Equity markets are holding steady as they trade close to the all-time highs. This comes amid a mixed investor sentiment. Gold prices also continue to hold steady. The economic calendar is generally quiet and Powell’s speech did not give much for investors to digest.
Eurozone Industrial Production Data
Industrial production in the Eurozone fell more than forecast in the month of December. Official data from Eurozone showed that industrial production fell 2.1% on the month in December. This follows a flat print in November. The economist’s forecasts were for a 1.7% decline. All aspects of the production fell. The data follows weak manufacturing and industrial figures from Germany.
EURUSD Could be Set for a Correction
Price action in EURUSD indicates a possible correction might be underway. The Stochastics on the 4-hour chart suggests a possible bullish divergence. Price action needs to break past the pivot high of 1.0922 to confirm the upside. The immediate target is at 1.0952, followed by a move back to 1.1000 resistance.
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Weekly Crude Oil Inventory Rises
The weekly crude oil inventory report from the US Energy Information Administration showed a strong build-up. For the week ending February 8th, crude oil inventory rose 7.5 million barrels. This was slightly higher than the API’s report of a 6 million build in inventory. WTI crude oil prices, however, brushed aside the report to post some modest gains.
WTI Crude Oil Looks to be Forming a Bottom
Crude oil prices are likely forming a bottom following a modest rebound. However, the declines are still not out of the woods. Oil prices are trading at 51.65 resistance level. Only a breakout above this level can confirm a corrective move in price. In the short term, WTI crude oil could remain range-bound within the 51.65 and 50.00 regions.
Gold Prices Continue to Consolidate
Gold prices are holding steady amid lack of volatility. Prices are rising modestly after a decline the day before. Economic data remains sparse and investors are picking up cues from the global themes including the Coronavirus and the US monetary policy. Fed Chair Powell gave his second day of testimony to the Congress.
XAUUSD Retesting the Resistance
A day after posting some modest declines, gold is back close to testing the resistance area of 1573 – 1569. With the Stochastics oscillator hinting at a possible move higher, we could see some pickup in momentum. But gold needs to clearly break past the resistance area to confirm further upside. Secondly, it also needs to break past the previous pivot highs to maintain the uptrend.