USD pauses ahead of the Fed minutes
The price of crude oil continued its steady climb as investors cheered the supply cuts from OPEC and the US sanctions on Iran and Venezuela. Investors also believe that the demand will be steady, even with the slowing global economy. The price of Brent and WTI crude reached a high of $66.5 and $56.8 respectively. The price increase comes at a time when US production has been increasing. Last week, Baker Hughes revealed that US oil rigs had increased by 4.
The Japanese yen was slightly stronger against the USD in the Asian session. This happened after Japan released important trade data. In January, imports contracted by -0.6%. This was better than the expected contraction of -2.8%. In the same month, exports contracted by -8.4%, which was worse than the consensus estimate of -5.5%. In December, exports decreased by 3.9%. The trade deficit increased to 1,415 billion yen. This deficit will likely change after a few years. This is because many Japanese companies in the EU will likely move back there after the two signed a free trade deal. Already, Honda has announced that it will move from the UK to Japan.
Traders today will focus on the upcoming round of trade negotiations between the US and China. These talks will begin tomorrow in Washington. They will be the final talks before the March 1 deadline. Yesterday, Donald Trump said that he will be flexible on the deadline. They will also focus on the Federal Reserve minutes, which will be released later today. These minutes will help shed light on what the Fed’s thinking.
On Friday, the EUR/USD pair reached a low of 1.1233. In the past two days, the pair has moved up and yesterday, it reached a high of 1.1356. It is now trading at 1.1345, which is along the 38.2% Fibonacci Retracement level. The price is also above the 42-day and 21-day exponential moving average while the RSI is slightly below the overbought level of 70. While the pair could move lower, the upwards trend could continue in the medium term.
The price of WTI crude oil reached a low of $42 in December. Since then, the pair has been making higher highs and higher lows and today, it reached a high of $56.50. This was the highest level since November last year. On the daily chart, this level is also along the 38.2% Fibonacci Retracement level. On the daily chart, this price is above all the medium, short, and long-term exponential moving averages. The momentum indicator remains above the 100 level. There is a likelihood that the price will continue moving upwards, with the next resistance level being $60, which is also the 50% Fibonacci level.
The USD/JPY pair moved slightly higher today after the Japanese trade deficit rose faster than expected. The pair remains within a narrow range. It is now trading at 110.82, which is slightly higher than the 42-day and 21-day EMAs. The TSI has remained between the 30 and 70 levels, which is a sign of consolidation. The pair could make some major moves in either direction in the medium-term.