The price of crude oil rallied to a three-year high as traders reacted to the latest OPEC+ meeting. According to the Financial Times; Saudi Arabia and Russia are working towards a deal that will see members cautiously increase their supplies. Today the final decision will come this afternoon. The members are considering adding between 400k and 500k barrels of oil per day. They are afraid that a sharp increase in production will push oil prices substantially higher as demand concerns remain. The price of Brent rose to more than $76 while that of the West Texas Intermediate (WTI) rose to $75.
The US dollar rose against key currency pairs ahead of the latest non-farm payrolls (NFP) data. Analysts expect these numbers to show that the US economy added more than 700k jobs in June after adding 559k jobs in May. Estimates have been wrong in the past two months. They also see the unemployment rate falling to 5.7% from the previous 5.8%. Data published on Wednesday by ADP showed that the private sector added more than 685k jobs. Additional numbers by the Bureau of Labour Statistics (BLS) revealed that the number of people applying for jobless claims declined to the lowest level since the pandemic started in March.
Global stocks rose slightly during the Asian session after the US won international backing for a global minimum tax as part of a strategy to tax global corporations. 130 countries agreed to the outline of the proposal. Importantly, China and India were among the countries that agreed to the proposal. It means that governments could start collecting taxes worth more than $100 billion from large multinationals like Amazon and Apple. The agreement is part of Biden’s plan to increase corporate taxes from 21% to 28%.
EURUSD
The EURUSD pair is trading at 1.1842, which is the lowest it has been since April. On the four-hour chart, the pair has moved below the 25-day and 15-day moving averages. It has also dropped below the Ichimoku cloud. The pair seems to be consolidating near this support level. Also, it has moved below the 61.3% Fibonacci retracement level while MACD is below the neutral level. Therefore, the pair will likely break out lower as investors target the next key support at 1.1800.
USDCHF
The USDCHF pair rallied after weak Switzerland inflation and PMI data. It rose to a high of 0.9270, which was the highest level since April. It moved above the 25-day moving average while the Relative Strength Index (RSI) has moved close to the overbought level. The pair has also formed a bullish flag pattern. Therefore, there is a possibility that the bullish trend will continue as bulls target the next resistance at 0.9300.
GBPUSD
The GBPUSD pair declined to a low of 1.3750, which was the lowest level since the first week of April. The pair has moved below the short and longer-term moving averages and the important support at 1.3783. The MACD has moved below the neutral line while the RSI is slightly above the oversold level. Therefore, the pair will likely keep falling as bears target the next support at 1.3700.
