The EURUSD recovered from Tuesday's low of 1.2867 as buyers took advantage of recent declines and short sellers covered their sell positions buying back the pair. The breach above 1.2900 accelerated the gains of the pair reaching highs of 1.2957. As discussed in yesterday's analysis this was the high of the week and served as a resistance or barrier to further gains. The pair has since declined and now trades at 1.2925.
Yesterday poor French Trade Balance data posting at negative 5.5 billion coincided with the lows in the EURUSD. Earlier this morning French Industrial Production exceeded expectations and conveyed a positive indication for the common currency's second largest economy.
Following EURUSD's recent continual slide and the amount of interest around the 1.30 level there is a heightened likelihood that we could witnesses larger than average moves and volatility in either direction.
The pair remains in a downtrend and below the downtrend channel, as seen in the H2 chart below. Support areas include 1.2867, 1.2800, 1.2745 followed by a key support at 1.2550. Resistance levels above are at 1.2959, 1.30 figure level, followed by 1.3165.
The GBPUSD bounced off the 1.6050 level and more generally the 1.60 level around which there will be a cluster of buy and sell orders. The pair advanced to 1.6150 and has since eased off slightly, now trading at 1.6135.
The ongoing uncertainty as to Scotland's future in the UK will likely dominate headlines, and the pair is certainly worth keeping an eye on if you have an interest in the British pound or trade it.
Yesterday the UK released figures showing that the UK is running a negative Trade Balance to the tune of -10.2B a month last month. Later this afternoon we will have the Inflation Report Hearing in the UK to discuss inflation expectations and forecasts. GBPUSD support areas include 1.6050, 1.6000, 1.5900, and 1.5850. Resistance levels and upside targets at 1.6200, 1.6250 and 1.6365.
Crude Oil rose sharply to reach as high as $93.95 since recovering from the weekly low of $91.80 set on Monday. This amounts to an appreciation in the price of Crude of just above 2% over the last two days. The price has since consolidated lower and is now trading at $92.67 a barrel. The price of Crude Oil is subject to many factors. For example the Euro area economy is the largest economy in the world and is currently showing no growth. The latest GDP data printed at 0.0%. On the other hand the US economy, which is the second largest economy after the common currency bloc, has begun to show greater signs of expansion. Add to this the geopolitical upheavals and crises taking place across the world now and it is hard to decipher which direction this pair will take. Increased volatility leads to greater opportunity and greater risk.
Crude Oil Inventories are to be released later this afternoon and are expected to show a 1.5m barrel decline in stockpiles, improving the outlook for Crude Oil supply demand dynamics .The next line of support is at $92.00 per barrel followed by the $91.00 and the key $90 a barrel support level. On the upside resistance levels are to be found at $93.50, $94.00 and $95 a barrel.