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When traders boosted their long holdings in response to the recent dip, WTI oil regained ground around the $77 mark. The American crude closed Friday’s trading at $76.68 per barrel.
Brent oil’s price increased and got close to $83 per barrel. If the right catalysts manifest, the momentum may still grow while the RSI is still in the moderate area. If the price rises over the $83 level, the resistance at the 50 EMA, which is at $84, will be put to the test.
Key Developments
Among the week’s top performers was the Swiss Franc boosted by risk aversion, lower yields and Swiss inflation data. USD/CHF suffered the worst weekly loss since November. The Australian Dollar was the biggest loser on G10 space affecter after the Reserve Bank of Australia’s dovish rate hike. Next Thursday, Australia will report employment numbers. AUD/USD broke the key 0.6600 support area and plunged to the weakest since November. One of the best of the week was selling AUD/CHF after the RBA meeting.
USD/CAD gained over 200 pips over the week, posting above 1.3800, the second-highest weekly close since May 2020. On Wednesday, the Bank of Canada left rates unchanged (as expected) after eight consecutive hikes and said it will stay on “a conditional pause”. The Canadian economy added 21.8K jobs in February, above the 10K expected.
EUR/USD erased weekly losses rising back toward 1.0650 on Friday. The pair continues to move sideways between 1.0530 and 1.0700. Next Thursday, the European Central Bank is expected to hike interest rates by 50 basis points. Some debate is emerging at the board about its forward guidance.
Economic Data
The US Dollar dropped sharply on Friday after the US employment report. The DXY erased all the gains that followed Federal Reserve Jerome Powell’s hawkish remarks. The US economy added more jobs than forecast in February (311K vs 205K) and confirmed the shocking numbers of January. However, the Unemployment Rate rose to 4.6% and wage growth slowed down. Before NFP, expectations about a 50 basis points rate hike at the next FOMC meeting were elevated and then pulled back, pushing US yields to the downside. Treasury bonds also rose amid risk aversion. The VIX (Fear index) jumped on Friday to 27.42, a level not seen since late October. US stock indices added to losses on Friday, ending the week with a decline of more than 4%.
Germany published inflationary data for the Eurozone (EU) at 8.7% YoY, which was unchanged from the previous month. The Harmonized Index of Consumer Prices (HICP) increased by 9.3% YoY, strengthening the argument for more ECB tightening (ECB).
Also Dead
EUR/USD benefits from NFP, Germany’s high inflation data
BoC’s future rate hikes gets support by latest jobs data
GBP/USD climbs on weaker US dollar post key NFP data
Italy expected to issue new retail bonds before summer
Gold rises following US NFP data
