The price of crude oil crawled back after having one of its worst days this year. Brent, the global benchmark, rose from $68.2 to $69.2 while West Texas Intermediate (WTI) rose from $65.2 to $66.86. These prices are substantially lower than the highest levels this year as investors remain concerned about demand as the Delta variant continues. A key worry is China, where the number of cases is rising. Chinese authorities cancelled all large-scale events and exhibitions to curb the spread. At the same time, some key companies like Amazon and Wells Fargo have recently delayed their return-to-work plans as the Delta variant spreads. Oil stocks like ExxonMobil, BP, and Royal Dutch Shell fell by more than 2% on Monday.
American stocks were mixed as investors watched the latest proceedings in the Senate where the house is set to pass the $1 trillion infrastructure package. This bill seeks to help rebuild the country’s roads and bridges and invest in clean energy. Still, the overall impact of the bill to the American economy will be muted since it will be implemented in a ten-year period. Meanwhile, the consolidation wave continued. On Monday, Cargill and Continental Grains acquired Sanderson Farms. At the same time, Canadian Pacific presented a new offer to buy Kansas City Southern. The new offer is worth about $31 billion. DraftKings also acquired Golden Nugget Online in a $1.56 billion deal.
The economic calendar will be relatively muted today. The key event will be the latest German economic sentiment data that will be published by the ZEW Institute. Analysts expect that the sentiment declined from 63.3 in July to 56.7 in August. The current conditions are expected to increase from 21.9 in July to 30.0 in August. In South Africa, the statistics agency will publish the latest manufacturing production data while Norway and Sweden will release the latest inflation and industrial production numbers.
XBRUSD
The price of Brent declined to a low of 68.2 yesterday as fears of the latest wave of the pandemic remained. The lowest level on Monday was slightly above the pair’s July 20 low. This means it has formed what looks like a double-bottom pattern. It remains below the 25-day and 50-day moving averages. Oscillators like the Commodity Channel Index and MACD have tilted higher. Therefore, the pair will likely rebound as investors target the next key resistance at 70.00.
EURUSD
The EURUSD pair remained under pressure ahead of the upcoming German sentiment numbers. It dropped to 1.1732, which was slightly below the key support at 1.1750. The pair has dropped below the 25-day moving average while the MACD has moved below the neutral line. The RSI has also declined below the oversold level of 30. Therefore, the pair may keep falling as bears attempt to move below 1.1700.
AUDUSD
The AUDUSD tilted lower during the overnight session. The pair declined to 0.7318, which was the lowest level since July 21. The MACD has also moved below the 25-day moving average. It has also formed a double-top pattern at 0.7420. Therefore, the overall view of the pair is bearish, with the next key target being at 0.7250.
