Greenback remains calm ahead of FOMC and NFP
The price of crude oil remained under pressure after Donald Trump continued his pressure campaign on Saudi Arabia and other OPEC members. The president has been concerned because he believes the rising oil prices will hinder the US economy. On Friday, he said that he had talked with OPEC, which had agreed to boost production. However, this statement was rejected by OPEC’s secretary general. Ironically, Trump’s policies on Iran and Venezuela have been blamed for rising oil prices. Additionally, the US has become the biggest oil producer, which means that the impacts of higher oil prices will be mitigated.
The euro was relatively unchanged after mixed economic data and the Spanish election in which a socialist defeated a right-wing candidate. On economic data, in April, the services sentiment remained unchanged at 11.5. This was slightly higher than the expected 11.1. The industrial sentiment declined by -4.1, which was lower than the expected decline of -2.0. The consumer inflation expectation declined to 15.7 from the previous 17. The business climate of 0.42 was lower than the expected 0.49 while the business and consumer survey of 104 was lower than the expected 105.
The US dollar index was relatively unchanged ahead of the FOMC decision, which is expected on Wednesday. In the meeting, the Fed is expected to leave rates unchanged. Traders will want to know whether the recent strength of the US economy will lead to a change of tone by the Fed. This is because in the first quarter, the economy expanded by 3.2%, which was better than what the Fed was expecting. This increase came despite the longest government shutdown in history that happened in the quarter. In the US, data showed that personal spending rose by 0.9% in February. This was higher than the expected increase of 0.2%. On the other hand, the core PCE price index of February rose by an annualized rate of 1.6%, which was lower than the expected 1.7%. Personal income rose by 0.1%, lower than the expected 0.4%.
The XTI/USD pair moved up slightly to a high of 63.15. This was higher than the intraday low of 62.25. On the four-hour chart, this price is slightly above the lower line of the Bollinger Bands. It is also below the 25-day moving average and is along the important support shown below. The Relative Strength Index (RSI) has moved from the oversold level of below 30 to the current 35. In the near term, the pair will likely continue moving higher because the fundamentals have not changed significantly.
On Friday, the EUR/USD pair reached a low of 1.1110. Today, the pair moved up slightly and reached a high of 1.1173. On the four-hour chart, the price is close to the 1.1200 level, which is also close to the 23.6% Fibonacci Retracement level. The price is also close to the 25-day moving averages and below the 50-day EMA. There is a likelihood that the price will continue moving higher, to test the important resistance level of 1.1200.
The USD/CHF pair started an upward trend on March 21. Since then, the pair has moved from a low of 0.9895 to a high of 1.0237. Today, the pair was relatively unchanged and is trading at 1.0200. On the four-hour chart, this price is slightly above the 25-day and 50-day moving averages, while the RSI has been moving downwards. Volumes have been relatively weak. There is a likelihood that the pair will remain along these levels ahead of the FOMC decision.