The price of crude oil jumped sharply in the overnight session after the latest OPEC+ meeting. Brent, the global benchmark, rose to a seven-year high of $81.71 while the West Texas Intermediate (WTI) rose to $78. Natural gas prices also jumped by more than 3%. In a statement, OPEC and its allies said that they will continue adding 400k barrels of oil per day until the end of 2022. This gradual pace of increase was significantly lower than Joe Biden had requested. According to the Financial Times, Saudi Arabia said that oil prices had not risen parabolically like other commodities to warrant a change in production.
Wall Street stocks declined sharply in the overnight session as investors reflected on the rising oil prices and the potential for higher inflation. The Dow Jones index declined by more than 375 points while the Nasdaq 100 and S&P 500 indices crashed by more than 2.5% and 1.5%, respectively. Analysts expect that higher inflation will push the Federal Reserve to hike interest rates faster than expected. Stocks also fell as investors continued focusing on Evergrande, the embattled Chinese developer. The company halted its stock on Monday ahead of a major transaction. Meanwhile, the debt ceiling crisis has also contributed to the weak stocks.
Facebook, the biggest social media company in the world, was in the spotlight in the overnight session as its stock price crashed by more than 5%. This decline was triggered by a whistleblower who accused the company of prioritizing profits over safety. The whistleblower will testify in Senate later today. Meanwhile, the stock also declined after the company’s key assets like Instagram, Whatsapp, and Facebook experienced a major outage that lasted a few hours. Later today, the key events to watch will be the flash services and composite PMI numbers.
EURUSD
The EURUSD was little changed in the overnight session as investors reflected on the rising bond yields in the United States. The pair is trading at 1.1616, which is slightly below yesterday’s high of 1.1640. On the hourly chart, the pair is a few pips above the 25-day moving average while the MACD is slightly above the neutral level. It has formed what looks like an inverted head and shoulders pattern. Therefore, the pair will likely keep rising as bulls target the key resistance level at 1.1650.
XBRUSD
The XBRUSD pair rallied in the overnight session after the latest OPEC+ meeting. The pair surged to a high of 82.40. On the daily chart, it is above the previous bullish flag pattern shown in yellow. It also rallied above the short and longer-term moving averages while the MACD has continued rising. Therefore, the path of the least resistance for the price is higher, with the next key resistance being at 45.
BTCUSD
The BTCUSD pair held steady as the US dollar index retreated. The pair is trading at 49,060, which was slightly below the highest point during the weekend. The price has jumped above the 25-day and 50-day moving averages while the MACD is above the neutral level. The Relative Vigor Index (RVI) has been falling while the pair has formed a bullish flag pattern. Therefore, the pair will likely keep rising in the near term.
