• A modest USD recovery move prompts some profit-taking on Thursday.
• Risk-off mood/upbeat US data remained supportive of the USD rebound.

The EUR/USD pair extended its steady intraday decline and retreated further below the 1.1400 handle, eroding a part of the previous session's strong gains.

The pair failed to capitalize on the post-FOMC upswing to six week tops (mid-1.1400s) and witnessed some profit-taking on Thursday, snapping four consecutive days of winning streak amid a modest US Dollar rebound.

It is worth reporting that the key USD Index plunged to its lowest level since early February on Wednesday after the Fed indicated there will be no more rate hikes in 2019 and also downgraded its economic outlook.

However, a global wave of risk-aversion trade, amid renewed concerns over a disorderly Brexit and US-China trade disputes, seemed to underpin the greenback's relative safe-haven status against its European counterpart.

The USD rebound remained supported today's stronger than expected Philly Fed manufacturing index and a larger than anticipated drop in the initial US weekly jobless claims data, albeit failed to provide any fresh impetus.

It would now be interesting to see if the pair is able to find any fresh buying interest at lower levels or the current pull-back marks the end of recent bullish trajectory as the focus now shifts to Friday's flash Euro-zone PMI prints.

Technical levels to watch

"The index for current manufacturing activity in the region increased from a reading of -4.1 in February to 13.7 this month," the Federal Reserve Bank of Philadelphia reported in its March 2019 Manufacturing Business Outlook Survey.

Key takeaways from the press release

  • The current new orders index improved modestly, increasing from -2.4 in February to 1.9 in March.
  • The current shipments index increased 25 points to 20.0.
  • The current employment index, however, decreased from a reading of 14.5 in February to 9.6 this month.
  • The prices paid index decreased 2 points to 19.7. The prices paid index declined for the eighth consecutive month and is at its lowest reading since July 2017.

"In the week ending March 16, the advance figure for seasonally adjusted initial claims was 221,000, a decrease of 9,000 from the previous week's revised level," the U.S. Department of Labor announced on Thursday.

Key takeaways from the press release

  • The 4-week moving average was 225,000, an increase of 1,000 from the previous week's revised average.
  • The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending March 9.
  • The advance number for seasonally adjusted insured unemployment during the week ending March 9 was 1,750,000, a decrease of 27,000 from the previous week's revised level.
  • Prices of the WTI are correcting lower around $59.50.
  • US crude oil supplies dropped more than expected yesterday.
  • US-China trade dispute back to the fore.

After briefly testing the psychological $60.00 mark per barrel, prices of the WTI are now giving away some gains and returning to the $59.50 region.

WTI looks to trade, data

Prices of the barrel of the West Texas Intermediate are navigating the lower bound of the daily range, easing some ground for the first time after three consecutive daily advances and coming down after testing levels just above the $60.00 mark, area last visited in mid-November 2018.

WTI is coming under some selling pressure after the Federal Reserve highlighted the likeliness of a slowdown in the economy at its meeting on Wednesday.

However, the persistent selling bias hitting the greenback plus another drop of US crude supplies as reported by the EIA on Wednesday and the ongoing OPEC+ output cut deal continue to sustain the underlying bullish view in the commodity.

Later on Friday, Baker Hughes will publish its weekly report on US drilling activity.

What to look for around WTI

Crude oil has managed to retake the critical $60.00 mark per barrel albeit for a few moments earlier today following the continuation of the negative mood around buck and a generalized better tone in the risk-associated complex. The bullish view in crude oil remains well in place, in the meantime, on the back of the so-called ‘Saudi put’, tight conditions in the US markets (amidst US net imports in historic low levels and the rising activity in refiners ahead of the summer session), the current OPEC+ agreement to cut oil output and ongoing US sanctions against Iranian and Venezuelan crude oil exports. Furthermore, the OPEC+ could announce an extension of the ongoing agreement to curb oil production at the cartel’s meeting in June.

WTI significant levels

At the moment the barrel of WTI is losing 0.27% at $59.51 and a breakout of $60.03 (2019 high Mar.21) would open the door for $61.84 (200-day SMA) and then $63.74 (61.8% Fibo of the October-December drop). On the downside, the next support emerges at $58.17 (10-day SMA) seconded by $57.12 (21-day SMA) and finally $54.37 (low Mar.8).

Britain's opposition Labour Party leader – Jeremy Corbyn cross the wires in the last hour saying that we are considering what proposals to put before the parliament next week and revoking Article 50 is hypothetical.

Additional quotes:

• Believe we can get a majority for a Brexit deal.
• Do not believe PM May's deal is the way forward.