Crude oil price falls as demand appears to evaporate
The price of crude oil dropped by more than 3% as investors continued to worry about demand. With most planes not flying, and with most people in the developed world staying at home, investors worry that demand will drop faster than expected. Meanwhile, investors are concerned that Saudi Arabia has expressed no signs that it would ease production even with pleas from the US. As such, the market is worried about the confluence of the lowest demand and the highest supplies in modern times.
Asian stocks and American and European futures dropped as the number of Coronavirus cases continued to soar. The number of reported cases has increased to more than 721k while the number of deaths has soared to more than 33k. The number of new cases in the US increased by more than 18k while those in Italy and Spain increased by more than 11k combined. In response, Donald Trump said that he would extend US social distancing guidelines until April 30.
The economic calendar will be light today with no major data expected to be released. From the UK, we will receive the housing price index from Nationwide. This data will come a few days after the biggest UK banks asked the government to freeze the housing market. They argued that valuation had become complicated because of the pandemic. We will also receive preliminary CPI data from Spain and Germany, and mortgage applications and approvals from the UK. Finally, we will receive business sentiment data from the European Union.
The AUD/USD pair was relatively unchanged as traders waited for the third stimulus package from the Australian government. The pair is trading at 0.6147, which is close to where it closed on Friday. This price is also above the important support level of 0.6090 and slightly above the 14-day and 28-day exponential moving averages. The pair may continue rising and attempt to test the important resistance level of 0.6200.
The XBR/USD pair dropped to an intraday low of 27.00 as traders continued to worry about supply and demand. Today’s price is the lowest it has been since March 19. On the 30-minute chart, this price is below the 14-day and 28-day exponential moving averages. It is also along the important support shown below in blue while the histogram and signal line of the MACD has remained below the centreline. A bearish trend will likely continue if the pair trades below the important support of 27.00.
The EUR/USD pair declined slightly as traders rushed to the dollar amid the Coronavirus pandemic. The pair is trading at 1.1093, which is slightly below Friday’s close of 1.1144. On the hourly chart, the price is slightly above the 50% Fibonacci Retracement level. It is also below the important resistance line shown in yellow below. In addition, it is along the teeth of the Alligator indicator. The pair may test the 50% Fibonacci level at 1.1056 and then resume the upward trend later today.