US dollar spikes ahead of the initial jobless claims data
The price of crude oil is in a tight range as investors react to the inventories data released by the Energy Information Administration (EIA). The data showed that inventories dropped by more than 1.6 million barrels in the previous week. The decline was smaller than the previous decline of 4.5 million and the expected decrease of 2.6 million barrels. The US imported more than 1.15 million barrels of crude oil while the distillate stocks rose by 152,000 barrels. The price is also reacting to an OPEC+ meeting that happened yesterday. In its members said that the world will reach about 97% of pre-pandemic oil demand in the fourth quarter.
The US dollar rose in overnight trading as investors reacted to the minutes by the Federal Reserve. In the minutes, the Fed expressed concern over the future of the US economy, saying that the coronavirus pandemic would stunt growth. They said that the pandemic was weighing on economic activity, employment, and inflation. In this meeting, the members decided to leave the interest rate unchanged and continue with the open-ended quantitative easing policy. The minutes also showed that the members were in favour of more fiscal stimulus from Congress. The dollar will today react to the initial jobless claims data.
The most important data that will come out today is the initial jobless claims numbers. Analysts expect that the initial claims declined to 925K in the previous week. This will be better than the previous week’s 963K. They also expect that the continuing jobless claims declined to 15 million. In Europe, the Norges Bank will release its interest rate decision at 08:00 GMT. Analysts expect that the bank will leave rates unchanged and possibly sound dovish because of the recent strength of the krone. The Turkish central bank will also deliver its interest rate decision.
The EUR/USD pair declined after the FOMC minutes. It’s trading at 1.1846, which is lower than yesterday’s high of 1.1963. On the four-hour chart, the price is along the 50-day and 100-day exponential moving averages. The RSI has moved from the previous overbought level of 70 to the current level of 43. Therefore, the pair is likely to continue falling if it manages to move below the two moving averages.
The GBP/USD pair dropped from yesterday’s high of 1.3260 to the current level of 1.3100. Like the EUR/USD pair, the GBP/USD is trading along the 50-day and 100-day exponential moving averages. It has also formed a three black crows pattern and the price is between the lower and middle line of the Bollinger bands. The relative vigour index has also declined sharply. Therefore, the price is likely to continue falling as bears aim for the next support at 1.3050.
The USD/JPY pair rose to an intraday high of 106.18. On the four-hour chart, this price is above the 100-day EMA and is along the 50-day EMA. It is also slightly below the 38.2% Fibonacci retracement level while the RSI has been rising. The pair’s trend seems bullish, which means that it will likely continue rising, with the next target being the 38.2% retracement at 106.36.