The first quarter GDP report released by the Department of Commerce rose 3.2% unexpectedly.
This was a higher pace of increase in the GDP comparing to the last quarter of 2018 where the US economy rose just 2.2%. The upbeat data pushed the greenback to a new one and a half-year high. But the markets closed mixed amid profit-taking across the board.
Euro Manages to Close with Modest Gains
The euro was seen trading somewhat choppy on Friday. Prices initially fell to new lows of 1.1110 before recovering. By Friday’s close, the currency closed in the positive. A string of strong economic reports from the US was in stark contrast to the weakening fundamentals from Europe. Despite the small gains from Friday, the euro still remains weak.
Can EURUSD Maintain the Recovery?
After slipping to a fresh two-year low, the EURUSD closed with an outside bar on Friday. On the intraday charts, the currency pair closed above the support of 1.1140. If this support holds, we expect price to possibly retrace higher. The initial target to the upside is seen at 1.1226 where resistance could form, keeping the gains in check.
Trump Knocks Down Oil Prices
Oil prices were down 2.9% on Friday. The declines came after news sources cited that Trump told OPEC to tame fuel costs. The sharp declines in oil prices came after crude oil surged earlier in the week. The import waivers to eight countries came to an end, cutting off Iran from the international oil markets. The supply concerns lead to higher oil prices.
Can WTI Crude Oil Recover from Friday’s Losses?
WTI Crude oil fell to a three-week low by Friday’s session, closing at $62.83. Price broke past the initial support at 64.55. The declines to $62.83 coincide with the minor resistance formed around April 3rd. There is scope for oil prices to rebound off this level and possibly maintain a sideways trend for a short period. Watch for a retest of $64.55 where resistance could form.
Gold Rebounds on Profit-Taking
Gold prices surged the most last week on Friday, closing with 0.70% gains. The rebound in gold came just after the US preliminary GDP report was released. Despite a strong upside surprise in the GDP, gold managed to jump higher, erasing the losses from earlier in the week.
Can XAUUSD Maintain this Upside?
Price closed at the 1285 handle on Friday. This is a level that we have been closely watching. Further upside could push gold to as high as 1290 levels. However, for the moment, it is best to remain on the sidelines. Price needs to reverse around the current levels to maintain the downside. But a failure to do so could see the precious metal reversing course and pushing higher above 1290.