The risk sentiment in the market was improving on Thursday, but investor concerns remain. With the passing of the deadline, the US administration did not make any official announcement on raising the tariffs on Chinese goods.
Meanwhile, President Trump noted that a deal with China was still possible but maintained that tariffs were a good alternative. With the markets still guessing on whether or not a trade deal with China will be reached, we could expect to see some volatility today.
Euro Gains as US Data Comes in Soft
The euro currency posted modest gains on the day, rising 0.20%. The producer price index rose 0.2% on the month in April, missing estimates. The trade deficit for March was at $50.0 billion, slightly higher than the median expectations. Data from the eurozone is sparse with only the regional industrial production figures due later today.
EURUSD Steady at 1.1226 Resistance
The currency pair rallied initially to intraday highs of 1.1250 before pulling back to settle at 1.1226 resistance. Although price action has moved to the upper range of the corridor, a follow-through is required. A daily close above 1.1226 could confirm the upside bias as the euro will then have to break past 1.1246 resistance. There is the scope that the common currency could give up the gains and move back into the range.
Oil Mixed Amid Developing Fundamentals
WTI crude oil was down 0.64% on Thursday. The declines came despite rising tensions surrounding Iran. The Iranian regime announced that it would partially withdraw from the nuclear treaty. The remaining parties, including Germany and the UK, rejected the threats leading to a stalemate.
Will Oil Push Higher?
Crude oil prices have managed to post a modest recovery from Thursday’s declines. Price is currently trading just below the 62.85 level of resistance. Therefore, it is likely that we could see prices testing the resistance level more firmly before reversing course. In the near term, we expect oil to maintain its range within 62.85 resistance and 60.33 support.