The Euro rose to a third consecutive day against the Dollar, hitting its highest level in a week, at the expense of falling dollar levels against major currencies.
The decline in Inflation in the United States during the past month pushed the US Dollar to expand its losses against major currencies, which allowed the euro to complete its rise, especially with expectations that the pace of raising US interest Rates could be slowed down.
The EuroZone economy released its data today regarding the Employment Change Index during the fourth quarter of last year, with expectations of a rise of 0.3% from 0.4%. European Central Bank President Mario Draghi’s speech today is expected to affect the Euro’s movements significantly, while the markets focus on Retail and Producer Prices Data from the United States today.
The EURUSD pair’s success in breaching near resistance levels at 1.2410 will boost the optimism and push the price test to 1.2445. A return below 1.2380 resistance would temporarily ease optimism.
The US Dollar fell against the Yen in Asian trading on Wednesday for the fourth session on the back of the less than expected Inflation Data released from the US. Also affecting the Dollar, is President Donald Trump’s dismissal of the Foreign Secretary, Rex Tillerson and the possibility of imposing additional Customs Duties. The Yen has in addition, been able to maintain gains as demand for it has grown as a safe haven.
Despite the recent declines in the USDJPY pair, prices still have to break below stability at 106.25 in order to confirm a continued decline to breach the resistance levels close at 106.65. This would affect the recent bearish trend and cause the pair to proceed on a sideways trend.
The Australian Dollar strengthened during Wednesday’s session, having traded near a three-week high against the US Dollar yesterday. The Australian currency has also been supported by improved Economic Data in China and Australia.
Technical reading shows that prices are trying to catch a breath after the recent strong rally. With no signs of a general bullish trend change, a break of support levels at 0.7865 would allow prices to fall further and may test levels at 0.7845. On the other hand, a breach of near resistance levels at 0.7880 would re-establish a bullish trend, and possibly test the 0.7900 levels.
Gold rose during the Asian session on Wednesday to hit a one-week high, after rising for the second day in a row, with increase in safe haven asset demand in the markets. The US Inflation Data, which came in negative has also pushed the US Dollar lower against major currencies, on expectations that the Federal Reserve may ease Interest Rate hikes under unstable inflation. Other political developments from the US has also contributed to the demand for the precious metal.
Despite recent market rallies, prices still have to break above 1330 resistance levels to confirm a continued rally.
A drop below 1325 support levels would affect the recent uptrend and introduce a sideways trend.
Crude Oil prices fell during the Asian trading session on Wednesday for a third straight day as US Inventories of Crude Oil reported strong figures, according to the EIA. The EIA Report showed US Inventories of crude oil increased to 1.2 million barrels last week to reach 428 million barrels, compared with analysts’ expectations of a 2 million barrel rise.
The International Energy Agency (IEA) is expected to announce its most important week later today, with a 2.2 million barrel rise in inventories expected last week from a previous rise of 2.4 million barrels.
The renewed pressure on the price action of the WTI is likely to reinforce the previous bearish trend. A break below the support level at 60.65 will consolidate the pair and cause a test at 60.30 levels. A reversal above the resistance level at 61.00 would temporarily ease selling pressure.