OIL PRODUCTION GROWTH IN OPEC PULLS DOWN THE QUOTES
The market’s attention today was on the referendum in Catalonia where most of the voters supported independence of the region from Spain. The Spanish government claimed the referendum as illegal and as a result of attempts by authorities to restrict people from voting, more than 800 people have been injured. In case of a continuation of this political crisis, the euro may weaken against other major currencies. Further pressure for EUR/USD bulls came from the final manufacturing PMI in the US that declined to 58.1 in September, 0.1 less than the previous figure. The unemployment rate in the Eurozone stayed at 9.1% in August against the forecasted decline to 9.0%.
We may see volatility grow for the AUD/USD after the RBA’s monetary policy statement due to be published at 03:30 GMT tomorrow. Most analysts are not expecting any changes in monetary policy settings, but the rhetoric of the central bank’s officials may influence the mood of traders. In previous statements, GDP was slated to grow by 3.0% in 2018 and positive forecasts were made for the labour market. The course of trading may also be affected by reports on new home sales at 00:00 GMT and building approvals in Australia at 00:30 GMT.
Oil prices are falling on the background of rising drilling activity in the US where the number of active oil rigs, according to Baker Hughes, increased by 6 to 750 during the last week. At the same time, oil production growth in Iraq and Libya resulted in crude oil production growth within OPEC to 32.86 million barrels per day in September, and that is also negative for the oil bulls.
The single currency is trying to restore some of the previously lost positions and is currently above 1.1750. Fixing below this figure may become a trigger for continued price drops to 1.1620 and 1.1550. On the other hand, potential growth within the correction may be restricted by resistance at 1.1825. Crossing the zero point by the MACD signal line may provide additional stimulus for growth.
The AUD/USD price rebounded from the support at 0.7800 and in case of saving the positive momentum we may see the quotes returning to the resistance range of 0.7850-0.7870. In case of continued falls within the limits of the channel, immediate targets will be located at 0.7740 and 0.7700. The recent crossing of the zero point by the MACD signal line may stimulate the bulls to push the price higher today.
The American crude oil benchmark WTI demonstrated a confident descending movement where it may test the strong support at 50.00. Breaking through this psychologically important mark may become a trigger for further falls to 48.50 and 47.75. On the other hand, the RSI on the 15-minute chart is in the oversold zone that points to an increased possibility of a price rebound with the first target at 51.00.