The US dollar was seen holding on to its gains, marking a seven-week high. However, with price closing flat on Wednesday, we could expect to see some downside in the near term. Flash manufacturing PMI from Markit showed the index falling to 50.0. The data underlined weakness in the manufacturing sector. A drop below 50 would indicate a contraction in the sector.
EURUSD Subdued Ahead of Key Policy Meeting
EURUSD was seen holding on to the support area of 1.1140. With the ECB due to meet later today, the currency pair could remain in a consolidating phase for the short term. Depending on the outcome of the ECB meeting, the euro currency could react in either direction.
Will the EURUSD Hold the Support?
The common currency is expected to remain trading near the 1.1140 level in the near term. The bias remains to the downside. The next lower target is seen at 1.1100. However, there is scope for price to pullback modestly higher. The resistance area of 1.1188 will be tested in the near term. A breakout above this level could see further gains in the near term.
WTI Crude Oil Ignores EIA Inventory Draw
Crude oil prices were a bit volatile on Wednesday. The Energy Information Administration’s weekly crude oil inventory report showed a drawdown of 10.8 million bpd. This was larger than forecasts. Yet, oil prices ignored the report as they closed in the red by Wednesday.
Oil Likely to Extend Declines to 54.42 Support
The reversal in oil prices met with the resistance area of 57.50. As a result, oil prices failed to breakout higher above this level. The declines we see could eventually settle near the minor support that is at 54.42 level. As long as this support holds, oil prices could remain caught within the range.
Gold Prices Consolidate Ahead of ECB’s Meeting
The precious metal is trading within the range from the past few days. This comes as the European Central Bank is due to meet later today. The markets are expecting the ECB to announce plans to restart QE and potentially even cut interest rates lower. The dovish forward guidance could influence gold prices in the short term, to the upside.
Will XAUUSD Breakout from the Resistance?
Gold prices have been trading rather flat just below the resistance area of 1431–1428 level. This sideways range could remain in place in the short term. The bias remains mixed at the moment, however. Gold prices could see an upside breakout if it manages to close convincingly above the resistance area. Alternately, we expect the lower support at 1404 to hold the declines for now.