The euro/dollar has been in a sideways since April Fools’ Day. All of the daily candles are similar to dojis with long shades for these days. The mixed dynamic of the pair yesterday was caused by a rise in oil prices and because of what Fed representative Harker had to say.
Oil was up to $44.78 due to rumours that Russia and Saudi Arabia have reached a consensus as to freezing oil output. There was no confirmation of this from officials. Harker announced that the Fed could raise rates three times this year if inflation speeds up.
The euro/dollar closed at 1.1383 and was treading near the LB in the middle of a 1.1326-1.1464 range in Asia.
On Tuesday the API oil reserve report came out before the daily candle closed. US oil reserves were up 6.2 million against the previous week’s fall of -4.3 million. Brent dropped to $44.11 on this news. It was an insignificant fall in the quotes for the rise in reserves due to market participants’ attention being firmly focussed on the OPEC meeting in Doha. We could say that Brent in Europe is in any case set to test $45 and after which we would see the start of a correction.
The key event of the day is the Bank of Canada’s (BoC) press conference. The hourly indicators are down and aren’t contradicting euro purchases in the first half of the day. The euro is expected to close at around 1.1380.
Day’s News (EET):
12:00, Eurozone changes in industrial production for February;
15:30, US changes in retail trade and PMI for March;
17:00, BoC interest rate decision and monetary policy report;
17:30, US oil reserves from Ministry for Energy;
18:15, BoC press conference;
21:00, US Beige Book.
The euro/dollar has been in a sideways trend with a 1.1394 average for 8 days. A break in the lower limit of the range at 1.1326 will open up the road to 1.1250 for the sellers. We need to prepare ourselves for a weakening of the euro. The 1.1396/1.14 levels will be Wednesday’s resistance. Expect some swings during the American session during the BoC press conference and when the US Ministry for Energy oil report is released.