Crude oil price jumps as OPEC+ set to meet on Monday
The price of crude oil rose today after it emerged that OPEC+ members will hold a virtual meeting on Monday. A source told Bloomberg that the meeting will be open to all OPEC members and other oil countries. The goal of the meeting is to address the historical low prices, increased supplies, and low demand. The challenge is how to coordinate the supply cuts since Saudi Arabia, the de facto leader has said that it will only cut if other oil producers, including the US cuts, supply too. Another challenge is that a cut of 10 million barrels a day will not be enough since the world is currently oversupplied. Brent rose to $33.45 a barrel while WTI rose to above $28.
European stocks dropped as the market reacted to the disappointing services and composite PMI data from the region. The worst-affected country was Italy, the virus’ epicenter, which saw the services PMI drop to a historic low of 17.4. In Germany, the services PMI dropped to 31.7 while in France, the index declined to 27.4. Meanwhile, across the Eurozone, the services PMI dropped to 26.4. These are worse numbers than those recorded in the great financial crisis of 2008/9. They show how the European economy has been hurt.
The US dollar rose after the Labour Department released the nonfarm payroll numbers for March. The numbers showed that the US economy lost more than 701k jobs, in its worst month since the global financial crisis. This number was worse than the expected job losses of more than 100k and worse than February’s job gains of more than 270k. The unemployment rate rose to 4.4% while wages and the number of hours moved slightly downwards. The number came a day after we received the official jobless claims data that showed that more than 6.6 million Americans applied for unemployment benefits in the past week.
The XBR/USD pair rose to an intraday high of 33.52. As it did this, the amount of volatility rose as evidenced by the Envelopes and the Average True Range (ATR) indicator. Meanwhile, the money flow index, which is similar to the RSI rose to the overbought level of 80. The pair may continue rising ahead of the virtual meeting by OPEC+ members.
The EUR/GBP pair rose after the PMI numbers from Europe. The pair, which was previously falling, rose to an intraday high of 0.8800. This price is between the 50% and 38.2% Fibonacci Retracement level on the hourly chart. The price is also significantly below the Ichimoku cloud while the RSI has started to edge up. This increase is likely a short reversal, which will see the pair start declining in due time.
The EUR/USD pair declined slightly after the US released weak employment numbers. This was partly because the market was already pricing-in a weak number. The pair is trading at 1.0790, which is between the 23.6% and 38.2% Fibonacci Retracement level. The price is also below the 14-day and 28-day exponential moving averages while the RSI has moved to the oversold level. The pair may continue moving lower during the American session.