USD Rebounds As Jobless Claims Hit Fresh Lows

The weekly jobless claims for the week ending April 5^th touched a new low. Official data showed that the initial jobless claims fell to 196,000 beating estimates of 210,000.

This was a new low in the weekly jobless claims report in the past 49 years. Producer prices index rose 2.2% on the year ending March, helping to support the greenback to reverse Wednesday’s losses.

Euro Holds Ground Despite a Stronger Dollar

The common currency managed to hold up against a stronger greenback on Thursday. While prices initially slipped, the euro quickly reversed the losses. The final inflation report for March from Germany and France showed that consumer prices rose 0.4% and 0.8% respectively, matching the initial flash estimates.

Can the EURUSD Maintain the Upside?

The currency pair initially fell on Thursday but stopped short of retesting the previously tested support area. A quick reversal saw price action breaking past the resistance area of 1.1276. At the time of writing, EURUSD is extending gains higher and we expect the momentum to see price action targeting 1.1330 in the near term.

Gold Slips as Fed Shifts from Dovish Language

Gold prices fell 1.2% on the day on Thursday as it erased the previous three days’ gains in a single session. It has been trading weaker since early Thursday morning after the Fed minutes released the day before saw some mixed signals. This was accentuated by comments from Fed Vice Chairman Richard Clarida who said the US economy was in a good spot despite muted inflation.

Has XAUUSD Reversed Direction?

The declines in the precious metal saw price breaking out to the downside from the resistance area. The sharp declines will likely push gold prices lower to test the 1285 support area in the near term. However, price needs to post a decline below this level in order to confirm the downside.

Oil Slips Amid Mixed Fundamentals

Crude oil prices were down 1.6% on the day on Thursday. The Energy Information Administration reported that demand for oil would be hit due to slowing global demand. This comes just days after the IMF cut global growth forecasts including key economies such as the US and the eurozone. OPEC is now mulling over raising production if Venezuela and Iran’s supplies fall further.

How Far Can Oil Prices Correct?

WTI Crude oil has clearly pulled back from the highs and formed a minor support level at 64.09 – 63.91 region. In the near term, oil prices could briefly retest this level. If resistance forms here, then we expect price to correct lower. The near term support is at 63.18. Price needs to rebound off this level in order to maintain the bullish momentum. There is scope for further upside. But a failure to stall the correction at 63.18 could trigger an even stronger decline to 62.06.