Crude oil price drops as US inventories soar
The USD index was little moved after data showed some economic improvements. The third quarter GDP was revised up to 2.1% from the previous 2.0%. This was better than the consensus estimates of 1.9%. The initial jobless claims declined by 213k while the continuing claims declined to 1.640k. Durable goods orders rose by 0.6% after declining by -1.4%. Meanwhile, personal income remained unchanged at 0.3% while pending home sales declined by -1.7% after rising by 1.4% in the previous month. These numbers came at a time when there is optimism that a trade deal between the United States and China may be reached.
The price of crude oil declined in overnight trading after data from the EIA showed that inventories rose in the past week. Inventories rose by 1.572 million barrels in the past week. This was a bigger number than last week’s 1.379 million. It was also higher than the consensus estimates of a decline of 418k. Weekly distillates increased by 725k while gasoline inventories increased by 5.13 million. The price of crude oil has been a bit volatile as the markets continue to wait for more information on trade. Also, the market has continued worrying about increased supplies in the coming year.
The market will be focused in Europe today. There will likely be lower volume from the United States where the market will close early. The market will receive GDP data from Switzerland. The market expects the economy to have grown by 0.8% in the third quarter, up from 0.2% in the second quarter. The economy is expected to have weakened slightly from 0.3% to 0.2%. In the United Kingdom, the market will receive the house price index data. HPI is expected to have declined from 0.4% to 0.2%. Meanwhile, in Sweden, the market will receive retail sales data. These numbers are expected to go up from 2.6% to 3.1%. Later on, the market will receive survey data from the European Union and CPI data from Germany.
The EUR/USD pair was relatively unchanged during the Asian session. The pair is trading at 1.1004, which is a few pips higher than yesterday’s low of 1.0991. This price is along the 14-day and 28-day moving averages. The price is also important because the pair has managed to complete the inverted cup and handle pattern. The RSI has remained unchanged at 46. The pair may continue to consolidate along the current levels as we start the final month of the year.
The GBP/USD pair rose sharply to a high of 1.2950. This was the highest level since November 21. This price is along the 61.8% Fibonacci retracement level. The price is also slightly above the 14-day and 28-day moving averages. The RSI has moved slightly lower from a high of 71 to the current 62. The dots of the Parabolic SAR are below the current price. The pair may retest the 50% Fibonacci Retracement level at 1.2900.
The AUD/USD pair has been moving on a downward trend after forming a double top pattern early this month. The price has remained below the 14-day and 28-day moving averages while the RSI has moved slightly lower. The pair is trading along the 38.2% Fibonacci Retracement level while the signal line of the MACD has remained below the neutral line. The pair may continue moving lower to test the 23.6% Fibonacci level ay 0.6728.