The USD was trading mixed on Wednesday despite positive headlines from China. The first quarter GDP report showed China’s growth rising at a pace of 6.4% beating estimates of 6.3%. Industrial production grew 8.5% on a year over basis. However, risk appetite was kept in check by the close of business.
Eurozone Trade Surplus Rises to 11-Month High
The trade surplus in the eurozone grew to the highest levels in a year in February.
Data from the statistics agency Eurostat showed that on a seasonally adjusted basis, trade surplus grew to 19.5 billion euro from 17.4 billion in January. This was the biggest jump since March 2018. However, the euro did not react much to the data.
EURUSD Eases Back to the Trendline
The lack of momentum in the currency pair has pushed it back to test the minor rising trend line. As long as prices remain supported by the trendline, we expect to see some upside with the 1.1330 level of resistance as the target.
The flash PMI’s are due out later today. The data could potentially decide the outcome in the direction. The lower support at 1.1276 could hold the declines, if any, in the short term.
Oil Slips Despite Weekly Draw
WTI crude oil prices failed to capitalize on the gains from Tuesday as it slipped close to 0.95% yesterday. The EIA’s weekly crude oil inventory report showed a draw of 1.4 million barrels. This was against the estimates of a 1.6 million build up. Tuesday’s API inventories already signaled a draw in the inventories earlier this week which pushed oil prices higher on Tuesday.
Can Oil Decline Further?
The reversal in crude oil comes as price initially rallied to test the previous highs near 64.55. However, failure to gain traction led to oil prices giving up Tuesday’s gains. Crude oil prices seem to have settled within the range of 64.55 and 63.20. A breakout from this range is needed to establish further direction in the commodity.
Gold Extends Losses for the Fifth Consecutive Session
Gold prices continued to fall for the fifth consecutive session, though the pace of declines has become limited. The Fed’s beige book report was upbeat as the report indicates that the US economy expanded at a moderate pace in March and early April. Some of the regional districts even reported strengthening.
Is it Time for a Correction in XAUUSD?
After declining for five sessions, gold prices could attempt to post a minor correction. This comes as price sits near the 200-day MA on the daily chart. An intraday close above 1273.50 is needed to confirm this view. The previously held support at 1285 – 1290 remains the prime target for resistance to be tested but further gains are unlikely.