Crude oil price steadies as IEA warns on rising uncertainty

The price of crude oil held steady even after the recent failure by OPEC and its allies to reach an agreement. Brent, the global benchmark, rose by 0.55% to $75.60 while the West Texas Intermediate (WTI) rose by 0.60% to $74.57. In a statement, the International Energy Agency (IEA) warned that the industry faces contradictory worries of oversupply and undersupply. The report said that the world will see an oil supply deficit if OPEC+ fails to reach an agreement for August supplies. At the same time, it warned that the new wave of the Delta variant will lead to less demand. Countries like Spain, Australia, and Japan have recently announced measures to curb the spread of the disease. Another concern is that the top oil producers could engage in a market share war, which will, in turn, affect the price.

The US dollar strengthened after the latest US consumer inflation data. According to the Bureau of Labor Statistics (BLS), the headline CPI rose by 0.9% in June after rising by 0.6% in the previous month. This increase led to a year-on-year gain of 5.4%, which was better than the median estimate of 4.9%. At the same time, the core CPI that excludes the volatile food and energy products rose by 4.5% after rising by 3.8% in May. These numbers show that consumer prices are still rising in the US, which will likely put pressure on the Federal Reserve in the coming meeting. The recent minutes showed that some members of the FOMC were starting to think about tapering.

The Australian dollar was little changed after the government announced a new plan to support the economy as it sees more Covid cases. In a statement, the country’s prime minister said that the government will provide more than $400 million to New South Wales as it battles the new wave. The government will also extend the JobKeeper program for people who have lost more than 8 hours or a full day work. The currency also reacted to the latest strong Chinese trade numbers. The data showed that the country’s exports and imports rose by 32.2% and 36.7%, respectively. The total trade surplus rose by more than $6 billion to $51.53 billion.

EUR/USD

The EURUSD pair retreated to an intraday low of 1.1840, which was lower than the intraday high of 1.1882. The price seems to be forming a break and retest pattern after it broke out above the upper side of the descending channel. It has also formed an inverted head and shoulders pattern, which is usually a bullish signal. It is slightly below the 25-day moving average. Therefore, the pair will likely resume the bullish trend as bulls target the next key resistance at 1.1920.

AUD/NZD

The AUDNZD pair rose to a high of 1.0725, which was substantially higher than last week’s low of 1.0660. The thinly traded pair has recently made a bullish breakout above the yellow trendline. It has also moved above the 50% Fibonacci retracement level while the RSI has been on an upward trend. It has also moved between the middle and upper side of the Bollinger Bands pattern. Therefore, the pair will likely keep rising as bulls target the next key resistance at 0.7400.

USD/CHF

The USDCHF tilted upwards after the latest Swiss producer inflation data. On the two-hour chart, the pair has formed a bearish flag pattern that is shown in red. It has also moved below the 25-day moving average while the Relative Strength Index (RSI) has kept rising. It is also slightly above the 38.2% Fibonacci retracement level. Therefore, the pair will likely resume the downward trend later this week.