CRUDE OIL PRICE STEADY AMID SAUDI ARABIA SUPPLY CHALLENGES

The price of crude oil held steady in the overnight session as supply concerns remained. The biggest issue is the ongoing crisis in Ukraine, which has pushed western countries to place sanctions on Russia. Russia produces over 12 million barrels per day and sells more than 8 million of them internationally. In a report published last week, the IEA estimated that oil supply will decline by 3 million barrels per day in April. Another concern is that Houthi rebels have been bombing key terminals in Saudi Arabia in the past few days. They have even vowed to continue their attacks, which will lead to more supply challenges.

US stocks were relatively mixed on Monday after experiencing a strong rally last week. The Dow Jones index fell by 150 points while the S&P 500 index dropped by 0.1%. The tech-heavy Nasdaq 100 index also retreated slightly. The main concern is that negotiations between Russia and Ukraine have not made progress. As a result, there are worries that the crisis will lead to more supply chain disruptions and a higher cost of doing business. Also, there are concerns about the hawkish Fed statement. In a speech at the National Association for Business Economics, Powell warned that higher rates were necessary to counter inflationary pressures.

The currencies market will be muted today since there are no important scheduled events. The only major event will be a speech by Christine Lagarde of the European Central Bank (ECB). Still, the statement will likely have no impact on the euro because the stance of the ECB is already known. Like the Fed and the BOE, the bank has turned hawkish and reduced the size of asset purchases. There will be speeches by central bank officials like SNB’s Thomas Jordan, Fed’s Philip Lane, and RBA’s Philip Lowe.

EURUSD

The EURUSD pair has been in a narrow range in the past few days. It remains below the important resistance level at 1.1138, which was the highest level last week. It is also slightly above the ascending trendline shown in yellow. This signals that the pair has formed what looks like an ascending triangle pattern. It is also along the 25-day and 50-day moving averages. Therefore, the pair will likely remain in this range today.

GBPUSD

The GBPUSD pair tilted upwards in the overnight and Asian session as demand for the sterling rose. It is trading at 1.3200, which is the highest it has been since Wednesday last week. The pair has risen above the 25-day and 50-day moving averages while the MACD has moved above the neutral level. It has also formed an inverted head and shoulders pattern and moved over the 23.6% Fibonacci retracement level. Therefore, the pair will likely keep rising as bulls target the resistance at 1.3325.

USDCAD

The USDCA pair dropped to the lowest level since January 27 as demand for the Canadian dollar rose. On the four-hour chart, the pair has moved below the important support at 1.2586. It has also dropped below the 25-day moving average while the money flow index has dropped to the oversold level. Therefore, the pair will likely continue dropping in the next few days.