Forex News May 18, 2022
ECB
Pablo Hernandez de Cos, an ECB policymaker, made the following remarks:
?A gradual withdrawal of stimulus is adequate in the current context
Further rate increases could be made in the coming quarters
This could reach levels in line with the natural rate of interest if the medium-term inflation outlook remains around our target
That is consistent with recent comments regarding a rate hike in July. That is a foregone conclusion now, but the hawks are hyping a move to positive territory.
There is no doubt that the ECB could go all out in the fight against inflation, but the eurozone economy will face significant challenges in the coming quarters.
Oil
Oil remains on the lookout for an upside break
Oil has remained more resilient despite the recent volatility
Oil is up more than 1% on the day as it attempts to test the $115 mark again this week.
The Monday break higher saw a technical push above trendline resistance from late March to early May highs, but we are now encountering some resistance around the $115 region.
The technicals are also in agreement with a potential breakout from the wedge above, though it must clear the region of $115.37 to $116.61 to truly establish the next leg higher.