Euro declines after ECB interest rates decision

The price of crude oil declined today as investors started to worry about increasing US supply. Earlier on, the American Petroleum Institute (API) released the inventory data for the past week. The numbers showed an increase of inventories by more than 6.5 million barrels. Investors were also worried about the supply issue after US joined a number of western countries in recognizing the leader of Venezuela’s opposition party as president. This issue matters because the country has the biggest oil reserves in the world.

The euro declined after the European Central Bank (ECB) released its interest rates decision. As expected, the bank left interest rates unchanged. Data from the region continues to show that the economy is weakening, with many investors believing that a number of countries – including Germany – could go into a recession. This continued today after the release of manufacturing PMI numbers that disappointed. This month, the German manufacturing PMI declined to 49.9. This was lower than the expected 51.1. A figure below 50 indicates that the activity is contracting. For the EU27 countries, the manufacturing, services, and composite PMI were 50.5, 50.7, and 50.8, lower than the expected 51.5.

The sterling pared the gains made in the past two days and lost 35 basis points. This happened after some members of parliament agreed to abandon a plan to force a second Brexit referendum. The group blamed labor leader, Jeremy Corbyn for not getting behind their plan. There are also concerns that the sterling is becoming overvalued before a way forward on Brexit has been found. Meanwhile, in Australia, the country released better-than-expected jobs numbers with the unemployment rate declining to 5%. The employment change increased by 21.6K, which was higher than the expected 16.5K. In the United States, the initial jobless claims rose by 199K, which was better than the consensus estimate of 219K. This is a good reading considering that many government employees are not being paid during the shutdown.

EUR/USD

The EUR/USD pair continued the decline started earlier this month and reached an intraday low of 1.1330. The decline continued after the ECB released its interest rates decision. On the four-hour chart, this price is along the lower line of the Bollinger Band, while the signal line of the stochastic indicator is headed downwards. The RSI is also approaching the oversold position. Therefore, there is a likelihood that the pair will continue moving downwards. If it does, it will likely find support along the 1.1300 level.

XTI/USD

The price of US crude oil declined ahead of the government data on inventories. The price reached an intraday low of $52, which was lower than the short and medium-term moving averages. This price is also between the 100% and 61.8% Fibonacci Retracement levels. After weeks of gains, there is a possibility that the price will go lower as investors pay attention to the happenings in Venezuela. If Nicholas Maduro exits, the price could come down as the country resumes exporting.

GBP/USD

After days of moving up, the GBPUSD pair declined today as the possibility of a no-deal Brexit increased. The pair reached an intraday low of 1.3010. On the hourly chart, this price is along the lower line of the Bollinger Bands. The Average Directional Movement Index Wilder started going down after reaching an intraday high of 57. This means that the pair could resume the upward trend although traders should expect some volatility.