The price of crude oil rose to the highest level in more than two years after OPEC raised its demand forecast and after the members agreed to slow their supply forecasts. Brent, the international benchmark, rose by 3% to $71.34 while the West Texas Intermediate (WTI) rose to $69. Russia and Saudi Arabia said that while demand is rising, there were still coronavirus concerns that hindered them from raising supplies further. They agreed to continue with their plan to slowly increase production in July. The prices will today react to the latest estimate of US inventories that will be published by the American Petroleum Institute (API).
The euro held steady against the US dollar after the latest European inflation numbers. Data revealed that Eurozone consumer prices rose from 1.6% in April to 2.0% in May. This was the first time that the figure rose to the European Central Bank (ECB) target since 2018. The rise followed a significantly sharper US inflation, which rose by 4.2% in April, above the Fed’s target of 2.0%. As such, the new reading will likely fuel expectations that the ECB will start winding down some of its pandemic response tools like quantitative easing. The monetary policy committee will meet next week.
The Australian dollar held steady after relatively impressive GDP data from Australia. The numbers showed that the economy expanded by1.8% quarter-on-quarter in the first quarter. This increase was better than the median estimates of 1.5%. The economy expanded by 1.1% year on year, better than the expected 0.5%. The growth was due to a 0.7% increase in household consumption and a 4.7% increase in capital expenditure. The data came a day after the Reserve Bank of Australia left interest rates unchanged.
AUDUSD
The AUDUSD was little changed during the Asian session. It is trading at 0.7760, which is slightly above last week’s low of 0.7678. On the hourly chart, the pair is between the ascending channel shown in pink. It has also moved above the 25-day moving average while the Relative Strength Index (RSI) is slightly below the overbought level of 70. The pair may keep rising as bulls target the upper side of the channel at 0.7790.
EURUSD
The EURUSD pair was little changed after the latest Eurozone inflation data. It is trading at 1.2220, which was slightly below Tuesday’s high of 1.2250. On the four-hour chart, the pair moved above the 25-day moving average while the Relative Strength Index (RSI) remained at 53. The pair is also above the ascending pink trendline. Therefore, it will keep rising ahead of the upcoming ECB decision.
EURGBP
The EURGBP pair rose to a high of 0.8635 after strong Eurozone inflation data. On the four-hour chart, this price is slightly above the 38.2% Fibonacci retracement level. It also seems to be forming the head and shoulders pattern while the price is above the 25-day moving average. The Relative Strength Index (RSI) has also risen to 58. If the H&S pattern holds, there is a possibility that it will retreat and retest the neckline at 0.8590.
