The price of crude oil rose in overnight trading as the market reacted to the US inventories data from the American Petroleum Institute (API). The data showed that inventories declined by more than 9 million barrels. That was a surprise because analysts were expecting the data to show that inventories rose by more than 2 million barrels. The data came a day after the International Energy Institute (API) reduced its oil demand forecast for the year by more than 8 million barrels. OPEC also reduced the forecast on Monday. Later today, we will receive the official inventories data by the Energy Information Administration.
The US dollar is down for the fourth day as traders wait for the upcoming Fed interest rate decision. This week’s meeting comes at a time when data from the US has been relatively strong. Early this month, data showed that manufacturing and services PMIs remained above 50.0 in August. In the same month, the unemployment rate declined to 8.4% while inflation rose slightly. Therefore, analysts don’t expect the Federal Open Market Committee (FOMC) to change the current policy. Indeed, most economists polled by CNBC said that they expect the bank will leave rates unchanged until 2023.
The Japanese yen strengthened against the dollar as traders reacted to relatively strong economic data from Japan. The data showed that the country’s exports fell by 14.8% in August, which was an improvement from the previous decline of 19.2%. In the same months, imports declined by more than 20.8% after falling by more than 22% in July. That led to a trade surplus of more than 248 billion yen. We will receive inflation data from the UK and Canada today.
The USD/JPY pair declined to an intraday low of 105.288 after relatively strong data from Japan. That was the lowest it has been since August 31. On the four-hour chart, the price is below the 50-day and 25-day exponential moving averages. It is also below the descending trendline that connects the highest points on August 28 and September 11. The price is also slightly above the important support at 105.00. Therefore, the price is likely to continue falling as bears attempt to move below 105.
The EUR/USD pair found strong resistance after hitting the important level of 1.1900 yesterday. It is trading at 1.1848, which is along the lower side of the ascending white trendline. The price is also along the 50-day and 25-day exponential moving averages while the Average True Range (ATR) has been falling. The pair is likely to continue consolidating ahead of the Fed decision later today.
The GBP/USD pair rose to the current level of 1.2905. On the four-hour chart, this price is slightly above Friday’s low of 1.2954. It is also below the 50-day and 100-day exponential moving averages while the RSI has moved from the oversold level of 21 to the current 51. The signal and main line of the MACD have also made a bullish crossover. That means that the price is likely to continue rising as bulls aim for the next resistance at 1.300.
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