Aussie rises after strong Australian GDP data
The Aussie rose in early trading after impressive data from Australia. According to the statistics agency, the country’s economy expanded by 3.1% in the fourth quarter. This increase was better than the median estimate of 2.5%. As a result, the economy contracted by an annualised rate of 3.1%. The strong performance of the Australian economy was due to a 3.2% increase in private consumption and a 3.6% increase in capital expenditure. Further, data by Markit showed that the country’s services PMI declined from 55.6 to 53.4, which is a sign that the sector continued to do well.
The price of crude oil declined sharply after a sharp increase in US inventories. According to the American Petroleum Institute (API), US inventories rose from 1 million barrels to more than 7.3 million barrels. This was the biggest increase of inventories this year, according to the API. Later today, the Energy Information Administration (EIA) will release its report. Oil prices are also falling ahead of the next OPEC+ meeting. Leaders are expected to deliberate on what actions to take now that oil prices have moved to pre-covid levels.
There will be several key economic events today. Markit will publish the important global services PMI numbers. Economists expect these numbers to show that the sector did well in February as countries started to reopen their economies. For example, they expect the US services PMI to rise to 58.7 and the Eurozone to increase to 45.7. In the United States, ADP will publish the latest private nonfarm payroll numbers. This data will come two days ahead of the Bureau of Labour Statistic’s NFP data. In Switzerland, the statistics agency will publish the latest GDP numbers.
The EUR/USD price bounced back in the overnight session as US yields rose. The pair rose to an intraday high of 1.2083, which was slightly above the 25-period and 15-period moving averages. The pair also seems to be forming a head and shoulders pattern, with the current price being slightly below the right shoulder. Also, the signal and histogram of the MACD have started to rise. Therefore, the pair may continue rising in the short term and then pull-back.
The AUD/USD rose to an intraday high of 0.7825 after strong Australian GDP data. On the hourly chart, this price is slightly below the upper side of the yellow ascending channel. Also, it is slightly above the 25-period and 15-period exponential moving averages (EMA). The Relative Strength Index (RSI) has risen and is approaching the overbought level of 70. Therefore, while the pair may continue rising, there is also a possibility that it will retest the lower side of the channel at 0.7753.
The XBR/USD pair declined to an intraday low of 62.16. On the hourly chart, the price has moved below the ascending yellow trendline. It also seems to have formed a small double bottom pattern. The price is between the lower and middle lines of the Bollinger Bands. Therefore, a drop below the lower side of the double bottom at 62.15 will be a victory for the bears, meaning that the price may keep falling.