Crude price points lower as Saudi eye supply increase
The price of crude oil declined today after reports stated that Saudi Arabia was considering hiking oil production. According to the Wall Street Journal, the kingdom plans to announce a reversal of the voluntary measures in the next meeting. The increase in output will go into effect in April this year. Meanwhile, data by the American Petroleum Institute (API) revealed that inventories fell again by more than 5.8 million barrels last week. That was after falling by more than 3.5 million barrels in the previous week. The Energy Information Administration (EIA) will publish its inventory numbers later today.
The Australian dollar held steady today after the relatively mixed economic numbers from the nation. The country’s statistics agency said that the unemployment rate dropped from 6.6% in December to 6.4% in January. In the same period, the participation rate dropped from 66.2% to 66.1%. The economy added 29.1k jobs in January. Analysts believe that the upward trend will continue as the country starts its vaccination roll-out. Tomorrow, the Australian dollar will react to the preliminary January retail sales numbers, wage price index, and the flash manufacturing and services PMIs.
The US dollar declined today even after the relatively strong US retail sales numbers. The headline and core retail sales rose by more than 5% in January, helped by the $900 billion stimulus package. The currency reacted to several important numbers today. More than 860k people filed for initial jobless claims while the continuing claims fell to 4.4 million. Meanwhile, housing starts declined by 6% from 1.669 million in December to 1.58 million in January. In the same period, building permits rose by 10% from 1.7 million to 1.8 million.
The AUD/USD pair is trading at 0.7772, which is slightly above this week’s low of 0.7720. On the four-hour chart, the pair has formed a cup and handle pattern. Indeed, this week’s weakness is part of the handle pattern. Further, the price is slightly above the short and medium-term moving averages. Therefore, in the near term, the pair will likely break-out higher since the cup and handle is usually a bullish continuation pattern.
The XBR/USD pair dropped slightly today after reports that Saudi Arabia was considering supply increases. It is trading at 63.65, which is slightly below the intraday high of 63.80. On the four-hour chart, the price remains above the moving averages while oscillators like the Relative Strength Index (RSI) and MACD are at their overbought levels. Therefore, in the near term, the pair may continue rising as bulls target the next psychological level at 65.0.
The EUR/USD snapped higher today mostly because of the overall weak US dollar. The pair is trading at 1.2063, which is slightly below the important resistance at 1.2080. The price is also slightly below the 25-day exponential moving average. At this point, the EUR/USD may resume the downward trend and move below the important support at 1.2023.