Crude oil price retreats as US inventories rise
The US dollar pared back some of its losses as traders reacted to statements by Fed officials, including Jerome Powell. Powell reiterated his earlier statements that the US urgently needed another fiscal stimulus. He also said that the bank will continue with its emergency programs, including its corporate bond acquisitions. He made these statements a few hours after the US labour department released weak retail sales numbers. The data showed that overall sales rose by just 0.3% while the core retail sales rose by 0.2%. Further data showed that US industrial production rose by 1.1% in October while manufacturing production rose by 1.0%.
The price of crude oil was little changed today as traders reacted to the latest oil inventories data by the American Petroleum Institute (API). Oil stocks rose by more than 4.17 million last week, which was a sharp reversal after the 5.14 million declines in the previous week. Analysts polled by Reuters were expecting the inventories would rise by 1.95 million barrels. Later today, the EIA will release the official data expected to show that stocks rose by 1.65 million barrels. The price of oil is battling the reported rise in covid cases and the recent vaccine news.
The economic calendar will have several key events today. Earlier, we received PPI input data from New Zealand, trade numbers from Japan, and wage index data from Australia. The key numbers to watch today will be UK inflation numbers, European car registration data, Canada inflation, and United States building permit numbers. With the unemployment rate in most countries still low, analysts expect the data will show that inflation is low. They also expect data to show that housing starts rose from 1.415 million to 1.460 million while building permits rose from 1.545 million to 1.56 million.
The EUR/USD pared back the gains made yesterday when it reached a high of 1.1893. It is now trading at 1.1858. On the hourly chart, the price remains in an overall upward trend as evidenced by the ascending white line. It is also along the 78.6% Fibonacci retracement level and slightly below the 25-day moving average. Therefore, the upward trend will continue so long as the price is above this line. If it does, the pair may retest yesterday’s high of 1.1893.
The AUD/USD pulled back in the American and Asian sessions. It is trading at 0.7281, which is slightly below yesterday’s high of 0.7341, where the pair formed a double top. The price is slightly above the 61.8% Fibonacci retracement level while the MACD has made a bearish reversal pattern. It has also moved below the variable index dynamic average, which sends a signal that sellers in control. The pair will therefore likely move to the next support at 0.7220.
The XBR/USD pair is little changed today and is trading at 43.62, which is an important level since it was where it formed a triple top in October. It has also moved below this week’s high of 45.42 and is at the same level as the 15-day moving average. The Relative Strength Index (RSI) has also moved from the overbought level of 77 to the current 52. Therefore, the outlook for the pair is neutral, with the key levels to watch being 45.42 and 42.55.