Dollar Rebounds On G20 Summit And Falling Yields

The US dollar was seen posting some moderate gains on Tuesday. This marks the first bullish close since the previous four consecutive bearish declines. The G20 summit is due to start over the week where President Trump and China’s Xi are due to meet.

Global yields continued to fall. St. Louis Fed Chair, Bullard hinted at a 25bps rate cut at the July meeting. The RBNZ held its monetary policy meeting in the overnight session and left the official cash rate unchanged at 1.50%. However, the RBNZ hinted at more rate cuts over the course of the next few months.

Euro Losses at 1.1400 Handle

The common currency was bearish on Tuesday just after the rally pushed the currency to the 1.1400 handle. The declines come amid any major economic news out of the Eurozone. Italy’s deficit continues to remain one of the prevailing narratives. However, the declines in the euro came due to a stronger greenback which is on track to post the second day of consecutive gains. On the economic front, Germany’s GfK consumer confidence report is due to come out later today.

Will the EUR/USD Retrace Lower?

The reversal off the 1.1400 handle comes on a potential profit taking. The currency pair has extended strong declines since hitting this level. The short term support is found at 1.1339. If EUR/USD fails to rebound at this support, we expect to see a sharper correction. This will pull the euro lower to the 1.1250 level. To the upside, the currency pair could remain range bound within 1.1400 and 1.1339.

EURUSD

 

Crude Oil Rises on Inventory Drawdown

WTI crude oil prices broke past the sideways range established over the past two days. WTI crude oil closed at $58.72 on Tuesday. The gains came after the weekly inventory report from the American Petroleum Institute (API) showed a larger than anticipated drawdown in stockpiles. API’s weekly inventory saw crude oil stockpiles reporting a drawdown of 7.55 million barrels for the week ending June 20th. This was well above the median estimates of 2.89 million barrels in drawdown.

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