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EUR/USD rises on ECB day, will Christine Lagarde & Co. disappoint? Oil jumps 10% in two days, where next?
EUR/USD rises on ECB day. Will Lagarde & Co disappoint?
EURUSD is extending yesterday’s rebound ahead of the ECB meeting today.
The ECB is not expected to change policy; however, with inflation at a record high and growth set to slow amid the fallout from the Ukraine crisis, the ECB could tweak its statement slightly for a more hawkish edge.
The ECB is expected to end its asset purchase program (APP) before hiking rates in Q3. Any hawkish commentary from ECB governor Lagarde could lift the EUR further. However, given the increasingly hawkish expectations, any disappointment could
Despite PPI inflation hitting a record high, the USD fell yesterday, which suggests higher consumer prices to come.
Today, USD is falling lower ahead of US retail sales, jobless claims, and US consumer sentiment.
Where next for EUR/USD?
After facing rejection at the 50 SMA, EUR/USD fell lower before rebounding off support at 1.08 yesterday. The rise above 1.09, combined with the bullish crossover on the MACD, keeps buyers optimistic about the further upside.
A move over 1.0950 could see buyers gain traction towards 1.10 the psychological level, bringing 1.11 the 50 sma into play.
On the flip side, any weakness in the pair could see EUR/USD test 1.08, 2022 low, ahead of 1.0730, the April 2020 low.
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Oil jumps 10% in two days, Where next?
Oil prices are edging lower after two days of gains which saw oil prices jump 10% and conformably back over $100.
Oil prices received a boost as supply fears returned to haunt the market. The IEA warned that from May, 3 million barrels of day of Russian oil will be absent from the market, up from 1.5 million barrels a day.
More Russian oil absent from the market, combined with easing lockdown restrictions in China boosting the demand outlook and OPEC+ still failing to reach its higher output quota, means that upward pressure could keep oil prices supported above $100 for now.
Oil shrugged off the 9 million jump in supply due to reserves’ release. However, gasoline stocks fell by 3.6 million, more than forecast.
The elephant in the room is whether Europe will impose Russian oil and gas restrictions. It is unlikely that they would go ahead and shoot themselves in the foot in such a severe way by banning Russian oil and gas. But as long as the elephant remains in the room, oil prices will hold onto that risk premium.
Where next for oil prices?
Oil rebounded from the April 11 low of 92.00. the retaking of the 50 sma, rising trend line resistance, and the receding bearish bias on the MACD suggest there could be more upside to come.
Buyers will look for a move over 103.80, yesterday’s high, to focus on 108.00, the March 30 high.
On the flip side, a break below the 50 SMA and rising trendline support and psychological level at 100 could see the bears push the price back towards 95.00
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