The price of crude oil jumped today after Saudi Arabia suggested reducing production. The Saudi oil minister said that the country will slash daily oil production by 500K barrels per day in December. The Kingdom made the decision with the aim of preventing an oversupply in 2019, a suggestion that was opposed by Russia. This decision helped the price of Brent crude oil, which jumped to an intraday high of $72. The price had reached a bear market on Friday.

The sterling fell sharply as traders continued to worry about Brexit. The decline made it the worst performing currency in the developed markets. The main concern among market participants is that Theresa May will be unable to find parliamentary support for the deal she is trying to negotiate with the EU. Already, a number of conservative parliamentarians have said that they won’t support the Chequers plan. This happened ahead of key economic data this week from the UK. Tomorrow, the country will release jobs numbers, which will be followed by inflation numbers on Wednesday and retail sales on Thursday.

The Euro fell sharply as traders continued expressing their concerns about Italy. The main issue is that Italy’s budget was rejected by the European Union. The EU was concerned that the budget did not address key austerity issues. The country is now working to revise the budget. Italy is an important country for the European Union. It is the fourth biggest economy in the region with a GDP of $1.9 trillion. It is also the most exposed to external shocks with its debt being 138% of the GDP. In comparison, Germany, UK and France debt to GDP levels are 64.1%, 87.7% and 97% respectively.

EUR/USD

The EUR/USD pair declined sharply to an intraday low of 1.1240. This was the lowest level since June last year. Starting from October, the pair has lost more than 5% of its value. As of writing, the pair is trading at 1.1266. On the four-hour chart, the pair’s RSI is at 26 while the double EMA are pointing to more declines. The pair is also trading along the lower line of the Bollinger Bands, which is an indication that it could see further declines. If it does, the pair will likely test the 1.1200 support.

GBP/USD

The GBP/USD pair fell sharply to an intraday low of 1.2825. This was the lowest level since November 1. The decline was mostly because of the worries of Brexit. Today, volatility in the pair rose as shown by the Average True Range (ATR) indicator below. The double EMA made a crossover today, which is an indicator that the pair could continue the downward momentum. If it continues to drop, the pair will likely test the 1.2700 level.

XTI/USD

The XTI/USD rose slightly today after signs of supply cuts by Saudi Arabia. The pair reached an intraday high of 61.43, which was slightly higher than Friday’s close of 59.33. Friday’s low was the lowest level since February this year. On the daily chart, the pair’s double EMA shows that it could continue to decline. The RSI is currently at 27, which is slightly higher than where it was earlier today. Even with today’s bounce, there is a likelihood that the pair could continue to go down.