Markets steady after wild swings

EUR/USD => The index rises towards 1.04
Oil => The rises commodity above $107
Gold => The metal steadies below $1830

EUR/USD steadies at 5-year low

EUR/USD steadies after falling to a 5-year low in the previous session and posting its biggest loss since March 2020.

The pair tumbled 1.2% yesterday after US wholesale inflation data sparked fears of a more aggressive Fed and as tensions between Russia and the West escalated, hitting demand for the euro. Today attention shifts to US consumer confidence data and comments from ECB Vice President Luis De Guindos as momentum builds at the ECB for a July interest rate hike.

The markets will be looking for further hints or clarification from De Guindos. Eurozone industrial production is expected to fall, and Finland’s application to join NATO could keep Russia’s tensions in focus.

EZ industrial production Expected: -2% (2.7%) Previous: 0.7%

Markets steady after wild swings

Where next for the EUR/USD?

In a bearish chart, EUR/USD trades below its 20 & 50 sma.

After some consolidation between 1.0480 – 1.0650, the pair broke lower yesterday, tipping the RSI into oversold territory. Bears will need to push below 1.0354, yesterday’s low, to continue the bearish trend towards 1.0340, the 2017 low, and 103 round number.

However, the oversold RSI could play a role in the pair’s recovery with a move over 1.0480; the previous support needed to bring 1.0640 back into play.

Oil rises but is set for a weekly decline

Oil prices are rising for a second straight session but are set for the first weekly loss in three weeks as investors weigh up slowing growth fears and COVID lockdowns in China against concerns of slowing Russian oil supply.

Prices continue to be supported by the prospect of an EU ban on Russian oil and Ukraine halting Russian gas transit through its key gas route. The EIA said in a report that it sees Russian output falling by 3 million barrels a day in July, which will keep the market tight and oil comfortably over $100.

Gold rises from 3-month lows

Gold is attempting to recover after losing 1.6% in the previous session.

Gold tumbled yesterday after the USD soared following US wholesale inflation data. PPI fell by less than expected, raising concerns that the Fed would need to aggressively hike interest rates to tame inflation.

Fed Chair Powell has since reassured the market that 50 bp rate hikes are more likely than 75bp, helping the USD edge lower, lifting gold from 3-month lows. Attention now shifts to US consumer confidence data which is expected to fall in May.

USD dynamic will continue to play a vital role in Gold’s price action.

U.S. PPI April YoY

U.S. consumer sentiment

Actual: 11% (0.5%)

Expected: 64 (1.2)

Previous: 11.5%

Previous: 65.2


Support can be found at 1827.5 (May low) and 1810 (February 2 high).

Resistance for the pair can be seen at 1836 (200 sma) and 1848 (rising trendline resistance)

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