FX.co ★ 14.05.2024: Where to invest amid USD depreciation? Outlook for EUR/USD and oil

Investors are looking forward to the publication of inflation figures in the United States. The report is slated for release on Wednesday. Traders are likely to develop their long-term strategies based on the document.

On the trading chart, we see that the US dollar remains stable. The US dollar index, which measures the greenback against the basket of six major currencies, is still trading near 105.30 points. Where will the price go next?

Although yesterday’s rise in the euro was insignificant, it attracted traders’ attention. In general, the market situation remained the same. The greenback’s weakness against the euro could be explained by the fact that investors continue to revise their expectations concerning the future actions of the main central banks.

There is no surprise that the Federal Reserve plays a key role in this situation. Notably, investors’ sentiment may change today. The fact is that the US is going to disclose its producer price index data. According to the forecast, the growth pace will accelerate to 2.2% from 2.1%. This, in turn, points to the possibility of further inflation growth. In this light, the regulator could be very cautious in its decisions about the key rate cut. Curiously, these are factors of minor importance, and they will have an insignificant influence on the market situation.

It seems that the market will just return to the levels recorded early yesterday.

Meanwhile, oil increased by $1 after a 2-dollar drop recorded earlier. This could be partially explained by a local rebound. However, the main reason is the ongoing depreciation of the US dollar. Judging by the weekly price change, we see that the formation of a downward cycle has become slower. This is confirmed by the failure to reach new local lows and a sideways movement. Although the asset is oversold, the correctional movement has not formed yet, thus pointing to the bearish sentiment among traders. Thus, the current stagnation could be considered an accumulation process ahead of possible speculative changes in prices. In the near future, we may see sharp movements.

By the way, today, the US will issue one more report on oil reserves, which may show one more rise. This fact was the main driver of oil prices. In other words, oil may resume losing value.