The Fed's and the Bank of Japan's (BoJ) interest rate decisions were in focus this week. Both central banks kept its interest rates unchanged. Especially, the BoJ's decision led to a turmoil in the markets as market participants speculated that the central bank could add further stimulus measures.
The Fed noted that the U.S. economic activity slowed. That could mean that the Fed would delay its further interest rate hike. The U.S. gross domestic product (GDP) for the first quarter and personal spending data for March support such speculation.
Oil prices rose on hopes the oil market would rebalance this week. But it is likely that oil prices will show some correction. According to a Reuters survey, the Organization of the Petroleum Exporting Countries' (OPEC) oil production rose in April due to an increase in supply from Iran and Iraq. That could weigh on oil prices.
Market participants are awaiting the release of the U.S. labour market data next Friday. The weaker-than-expected labour data could add to speculation the Fed would delay its interest rate hikes.
It is likely that the currency pair EURUSD will rise toward the high of October 15, 2015 at $1.1495 or toward the psychological level at $1.1600, if there are be negative news from the U.S. 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 $1.1300 or $1.1200.
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