The price of crude oil rose in overnight trading as the markets digested the latest inventories data from the American Petroleum Institute (API). The numbers revealed that oil stocks declined by more than 5.27 million barrels. This was a surprise considering the median estimate was for the stocks to rise by more than 600k barrels after rising by 2.5m in the previous week. The EIA will publish its report on inventories later today. Still, the two biggest risks for the oil market are the rising Covid cases and US production.

The Australian dollar is relatively unchanged in early trading even after strong economic data from China and Australia. According to the Australian Bureau of Statistics, the country’s consumer prices increased by 0.9% in the fourth quarter. This led to a year-on-year increase of 0.9%, which was better than the expected 0.7%. Meanwhile, data from China showed that the country’s industrial growth accelerated in December. In total, industrial profits increased by 20.10% from the previous 15.50%. From January to December, the profits rose by 4.1%, defying the coronavirus pandemic.

The US dollar index held steady in the overnight session as traders waited for the important Federal Reserve interest rate decision that will come out in the American session. Economists believe that the bank will leave interest rates and quantitative easing program unchanged, but a change of tone could have an impact on the dollar. The currency will also react to the vital durable goods orders that will come out today. Meanwhile, several important companies like AT&T, Boeing, Abbott Labs, and Lam Research will publish their earnings data.

GBP/USD 

The GBP/USD pair continued rising in reaction to the positive UK employment numbers. The pair is trading at 1.3733, which is the highest level since April 2018. On the daily chart, the price is a few pips below the upper line of the ascending channel. It is also slightly above the short and longer term exponential moving averages while the Relative Strength Index also continued to rise. Therefore, while the upward trend will likely continue, there’s also a possibility that it will retreat as bears target the lower side of the channel.

EUR/USD 

The EUR/USD pair rose slightly during the American and Asian sessions as traders positioned themselves for the Fed decision. The pair is trading at 1.2155, which is slightly higher than yesterday’s low of 1.2100. On the four-hour chart, the pair has formed a descending channel that’s shown in blue. Also, it has struggled to move above the first support of the Andrew’s Pitchfork tool. Therefore, the pair will remain in a bearish trend so long as it is below this level.

AUD/USD

The AUD/USD pair is little changed today even after positive economic data from Australia and China. It is trading at 0.7735, which is above yesterday’s low of 0.7670. On the four-hour chart, this price is also between the 0.7800 and 0.7665 channel. It is also slightly above the 25-day moving average while oscillators are at the neutral level. Therefore, the pair will likely remain in the current range today.