CRUDE OIL JUMPS AS SUPPLY AND DEMAND IMBALANCE CONTINUES

The US dollar was little changed in the overnight session after the latest US retail sales numbers and the Federal Reserve minutes. According to the country’s statistics agency, retail sales jumped by 3.8% in January after slipping in December. That was the biggest increase since March last year. The numbers signaled that Americans were willing to spend even as the prices of most items soared in January. Last week, data by the Bureau of Labor Statistics showed that the headline consumer price index soared to the highest level in more than four decades. The dollar also reacted to hawkish minutes by the Fed.

US stocks declined on Wednesday as the market continued to focus on the crisis in Europe. While Russia has started moving some of its troops from its border with Ukraine, Nato confirmed that the country was adding more people and equipment. The assessment by Nato followed another statement by Biden who warned that Russia could still attack. Some of the biggest movers in Wall Street were Wix, Roblox, ViacomCBS, Shopify, and Toast. Viacom shares declined after it delivered weak earnings and held its investor day.

The price of crude oil rose sharply in the overnight session as worries of Ukraine returned. Investors are worried that sanctions on Russia will affect oil output. While the planned sanctions don’t apply on Russia’s oil and gas sectors, they will have an impact on the sector. Russia’s oil accounts for about 10% of total global production. Prices also rose after US inventories rose last week. According to the Energy Information Administration (EIA), inventories rose by more than 1.12 million barrels after falling by 4.75 million barrels a week earlier.

Later today, the key events to watch will be the latest US housing starts, building permits, initial jobless claims, and the Philadelphia Fed manufacturing index. In Turkey, the country’s central bank will deliver its decision. Analysts expect that the bank will leave rates unchanged even as inflation rises by more than 40%.

EURUSD

The EURUSD pair was little changed after the latest US retail sales and FOMC minutes. The pair is trading at 1.1368, which is slightly below the key resistance at 1.1400. On the four-hour chart, the pair is trading slightly above the 25-day and 50-day moving averages. It has also moved between the 38.2% and 23.6% Fibonacci retracement levels while the Chaikin oscillator has moved slightly lower. Therefore, the pair will likely resume the bearish trend today.

XBRUSD

The XBRUSD pair rose to a high of 93.92 after the latest US inventories data. On the daily chart, the price has moved above the important resistance at 93.36. It has also risen above the 25-day moving average while the MACD is above the neutral level. It has also formed an ascending channel that is shown in yellow. Therefore, the pair will likely keep rising as bulls target the next key resistance at 100.

XAUUSD

The XAUUSD pair rose as investors rushed to safe havens amid the worries about Russia. It rose to a high of 1865, which was the highest level since Monday. The pair moved slightly above the key support level at 1,853, which was the highest point in January. It also moved above the 25-day moving average. Therefore, the pair will likely keep rising as bulls target this week’s high of 1,877.