Pound rises to three-year high ahead of UK retail sales data
The price of crude oil declined as traders reacted to reports that Saudi Arabia was planning to increase its production in April. According to the Wall Street Journal, the country believes that the move will be necessary since prices have already returned to pre-pandemic highs. The price retreated even after the EIA published relatively bullish data. Oil inventories increased by more than 7.25 million barrels last week after falling by 6.6 million a week before. This increase was better than the median estimate of 2.4 million barrels. Another bullish factor for oil is that the ongoing freeze in Texas has impacted oil production and transportation.
The Japanese yen wavered even after some relatively strong economic numbers from the country. According to Markit, the manufacturing sector expanded in February. The headline PMI increased from 49.8 to 50.6 while the services PMI increased from 46.1 to 48.0. These numbers show that the Japanese economic recovery is accelerating. Earlier data revealed that the headline consumer price index (CPI) rose from -0.3% to 0.5% while the national core CPI improved from -1.0% to -0.6%. While these numbers are below the BOJ’s target, they are heading in the right direction.
The economic calendar will have several important events today. In the morning session, the Office of National Statistics (ONS) will publish the latest UK retail sales numbers. Analysts predict that overall sales dropped by 2.5% in January as people stayed at home. They see the core retail sales falling by 2.6%. Further, Markit will publish the flash manufacturing and services PMI numbers from around the world. The Canadian statistics agency will deliver retail sales numbers, while in the US, the Fed will release its monetary policy report.
The EUR/USD is trading at 1.2085, which is slightly below yesterday’s high of 1.2098. On the hourly chart, this price is along the 38.2% Fibonacci retracement level and slightly above the 25-day simple moving average. The RSI is also nearing the overbought level of 70. It has also formed an ascending channel. Therefore, the pair may continue rising as bulls target the 23.6% retracement at 1.2118.
The GBP/USD pair rose to a multi-year high of 1.3986. On the hourly chart, the price is trading at the highest level on Tuesday. The price is also above the ascending white trendline and the 15-day exponential moving average (EMA). The signal line and histogram of the MACD are also above the neutral line. Therefore, the pair may continue rising as bulls attempt to clear the resistance at 1.4000.
The XBR/USD price dropped to an intraday low of 61.33, which is slightly below the year-to-date high of 64.80. On the four-hour chart, the price has moved below the 25-day exponential moving average (EMA) while the RSI and MACD have started falling. Nonetheless, the price is above the white ascending trendline. Therefore, the price may rebound as bulls target the next psychological level of 65.0.