EURUSD pushes over 1.11 after peace talks, ahead of German inflation data. Oil claws back some losses ahead of EIA data.
EURUSD pushes over 1.11 after peace talks, ahead of German inflation data
EURUSD rallied just shy of 1% yesterday and is climbing again today.
The euro has pushed over 1.11 following constructive Russia, Ukraine peace talks. Russia vowed to pull back military activity from around Kyiv. However, the West remains skeptical, which is limiting gains. The market may need to see the words translated into actions before further gains can be realized.
In addition to the ongoing peace talks, there is plenty of data to grab investors’ attention. German inflation will be the key release, with consumer prices expected to jump to 6.7% YoY in March, up from 5.5%.
Eurozone economic sentiment is also due, and a speech by ECB’s Christine Lagarde could provide more clues as to when the ECB is looking to hike rates.
The USD is falling on safe-haven outflows. ADP employment data is due to show 450k jobs added in March.
Where next for EUR/USD?
After several days of consolidation around 1.10, EURUSD tore higher yesterday, running into resistance at 1.1140, the March 17 high. The RSI supports further upside. However, this price would need to push over 1.1140 to expose the 50 sma at 1.1180, also the November low.
On the downside, if buying momentum eases, the pair could slip back to support at 1.0950 before bringing the 1.08 2022 low into focus.
Oil claws back some losses ahead of EIA data.
Oil prices extended the selloff on Tuesday, falling around 8% at the start of the week on optimism surrounding the Russia, Ukraine peace talks.
Today, oil prices are clawing back losses reflecting some skepticism over Russia’s promises and amid ongoing concerns about supply. API data revealed that crude oil stocks fell by 3 million barrels, triple the draw expected, highlighting how tight the market is.
EIA data will be released later ahead of the OPEC meeting tomorrow, where the oil cartel is not expected to increase output beyond the small planned raise.
Meanwhile, on the demand side of the equation, rising COVID cases in China and more lockdown restrictions are hurting the demand outlook, keeping gains limited.
Where next for WTI crude oil?
WTI rebounded off the 50 sma yesterday for the second time in two weeks. The long lower wick on the candle shows little acceptance at the lower levels.
The RSI is neutral, suggesting that we could see some consolidation here. Sellers will be looking for a move back below 100.00, the fundamental psychological level. But the 50 sma at 97.00 is critical support.
On the upside, 110, the round number, and falling trendline resistance could offer resistance, with a move over this level bringing 116.00 into focus.
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