the previously established support level near 57.50. While attempting to recover the losses, if resistance forms near this level, we expect oil prices to drop further. The next main support is at the 54.42 level.
Gold Rises to Fresh Six-Year High
The precious metal was once again seen rallying as price touched a new six-year high briefly at 1426 an ounce. The gains came following reports of a lack of progress on the trade talks between the US and China. The US economic data on housing was also disappointing leading to a modest risk-on sentiment.
XAUUSD Forms an Ascending Triangle
Gold prices edged higher, once again testing the previously established resistance levels near 1423. In the process, price action has formed an ascending triangle pattern. A breakout above the resistance could indicate further gains in the near term. The minimum upside is seen near the 1445 level. To the downside, if the resistance fails, we expect gold to find support off the minor rising trend line.
This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.
Authors' opinions do not represent the ones of Orbex and its associates. Terms and Conditions and the Privacy Policy apply.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.