The EURUSD consolidates below the 1.13 mark on stronger US dollar, as well. The pair’s short-term direction will likely depend on the US dollar appetite. Meanwhile, the final data should confirm a flattening inflation in European consumer prices. The headline CPI is seen at 0.1% y-o-y inflation in May, and the core inflation at 0.8%. The next technical support lies at 1.1160, the major 38.2% Fibonacci retracement which should distinguish between the actual positive trend and a medium-term bearish reversal.
Gold is little changed near the $1725/1730 per oz, as risk averse investors bear the brunt of uncertainty regarding the strength of the latest market recovery. However, the stronger the $1750 offers, the softer the buying interest due to a limited perceived potential to the upside.
WTI crude slipped more than 2% in Asia after the API data showed a second-week buildup in US oil inventories. The US stockpiles rose 3.8 million barrels last week, following a 8.42-million-barrel spike a week earlier. The more official EIA data is due today and should confirm higher oil inventories in the US. With the rising threat on the global recovery in oil demand, buyers may shift to the sidelines and leave the market in the hands of the bears. The price of a barrel will likely ease below $35. If the 200-day moving average support at $34.40 is cleared, the losses could extend toward the $30 mark. Oil producer countries meet today following their latest announcement of a record 9.7-million-barrel cut in daily production until July to drain the global glut. After the lack of full compliance dragged the price of a barrel to -$40 earlier this year, the rules of the game are clear to all member and non-member countries: full compliance or nothing. Therefore, we expect to see an increasingly solid compliance among oil producers to keep the market together until the Covid-19 crisis is behind.
