Market Overview

Oil prices and the Fed's monetary policy were in focus this week. It is getting clearer this week that the Fed would not hike its interest rate in April. Fed officials need more information to be convinced for a vote for an interest rate hike.

This week's U.S. economic was mixed. The consumer price inflation in the U.S. declined in March and is likely to remain low due to low energy prices. Higher oil prices could help to boost inflation.

Oil prices rose this week. Market participants are awaiting the meeting between OPEC and non-OPEC countries, which is scheduled to be in Doha on April 17. Hopes for a deal on the freeze of the oil output at January levels supported oil prices.

But there are doubts that the freeze of the output will be enough to balance the oil market. The International Energy Agency (IEA) said in its monthly report on Thursday that the oil market would balance in the second half of the year. The agency noted that a deal on the freeze of the oil output would have only limited impact on the production.

If a deal is not reached on April 17, oil prices will drop significantly next week.

The Chinese economic data shows this week that China's economy seems to stabilise. China's exports and industrial production rose in March. The stabilisation of the Chinese economy could add to speculation that the Fed could raise its interest rate in June as the central bank noted in its latest minutes that global economic and financial developments posed risks to the U.S. economy.

Market participants are awaiting the release of the European Central Bank's (ECB) interest rate decision. It is unlikely that the central bank will add further stimulus measures, but market participants will closely monitor the ECB President Mario Draghi's speech for hints for further monetary policy easing.

It is likely that the currency pair EURUSD will rise toward the resistance level at about $1.1340 or at about $1.1440, if there are be negative news from the U.S. or there are be negative news from China and there are no negative economic data from the Eurozone.

If the U.S. economic data is better than expected and in case of the negative economic data from the Eurozone, the currency pair EURUSD may test the support level at $1.1200 or $1.1100.