CRUDE RISES AFTER CIA CONCLUDES SAUDI CROWN PRINCE ORDERED KHASHOGGI KILLING
The price of crude oil jumped by more than 1% today as traders expected Saudi Arabia to continue with its campaign of supply reduction. Last week, Saudi’s oil minister said that his country will reduce supplies by more than 500K barrels in December. After the comment, OPEC released its monthly report that predicted an oversupply and weaker demand in the coming year. Even with today’s upward movement – which was likely driven by the news that Saudi Crown Prince, Mohammed bin Salman, ordered the killing of journalist Khashoggi – prices remained at significant lows. CIA’s conclusion that Mr. Khashoggi was murdered is likely to put more pressure on the Trump administration to sanction the country.
The Japanese yen strengthened against the USD in the Asian session even after the country released weak economic numbers. In October, the country’s exports rose by 8.2%, which was lower than the 9.0% that traders were expecting. This growth was better than September’s slump of minus 1.3%. At the same time, the country’s imports increased by 19.9%, which was better than the consensus estimate of 14.5%. The trade deficit was at ¥449 billion, which was worse than the ¥70 billion traders were expecting. Japan is largely an industrial country that derives most of its income from exports.
The New Zealand dollar declined against the USD in the Asian session today. Data from New Zealand showed that the producer price index (PPI) input rose by 1.4%, which was higher than the 0.8% that traders were expecting. It was also higher than the second quarter’s 1% increase. The PPI input measures the change in the price of goods and raw materials purchased by manufacturers. The PPI output rose by 1.5% in the second quarter, which was higher than the 0.9% that traders were expecting.
The EUR/USD pair was little moved in the Asian session today. This halted the sharp increase that started on Tuesday last week. The pair is now trading at 1.1400, which is slightly lower than Friday’s close of 1.1420. The current price is along the 15-day EMA. It is also above the 30-day EMA on the hourly chart and along the 61.8% Fibonacci Retracement level. The RSI has fallen slightly from 70 to the current 60. The pair could decline slightly in the short-term. These declines will likely create good entry positions.
The NZD/USD pair declined to an intraday low of 0.6845 from Friday’s close of 0.6885. On the 30-minute chart, the pair’s 15-day EMA started a crossover of the 30-day EMA as shown below. The RSI moved from 80, to the current low of 42 while the MACD is currently at the neutral level after falling from a multi-week high. The downward trend is likely to continue in the short term with an upward reversal being possible.
The price of WTI crude oil rose from Friday’s close of 56 to an intraday high of 57.53. This upward trend halted the sharp decline experienced last week. The RSI has moved from around 30 to the current 47 on the four-hour chart. The current price is a continuation of a consolidation that started on Thursday last week. At this point, the pair could continue the previous decline or start a strong upward trend.