The price of crude oil rose as the market reacted to inventory data from the United States. Data released by the Energy Information Administration (EIA) showed that inventories declined by more than 1.9 million barrels in the previous week. That was a higher drawdown than the previous week’s 1.6 million. It was also a surprise considering most analysts were expecting the inventories to rise by more than 1.5 million barrels. On Tuesday, data from the American Petroleum Institute (API) showed that inventories fell by more than 820k barrels.
US stocks rallied yesterday as investors reacted to new stimulus hopes and positive data from the United States. Data from ADP showed that private US companies added more than 749k jobs in September. That was higher than the 650k that analysts were expecting. It was also higher than August’s increase of 481k. This number came a day ahead of the official nonfarm payroll data. Meanwhile, data from the Bureau of Economic Analysis (BEA) showed that the US economy shrank by 31.4%, slightly better than the previous estimate of 31.5%. Meanwhile, Nancy Pelosi and Steve Mnuchin continued to deliberate on the next stimulus package.
The economic calendar will have a number of important data today. In the United States, Markit and the Institute of Supply Management (ISM) will release the manufacturing PMI data for September. Analysts expect these numbers will show some progress for the American economy. The Labour Department will also release the initial jobless claims data. In the European Union, we will receive the producer price index and manufacturing PMIs. Similarly, in Switzerland, we will receive the retail sales and inflation data.
EUR/USD
The EUR/USD pair rose slightly during the Asian session and is trading at 1.1742. On the four-hour chart, we see that the pair is attempting to retest the previous resistance level at 1.1750. Also, it is approaching the higher side of the Bollinger bands and is above the 25-day exponential moving average. The RSI has also risen to 62. Therefore, the pair is likely to continue rising as bulls attempt to move past the resistance at 1.1750.
GBP/USD
The GBP/USD pair rose to a high of 1.2940, which is the highest it has been since September 21. On the four-hour chart, the price is above the 25-day and 50-day exponential moving averages. The price is also a few pips below the important resistance level of 1.3000. It is also between the 50% and 61.8% Fibonacci retracement level. Therefore, the pair may continue rising as bulls aim to test the resistance at 1.3000.
AUD/USD
The AUD/USD pair has risen to the September 22 high of 0.7181. On the hourly chart, the price has managed to move above the 50% Fibonacci retracement level. The price is also supported by the 25-day moving averages while the Relative Strength Index (RSI) has continued rising. Therefore, the pair seems to be in a bullish trend, which means that it may continue rising to the 61.50% retracement at 0.7215.
