USD Mixed On Disappointing ADP Payroll Report

The US dollar was seen posting some modest gains on Thursday. Economic data on the day saw the ISM’s non-manufacturing PMI coming out slightly better than expected at 56.9. The data beat estimates of 55.9. But the ADP’s private payrolls report disappointed. Data showed that private payroll hiring added just 27,000 jobs in May. This was the weakest figure released in the past nine years.

Euro Gives Back Gains Ahead of ECB Meeting

The euro currency was seen erasing the gains from earlier this week as price closed below the 1.1250 handle. The declines come ahead of today’s European Central Bank’s monetary policy meeting. No changes are expected from the ECB, but investors are keen to see if the central bank will announce more details on the TLTRO II program. The recent downtick in inflation could also see the officials taking a cautious approach to forward guidance.

Will EUR/USD Settle Back into the Range?

The currency pair has been trading sideways with the recent gains bringing some life back. However, the close below 1.1250 could potentially trigger further declines depending on how the euro reacts. The short term support is seen at 1.1200. If this support is not strong, the common currency could be seen posting further declines. The lower end of the range at 1.1140 remains the probable downside target.

EURUSD

Oil prices maintain declines as inventories increase

WTI Crude oil prices extended the declines on Thursday, slipping to a fresh 5-month low. The declines came as the EIA’s report for the inventories saw an increase of 6.77 million barrels per day last week. This was higher than the median forecasts of a 2 million decline. The US crude oil inventories have been rising dramatically over the past few weeks adding to the downside pressure on prices.

Will oil continue to trend lower?

Following the breakdown below 52.74, oil prices touched down to a fresh five-month low before pulling back modestly. However, the downside pressure is likely to remain as price could test the 50.00 handle. A test of the psychologically strong 50.00 level for support could indicate the completion in the correction. We expect to see oil prices reversing the declines from this level.

WTI

Gold maintains gains, rising to a 4-month high

Gold prices continued their bullish ascent as price briefly rallied to a four-month high of 1324.19 before easing back. The gains come as investors continue to assess the impact from the trade tensions. The recent dovish comments from the Fed chair also helped to push gold prices higher.

Can gold continue to trend higher?

The current gains are showing signs of exhaustion as gold prices formed a doji close before declining. However, prices remain supported above the 1320 handle. This could mean that any dips in price will test the 1320 price level for support. If the support fails, gold could potentially see further declines in the near term. The next lower support is seen at 1290.

Gold