USD Flat as Inflation Rises Slightly
A day after the Fed Chair Powell’s comments to Congress sent equities higher and the dollar lower, the markets were stabilizing. The US dollar closed the day flat, while the Dow Jones index broke fresh ground, testing the 27,000 milestone. US inflation showed a modest increase of 0.1% on the month while core CPI rose 0.3% on the month. The markets look to the producer price index data due later today.
Euro Muted to ECB Meeting Minutes
The European Central Bank released its monthly meeting minutes yesterday. The minutes revealed that policymakers were contemplating whether to restart the bond purchase program. Many members also grew concerned about the lack of inflationary pressures. The euro did not react much to the release of the minutes.
EURUSD Rebounds off Support
The common currency was seen reversing losses off the 1.1250 level of support. The current momentum could potentially establish further gains in the near term. The minor resistance level is seen at 1.1340. A retest of this level could keep the overall price action rather subdued.
Oil Rally Stalls as OPEC Expects Non-OPEC Production to Slow
The rally in crude oil prices took a pause on Thursday. OPEC said that its 2019 production forecast from non-OPEC will slow. Supply is expected to fall by 95,000 BPD for 2019. The prospect of a weakening global economy is also expected to dampen demand. The oil cartel also said that it expects the same levels of demand to continue into 2021.
Will Crude Oil Correct Lower?
After strong gains earlier this week, oil prices have stalled just below the 61.00 handle. This puts the range within the 61.00 and 57.50 levels for oil price. A breakout from this level will signal the next leg in the direction of the commodity. Further gains can be expected on a strong close above the 61.00 handle. Alternatively, a close below 57.50 will trigger further declines that could see a test of the 54.00 handle.
Gold Slips on US CPI Data
Gold prices pared gains on Thursday. The monthly inflation data from the US showed a modest increase in headline inflation. On a monthly basis, CPI grew 0.1% beating estimates of an unchanged print. But on a yearly basis, US inflation eased to 1.6% from 1.8% previously. The inflation report came a day after Fed Powell’s dovish comments sent the precious metal higher.
Can XAUUSD Breakout Higher?
The precious metal has been trading within the range of 1423 and 1383 levels for the past three weeks. Despite the gains earlier this week, gold failed to capitalize on the momentum. We expect the precious metal to remain range-bound within the said levels. A breakout from this range will establish the next leg in the direction of the prices.