The price of crude oil declined today as the International Energy Agency (IEA) cautioned OPEC and its allies of a major challenge in 2020. This is because the France-based agency expects demand to decline significantly. This is because their rivals like the United States are expected to continue boosting production in the coming year. This statement came ahead of the important OPEC meeting, which will be held in December. OPEC+ members agreed to slash production in 2018 but some member countries have not been compliant. The IEA expects that oil production will be 30.2 million barrels per day in the current quarter. This is higher than the 28.2 million barrels that are needed.
The euro rose today after Europe released important inflation and trade data. Data from Eurostat showed that headline CPI remained unchanged at 0.7%. The number declined from 0.2% to 0.1% on a MoM basis. The core CPI remained unchanged at 1.1% on a YoY basis. It remained unchanged at 0.1% on a MoM basis. CPI ex-tobacco declined from 0.8% to 0.6%. These numbers show that the European economy is still struggling to hit the 2.0% target inflation level even after this year’s rate cut.
The US dollar declined slightly after the market reacted to the testimony given by the Federal Reserve Chair. Jerome Powell was testifying in congress on Wednesday and Thursday. In his statements, he reiterated that the Fed will likely leave rates unchanged going forward. The bank has already made three cuts this year. Yesterday, the market received inflation data from the US. Producer prices rose by 0.4% in October but declined to 1.1% in the last 12 months. This was the slowest rate of annual growth since 2016. The market received retail sales data today. Headline retail sales rose by 0.3% to $526.5 billion after declining by -0.3% in the previous month. Sales rose by 3.8% on an annualized basis. The core retail sales rose by 2.4%. Meanwhile, the New York empire state manufacturing index declined from 4.0 to 2.90.
The EUR/USD pair rose to a high of 1.1035. This price is along the 23.6% Fibonacci Retracement level on the hourly chart. The RSI has been on an upward trend while the price is trading below the 14-day and 28-day moving averages. The pair appears to be on an upward trend, that will likely see it test the 38.2% Fibonacci Retracement level at 1.1060.
The XBR/USD pair declined today after the IEA warning on demand. The pair reached a low of 61, which was lower than this week’s high of 62.60. The pair is between the 50% and 61.8% Fibonacci Retracement level. It is also along the lower line of the Bollinger Bands while the RSI is about to hit the oversold level of 30. The pair may continue trading within the current channel as the market waits on more indications from OPEC.
The AUD/USD pair declined to a low of 0.6786 as the market continued to react to the weaker Chinese data released yesterday. Today’s lowest level was along the 38.2% Fibonacci Retracement level. The pair is trading at 0.6798, which is along the 50% Fibonacci level on the four-hour chart. The price is below the 14-day and 28-day moving averages and below the Ichimoku cloud. The pair may resume the downward trend as the market waits for RBA minutes, which will be released next week.
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