Crude oil prices drop ahead of the OPEC+ meeting
The Australian dollar declined slightly in early trading even after strong economic data from Australia and China. In Australia, economic numbers showed that company pre-tax profits increased by 25.8% in the third quarter, a significant increase from the previous increase of 6.3%. Housing credit increased by 0.3% while the inflation gauge increased by 0.3%. In China, data showed that the manufacturing sector continued to accelerate in November. The PMI increased from 51.4 in October to 52.1 in November. Similarly, the non-manufacturing PMI rose from 56.2 in October to 56.4. The two were better than the expected 51.5 and 56.0, respectively.
US futures dropped sharply in the Asian session as traders braced for a major surge in new US infections after the Thanksgiving weekend. On Friday, the country confirmed more than 200,000 new cases for the first time and analysts believe that the trend will continue. This happened as experts at the Food and Drug Administration (FDA) continued analysing data on the vaccines by Moderna and Pfizer. They are expected to provide a go-ahead of the two vaccines in mid-December. Meanwhile, the stocks are falling even as deal-making continues. According to the Financial Times, S&P Global is nearing a deal to buy Markit for about $44 billion.
The price of crude oil declined ahead of the important two-day meeting that will start today. According to CNBC, the cartel will consider whether to delay the supply hikes that were scheduled for January. The members were supposed to increase production by about 2 million barrels. The 9.7 million supply cuts announced in April followed by the reduction to 7.7 million have helped stabilised oil prices which are now nearing $50. However, the biggest concern for OPEC is that US shale producers are coming back online as evidenced by the latest increase in new wells.
The EUR/USD is up to a high of 1.1970 during the Asian session. On the four-hour chart, the price is along the upper side of the Bollinger bands and slightly above the 25-day moving average. It is also at the same level as the upper Bollinger bands while the Relative Strength Index (RSI) and Stochastic have moved above the overbought level. Therefore, the pair will likely continue rising, with the next target being 1.1980 followed by 1.1990.
The GBP/USD price rose to an intraday high of 1.3340. On the four-hour chart, the price is along the red 25-day moving average. It is also slightly below the ascending yellow trendline while the two lines of the relative vigour index (RVI) have continued to decline. For today, the pair will possibly attempt to move above the ascending trendline at 1.3380.
The AUD/USD pair declined to an intraday low of 0.7390 even after impressive data from China. On the four-hour chart, the pair remains above the 25-day moving average. It is also above the important support at 0.7330. The Average True Range (ATR) has continued to decline in a sign of little volatility. Similarly, the signal and main line of the MACD are still above the zero lines. Therefore, it is likely to resume an upward trend today.