US equity markets managed to rebound from Tuesday’s sell-off after President Trump tweeted that a deal with China was closer.
The rebound comes after equity markets fell on the news about the US House of Representatives opening a formal investigation against the President.
Economic data continues to remain sparse amid a quiet week.
Euro Slips on a Stronger Dollar
The euro fell to a two-week low on Wednesday. This came after the US new home sales report came out stronger than expected.
Purchase of newly built homes rose 7.1% on a seasonally adjusted basis in August from the month before. The euro weakened amid recent reports showing that the slowdown in Germany could be longer than expected.
Can the EURUSD Rebound Off the Support?
The currency pair is approaching the support level of 1.0944 – 1.0925. The support level is likely to hold in the near term. This comes as the support area has managed to hold the declines on three previous occasions. In the short term, unless the common currency rebounds to the upside, there is potential for the EURUSD to consolidate near the current levels.
Oil Prices Slide on Inventory Report
WTI Crude oil prices were pressured to the downside. The weekly inventory report from the Energy Information Administration (EIA) showed a larger than expected build-up.
For the week ending September 20, US crude oil inventories rose by 2.4 million. This compares to the 1.1 million build-up the week before.
WTI Likely to Extend Declines Further
Following the breakout from the support level of 57.50, price continued to slip. The unfilled gap from earlier this month will be potentially filled in the near term.
The next lower support is seen at the 54.42 region. If oil prices stall near this support, there is a possibility for them to rebound to the upside. But the gains will be likely to be limited below 57.50.
UK Parliament Convenes as Supreme Court Dismisses Suspension
The British Prime Minister was back in the UK following the Supreme court’s decision deeming the dismissal of the parliament as unlawful.
The UK’s attorney general said that lawmakers will try to get a vote on holding early elections. Meanwhile, the October 31st deadline for Brexit remains with the EU not giving the UK any concessions.
GBPUSD Slips to Support
The GBPUSD currency pair completes the downside correction. Price action fell to support level of 1.2370 after the downside breakout from the ascending wedge pattern. However, if the bearish momentum continues, there is scope for further declines. The next lower support is seen at 1.2082.