Investors remain cautious as the risk of a no-deal Brexit puts focus back on the UK. This comes amid a lack of any new reports on the US-China trade deal.
Economic data also remains sparse for the USD. There were some speeches from Fed members, but investors did not seem too keen.
Trading volumes are expected to slow as the holiday season nears.
Euro Slips Despite Annual Inflation Holding Steady
The euro gave back the gains from earlier in the week. Economic data shed light on the annual inflation report.
Consumer prices in the eurozone rose by 1.0% on the headline for the year ending November 2019. This was in line with the flash forecasts.
Core CPI was also within estimates, rising 1.3% annually.
EURUSD Could Rebound in the Near Term
The currency pair fell past the 1.1131 level. The current pace of declines will see the common currency testing the lower price level at 1.1100.
It is quite likely that the currency pair will rebound off this level. The Stochastics oscillator is looking to move out from the oversold levels. But in the short term, the EURUSD will remain range-bound within 1.1177 and 1.1072.
Sterling Continues its Descent
The pound sterling was seen adding another session of declines. The slump in the currency comes as investors price in the risk of a no-deal Brexit.
This comes due to the plans of the UK to leave the EU by end of next year, regardless of a deal with the EU. Economic data remains on the background with focus turning back to Brexit, after PM Johnson scored a majority win in the parliamentary elections.
Will the GBPUSD Fall Further?
The currency pair is currently trading near the lower support area of 1.3100. We expect some consolidation to take place at this level. The Stochastics is well oversold, indicating that the momentum will slow.
However, we expect that GBPUSD will now likely stay range-bound within 1.3100 and 1.2960.
Crude Oil Gains on EIA Report
Crude oil prices reversed the declines from Tuesday following the weekly inventory report. Oil prices initially fell after the API data saw a surprise build up in inventory.
However, the Energy Information Administration data showed that there was a draw of 1.1. million barrels for the week ending December 13.
WTI Likely to Retreat Off Current Highs
The bullish fundamentals have kept crude oil on track to test the resistance level of 61.00. But following this attempt, price action could see a retracement.
The recently breached resistance level of 58.65 is to become the likely candidate for a test of support. Establishing support here could strengthen the potential for further gains beyond the 61.00 level.