Crude oil slips as OPEC+ members agree on supply cuts
The price of crude oil slipped as the market reflected on the just concluded OPEC+ meeting in Vienna. The highly-anticipated meeting was meant to chart the way forward for the oil market in the coming year. On Thursday, OPEC members agreed to slash production by about 500k per day. This is in addition to the previous 1.2 million supply cuts that were announced in 2018. On Friday, OPEC leaders, led by Saudi Arabia, convinced non-OPEC producers like Russia to join in the cuts. The new phase of oil supply cuts will take place until March 2020. Still, there are concerns that countries like Nigeria and Iraq won’t comply
The Japanese yen was relatively unchanged against the USD in the Asian session as the market received important third quarter data. The GDP expanded by 1.8% in the quarter, which was higher than the previous 0.2% and the expected 1.7%. The economy expanded by a QoQ rate of 0.4%, which was higher than the previous 0.2%. Capital expenditure rose by 1.8% after rising by 0.9% in the previous quarter. Private consumption rose by 0.5%, which was higher than the previous 0.4%. These numbers came a week after Shinzo Abe launched a $121 billion stimulus package. The stimulus was meant to caution the country as the economy faces significant challenges brought about by the two trade wars.
The economic calendar will be light today, but traders will continue watching ongoing trade issues. This week, Donald Trump is set to decide on whether to increase tariffs on more Chinese goods or whether he will reach a deal. The market believes that the relations between the two countries are sour and that a deal will not be made. Meanwhile, in Europe, the market will receive unemployment data from Switzerland and German trade data.
The EUR/USD pair continued moving lower as the market reacted to impressive job data. The pair reached a low of 1.1054, which is slightly below the 61.8% Fibonacci Retracement level on the four-hour chart. The price is slightly below the 14-day and 28-day moving averages. The RSI has declined from a high of 75 to the current 41. The pair may continue moving lower as the market waits for the Fed decision on Wednesday.
The XBR/USD pair declined during the Asian session as the market continued to react to last week’s meeting. The pair is trading at 63.55, which is lower than last week’s high of 64.43. The price is along the 14-day moving average and slightly above the 28-day moving averages on the hourly chart. The RSI has declined from a high of 83.33 to a low of 56. The pair may continue declining to test the 61.8% Fibonacci Retracement level of 62.70.
The price of gold declined on Friday regarding better-than-expected jobs data. The pair declined to a low of 1457.90. The Bollinger Bands have widened, which is a sign of increased volatility. The RSI is trading below the oversold level of 30 while the accumulation/distribution indicator has declined slightly. The pair will likely see more volatility this week as the Fed delivers its decision.