EUR/USD hovers at multi-month lows ahead of US jobless claims, GDP & PCE. WTI under pressure after yesterday's rebound.

EUR/USD hovers around multi-month lows ahead of US data

Rising COVID cases and tighter lockdowns in Europe have dragged on demand for the Euro in recent sessions (FXE, UUP).  

Concerns over the impact of the latest restrictions on the economic recovery has overshadowed strong PMI data on Wednesday and better than forecast German GFK Confidence April -6.2 vs -12.7 March & -11.9 exp. 

ECB’s Christine Lagarde to speak 

US Dollar trades at 4 month high on improved outlook. Fed speak in focus as well as US GDP, jobless claims & PCE inflation data coming up. 

Where next for EUR/USD? 

EUR/USD has been trending lower since the start of the year. It trades below its three month descending trendline and trades below its 200 & 100 sma indicating a bearish bias.  

The RSI is also in negative territory below 50 but above the oversold level of 30 indicating there could be more downside to come. 

Any move lower needs to break through support at 1.18 round number and weekly low. A break through this level could open the door to support at 1.1740 low November 11 and 1.1700 round number. 

Any attempt of a recovery would need to re-take the 200 sma at 1.1870 ahead of strong resistance at 1.1990/1.20 the round number, descending trend line resistance and last week’s high. 

WTI crude oil under pressure

WTI has been on a wild ride this week. After sliding over 6% on Tuesday, crude oil rebounded almost 6% on Wednesday.  

Today oil is slipping lower as concerns regarding future demand overshadow the Suez Canal disruption. 

With COVID cases rising rapidly in India and tighter lockdowns in Europe, demand concerns are dominating. 

Where next for WTI? 

WTI has eased back from yesterday’s high of 61.34 and is trending lower around 60.00. 

 It continues to trade below the ascending trending which it broke below, along with the 20 sma, last week, which combined with the bearish MACD means WTI sellers are targeting the 50 sma at 59.00. 

A break through the 50 sma could see support tested at 58.15 low March 18, prior to 57.15, the weekly low and also a level which capped the selloff in mid February. Should the bears break down 57.15 support a deeper selloff towards 54.00 could be on the cards. 

On the flip side, any recovery would need to break above 6255 the 20 sma and 6350 the ascending trendline to gain momentum. Should the price close meaningfully over 63.50 then a refresh of the 14 month high of 67.90 could be possible (OIL).