RISING OIL PRICES AND CENTRAL BANKS CAPTURE THE MARKETS ATTENTION
U.S OIL RISES ON IRAN DEAL
U.S WTI Oil prices moved close to a four-year trading-high this week, as U.S President Donald Trump pulled away from the Iran Nuclear Deal that former U.S President Barack Obama put in place. WTI Oil soared to, $71.88 per barrel, marking the highest trading-level for West Texas Intermediate Oil, since November 2014. The price of WTI Oil rocketed higher as President withdrew from the deal and imposed tougher sanctions on Iran, with WTI Oil retracing to $68 per barrel, prior to President Trump's decision.
WTI Oil is bullish while trading above the $69.30 level, further upside towards $72.00 and $73.70 seems possible.
WTI Oil will turn bearish if it falls below the $69.30 level, key support is then found at the $68.40 and $67.90 levels.
BOE TURN DOVISH
The Bank of England kept UK Interest Rates on hold this week, with MPC members striking a much more dovish tone towards future UK rate hikes and the UK economic outlook. The Bank of England cut back its near-term GDP and Inflation forecasts after much weaker than expected growth in the first fiscal quarter, and noted any future rates hikes would be 'gentle'. The British pound was sold sharply lower following the BOE's decision, with GBPUSD pair tumbling back towards the 1.3500 level, while the EURGBP pair recovered back above the 0.8800 handle.
The GBPUSD pair is strongly bearish while trading below the 1.3606 level, further downside towards 1.3425 and 1.3300 seems possible.
If the GBPUSD pair moves above the 1.3606 level, buyers may test towards the 1.3650 and 1.3710 resistance levels.
The New Zealand dollar moved sharply lower this week, as the Reserve bank of New Zealand kept rates on hold, and struck a much for bearish tone towards the domestic economy. The RBNZ cut its inflation forecast and pushed any interest rate rises to September 2019, from the RBNZ previous forecast of June 2019. After the Reserve Bank's decision, the market reaction saw the NZDUSD pair tumble lower towards the 0.6900 level, while the AUDNZD pair rocketed towards the 1.0800 level.
The NZDUSD pair is strongly bearish while trading below the 0.7055 level, further downside towards 0.6880 and 0.6800 seems possible.
If the NZDUSD pair moves above the 0.7055 level, buyers may test towards the 0.7125 and 0.7200 resistance levels.
U.S INFLATION MUTED
The U.S economy posted slightly softer than expected monthly inflation data points this week, with both CPI and PPI inflation measures coming in weaker than expected. The U.S dollar index started to move lower, as the U.S Producer Price Index expanded just 0.1 percent during the month of April, against expectations of a 0.2 percent increase. The greenback moved lower again, as the U.S Consumer Price Index grew just 0.2 percent in April, which was softer than the 0.3 percent the market had been expecting.
The USDJPY pair is bearish while trading below the 110.00 level, further downside towards 108.65 and 107.80 seems possible.
If the USDJPY pair moves above the 110.00 level, key resistance is found at the 110.40 and 111.00 levels.