Oil price rises as OPEC+ inks the biggest oil supply cut deal
The price of crude oil rose today as the market reacted to the historic deal signed between OPEX and non-OPEC members to cut production. The signatories agreed to cut oil production by 9.7 million in the next two months and then by 8 million through December. These cuts are slightly below the anticipated 10 million barrels and are almost double the amount the cartel cut during the last financial crisis. The biggest concern now is whether the supply cuts will be enough to offset the lack of demand around the world as the coronavirus pandemic continues.
The British pound was little changed as the number of coronavirus cases and deaths increased in the UK. More than 10,000 people have died in the country while more than 84k infections have been confirmed. This makes the UK the fifth highest country in terms of deaths. The market also reacted to news that Boris Johnson, who was in ICU last week, had left the hospital and headed to his Chequer’s residence. Meanwhile, the UK is expected to be the worst-affected country in Europe according to Jeremy Farrar, the director of the Wellcome Trust. The finance minister said that the economy may fall by more than 30% this quarter.
The US dollar index rose slightly after Neel Kashkari warned of a long shutdown in the US. Kashkari is the Minneapolis Fed President and a member of the FOMC. In an interview with Face the Nation, he said that without a vaccine, it was likely that the US could see 18 months of rolling shutdowns and outbreaks. An 18-month shutdown would be tragic for the United States, where the unemployment rate has skyrocketed to 4.4%. In an interview with CNN, Dr. Anthony Fauci said that the economy would be partially opened in May but warned of a second phase of the outbreak.
The XBR/USD pair rose to a high of 34.57 from Friday’s close of 33.10. This price is a few points above the 14-day and 28-day exponential moving average. It is also below Friday’s high of 37.07 while the volatility as measured by the Average True Range (ATR) has risen. The pair may continue seeing large swings today as the market continues to react to the deal.
The EUR/USD pair was little changed during the Asian session. The pair is trading at 1.0925, which is slightly above the 38.2% Fibonacci Retracement level on the hourly chart. The price is also slightly lower than the important resistance level of 1.0950, which is shown in green below. The likely scenario is where the pair moves a few pips lower today as traders react to the rising number of coronavirus cases.
The BTC/USD pair declined sharply during the Asian session. The pair is trading at 6,706, which is lower than the day’s high of 7,143. The pair is below the 14-day and 28-day exponential moving averages while the RSI has been rising. The pair may continue seeing this volatility today, with the key levels to watch being 6,500 and 7,000.