MARKETS WOBBLE AS US ELECTION RESULTS STREAM IN
Markets were volatile during the Asian session as results from the US Midterm elections streamed in. As it stands, Republicans hold the Senate majority while the Democrats have redeemed control of the House of Representatives. The outcome is likely to challenge the Trump administration in many areas including military spending and foreign business dealings.
The price of crude oil was little changed after API released its weekly data of inventories. The data showed that the inventories rose to 7.83 million barrels. This was higher than last week’s numbers that showed the inventories at more than 5.7 million barrels. In the previous week, the organization data showed a sharp drawdown in the stocks. The EIA is expected to release the official inventories today. Traders expect the data to show the inventories at 2.43 million barrels, which will be lower than the previously released 3.2 million barrels.
The New Zealand dollar rose sharply against the USD after positive employment numbers from New Zealand. In the third quarter, the unemployment rate declined to 3.9%. This was a sharp decrease from the previous 4.5% and the expected 4.4%. In the quarter, the participation rate jumped to 71.1%, which was higher than the consensus estimate of 70.9% while the employment change in the quarter rose by 1.1%. These numbers are positive for the New Zealand economy and an indicator that the RBNZ will likely start thinking about tightening. Later today, traders will get a reaction from the bank when it releases its monetary policy statement.
The EUR/USD had a volatile Asian session with the pair fluctuating between the 1.1472 and 1.1395 level. This is as the results from the US elections started to stream in. With no major economic data expected today from Europe and the US, the pair’s movements will be dictated by reactions to the Midterms. The pair is now trading at 1.1445, which is slightly higher than today’s low. The ADX indicator is currently at 26, an indicator that the current upward movement will not last.
The Kiwi rose sharply against the USD after the impressive quarterly jobs numbers. The NZD/USD pair reached an intraday high of 0.6768, which was the highest level since early August. Today’s upward movement continued a momentum started in October when the pair reached a low of 0.6423. The double EMA of 15 and 30 days made a crossover on the daily chart indicating that the upward trend will continue. This is confirmed by the ADX indicator and the Money Flow Index. Further upward trends will see the pair test the important resistance of 0.6800.
The price of WTI crude oil remained at extremely low levels after the API released the inventories numbers. The XTI/USD pair is trading at 61.98, which is near the lowest level since March this year. The pair’s moving averages show that it will likely continue moving lower. The ADX is at 31, a signal that it will continue the trend. However, with the RSI trading at the oversold level, there is a likelihood that the pair could start moving up as well. Today’s movements will depend on the official inventories numbers from the EIA.