US dollar bounces back after better than expected jobs data
The price of crude oil rallied today after Russia and Saudi Arabia reached a deal with Iraq on supply cuts. The deal will see Iraq start complying on the agreed quota and compensate for the cheating it did in May. Other countries that have not been complying are Nigeria, Angola, and Kazakhstan. The agreement by Iraq means that the meeting that was scheduled for the coming week will take place tomorrow. According to Bloomberg, Russia and Saudi have reached an agreement to continue with the cuts because they seem to be working.
European stocks rose today as the market reacted to the ECB interest rate decision made yesterday. The DAX, FTSE 100, and CAC 40 rose by 1.35%, 0.90%, and 1.78% respectively. As a result, the indices have had their best week this year. In its statement yesterday, the ECB said that it was boosting its quantitative easing program by more than €600 billion. Also, investors have been reacting to the multibillion-euro stimulus package announced by individual countries and the European Commission. Optimism is also rising over recent data that showed that the region was recovering. For example, while the manufacturing and services PMI numbers were in contraction, they were better – by far – than those released in May.
The US dollar rose after the ONS released better than the expected jobs numbers. The data showed that the US economy created more than 2.5 million jobs in May after losing more than 20 million in the previous month. The unemployment rate eased from the previous 14.7% to 13.3%. The U6 unemployment rate, which is usually a better indicator of unemployment declined to 21.2%. At the same time, average hourly earnings declined by 1% while the average hourly worked rose to 34.7. Meanwhile, in Canada, the unemployment rate rose to 13.7% as the country created more than 289k jobs.
The DAX index rose to an intraday high of €12,691, which was a few points below the highest level since March. On the four-hour chart, the price is above the 61.8% Fibonacci retracement level. It is also above the 50-day and 100-day exponential moving averages while the RSI has moved to the overbought level of 74. Therefore, the index may continue to rise as bulls attempt to reach the important resistance level of €12,900.
The XBR/USD pair rose today after Saudi and Russia reached a deal with Iraq. The pair is trading at 41.20, which is the highest it has been since March 6 this year. As a result, the price is above the 50-day and 100-day EMA on the four-hour chart. The RSI has also moved above the overbought level while the price is above the Ichimoku cloud. While the pair may continue to rally on Monday, there is a possibility of more volatility in the aftermath of the OPEC meeting.
The EUR/USD pair declined slightly after the US released better-than-expected jobs data. The pair is trading at 1.13336, which is slightly below the day’s high of 1.1386. On the four-hour chart, the price is above the 50-day and 100-day exponential moving average while the RSI is above the overbought level. The pair may oscillate around this level as the market digests the jobs data ahead of the FOMC decision next week.