CRUDE OIL PRICE RALLIES AS US DRIVING SEASON STARTS

Crude oil prices rose on Monday as the summer driving season kicks off in the United States. Brent rose above $120 for the first time since March while the West Texas Intermediate rose to $116. In most years, the beginning of summer marks the start of the driving season in the US. At the same time, refined product inventories have declined while distillate stocks have dropped to the lowest level in 14 years. Oil also rose as China started moving out of its lockdowns, which will also lead to more demand in the coming months. OPEC+ will start its meeting on Thursday and will likely continue with its gradual supply easing policies.

The euro continued rising after a slew of economic numbers from Europe. According to the European Commission, industrial sentiment declined from 7.7 to 6.3, which was lower than the median estimate at 7.5. Services sentiment rose from 13.6 to 14.0 while consumer confidence declined to -21.1. These numbers worsened as the cost of doing business increased. Meanwhile, data from Germany showed that consumer inflation continued rising. Headline CPI rose from 7.4% to 7.9% while the harmonized figure rose from 7.8% to 8.7%. Elsewhere, in Spain, the headline CPI rose from 8.3% to 8.7%.

European stocks rose while bond yields retreated following the strong performance of American shares. The Stoxx 600 rose by 0.8% while the German 10-year Bund yield rose by 0.09% to 1.04%. Still, energy costs continued rising as the EU sought to close ranks around a plan for a partial Russian oil ban. At the same time, Denmark is risking having its gas supply cut for refusing to buy Russian oil in roubles. In France, the CAC 40 rose by 0.55% while the DAX index rose by 0.61%.

EURUSD

The EURUSD continued its recovery mode after the latest German inflation data. The pair rose to a high of 1.0765, which was above the 25-day and 50-day moving averages. The Relative Strength Index has moved close to its overbought level while the MACD has moved above the neutral point. It also moved above the 61.8% Fibonacci retracement level. The pair will likely keep rising as bulls target the key resistance at 1.0800.

XBRUSD 

The XBRUSD pair continued its bullish trend as the driving season started. The pair is trading at 116.17, which was the highest point since March. It managed to move above the key resistance level at 114.17, which was the upper side of the ascending triangle. It has moved above the 25-day and 50-day moving averages while the MACD has continued rising. The pair will likely keep rising this week.

AUDUSD

The AUDUSD pair continued rising and reached the highest point since early May. It has moved between the 38.2% and 50% Fibonacci retracement level. It has moved above the dots of the Parabolic SAR and the 25-day and 50-day moving averages. The Relative Strength Index has also risen. The pair will likely keep rising to about 0.7250.