Australian dollar wavers ahead of RBA interest rate decision

The price of crude oil declined today as traders waited for the outcome of the annual meeting of OPEC and its allies. Media reports had mixed information ahead of the meeting. In an earlier report, Bloomberg said that the cartel was divided about extending supply cuts for about two or three months. In another report, the WSJ said that the members were expected to extend the cuts in a bid to prevent oversupply. Still, the two sides are facing a major challenge as US producers increase their output. On Wednesday last week, Baker Hughes reported that the number of active rigs had increased for 9 weeks in a row. 

The British pound was little changed today as the likelihood of a Brexit deal increases. According to UK government officials, the main differences with the EU have been narrowed down. The two sides have made strong strides in agreeing on a level playing field. However, the main challenge is on fisheries, where the EU insists on having access to UK fishing waters. Meanwhile, data released by the Bank of England (BOE) showed that the mortgage market had started to cool. Mortgage lending fell from £4.86 billion in September to £4.29 billion in October. In the same period, mortgage approvals rose to 97.3k. Net lending to individuals declined from $4.2 billion in September to $3.7 billion.

The Australian dollar declined slightly today as the Reserve Bank of Australia (RBA) started its monetary policy meeting. Economists expect that the bank will leave interest rates unchanged at 0.10% and continue with asset purchases. The decision will come a day after the statistics bureau released strong corporate pre-tax profit numbers. It will also come after China released better-than-expected manufacturing and non-manufacturing PMI numbers. The data from the statistics office showed that the headline PMI rose to 52.1 while the non-manufacturing PMI rose to 56.4.

XBR/USD

The XBR/USD pair declined to an intraday low of 47.05, which is the lowest level since November 24. The price is also below this month’s high of 48.90. On the hourly chart, the price has moved below the 14-period and 28-period moving averages. The Relative Strength Index (RSI) has moved from the overbought level of 82 to the current 42. It has also formed a head and shoulders pattern. For the next two days, the pair is likely to be a bit volatile as traders wait for the outcome of the OPEC meeting.

EUR/USD

The EUR/USD pair rose to an intraday high of 1.1985, which is the highest level since September 1. On the four-hour chart, the price is below the YTD high of 1.2011. It is also above the two lines of the envelopes indicator. It is also above the 25-day moving average while the Relative Strength Index (RSI) and the momentum indicator have continued to rise. Therefore, the pair is likely to continue rising during the American session.

AUD/USD

The AUD/USD pair is trading at 0.7385, which is slightly below last week’s high of 0.7045. On the four-hour chart, the price is between the ascending channel that is shown in yellow. It is also above the variable index dynamic average. The money flow index (MFI) has also started to drop. The pair will likely remain in the current range ahead of the RBA decision.