Crude price drops after strong inventory data
The Australian dollar declined after the country released employment data. In May, the unemployment rate remained unchanged from the previous month at 5.2%. This was higher than the expected 5.1%. During the month, the employment change rose by 42.3K, which was better than the expected 16K while the participation rate rose to 66%. These numbers come a week after the RBA lowered interest rates for the first time in many years.
The Swiss franc was relatively unmoved in the Asian session ahead of an important decision by the Swiss National Bank. The bank is expected to leave interest rates unchanged at minus 0.75%. Some investors expect the bank to point to a further interest rates cut by the end of the year. In recent days, the Swiss economy has softened a bit because of weak external demand. The Swiss franc too has strengthened, which goes against the desire of the central bank.
The price of crude oil declined after data from EIA confirmed that there was an oversupply issue in the United States. In the past week, crude inventories rose by 2.2 million barrels, which was higher than the expected drawdown of more than 481k barrels. In the previous week, the inventories had risen by 6.77 million barrels. Earlier on, data from API showed that inventories rose by more than 2 million barrels.
The EUR/USD pair declined even after weak inflation numbers from the United States. The pair declined from a high of 1.1343 to a low of 1.1280. It is now trading slightly higher at the 1.1290 level. On the hourly chart below, the RSI has emerged from the oversold level of below 30. The price is slightly lower than the 25-day and 14-day moving averages. It is also between the 100% and 61.8% Fibonacci Retracement level. The pair will likely remain along this channel as traders receive the German CPI and US initial jobless claims data.
The USD/CHF pair was relatively unmoved ahead of the important decision by the Swiss National Bank (SNB). The pair is trading at the 0.9947 level, which is along the 38.2% Fibonacci Retracement level and along the middle line of the Bollinger Bands. The demarker indicator has moved sharply lower while the stochastic indicator has moved lower. The pair will likely move sharply in either direction after the SNB decision.
The XBR/USD pair declined sharply after the inventory data was released. The pair reached a low of 59, which is along an important support level. At this point, the pair has completed forming the double bottom pattern, which is an indication that it might start having a strong upward trend. The RSI remains along the oversold level. There is a likelihood that the pair will move higher after forming the double bottom.