AMERICAN STOCKS SOMBERLY ENDED THE QUARTER AS SELL-OFF CONTINUED
The price of crude oil dropped after OPEC and its partners agreed to boost production. The cartel supported a plan they endorsed earlier this month that called for raising output by 648k barrels per day. Before this meeting, OPEC was increasing output by 432k barrels per day. The decision came a few days before Joe Biden is scheduled to travel to Saudi Arabia, where he will meet with the crown prince. Still, analysts believe that the cartel will struggle to meet its daily target. For example, the members pumped nearly 3 million barrels pe day less than its collective target of 42 million. This is mostly because of countries like Angola and Nigeria.
American stocks ended the second quarter in a somber mood as the sell-off continued. The main indices like the Dow Jones and S&P 500 declined by more than 1% as concerns about margins and rates continued. For example, in a statement, RH said that it had seen a sharp downturn in consumer spending this year as mortgage rates rise. The company then decided to slash its forward guidance for the year. This statement was in line with official government data. Persona incomes rose by just 0.5% in May while spending dropped from 0.6% to 0.2%.
There will be several events in the economic calendar. Earlier, data by the Bank of Japan showed that sentiment among small and big companies continued falling in Q2. Most of these companies are seeing the highest inflation rate in decades. At the same time, the slumping yen has made it difficult for companies to import to the country. The Bank of England will release the latest mortgage lending and approval data. The other important number will be the preliminary inflation numbers from the European Union.
XBRUSD
The XBR/USD pair dropped sharply after the latest agreement by OPEC to boost oil production. The pair fell to a low of 107.58, which was the lowest level since June 18th. On the four-hour chart, it retested the lower side of the ascending channel shown in green. It is also below the dots of the Parabolic SAR while the MACD has formed a bearish divergence pattern. Therefore, the pair will likely continue falling as investors wait for Biden and Salman meeting.
EURUSD
The EURUSD pair bounced back ahead of the upcoming Eurozone flash inflation data. It rose to a high of 1.0480, which was higher than this week’s low of 1.0380. The pair remains below the 25-day moving average and the middle line of the Bollinger Bands. The William % Range moved above the oversold level. Therefore, the pair will likely remain in this range as investors position themselves for the new month.
XNGUSD
The XNGUSD pair dropped to a low of 5.6, which was the lowest level since April. It has fallen significantly from this month’s high of 9.6 as US injection to storage increases. It has moved below the important support level at 6.56, which was the lowest level on May 10. The pair moved below the 25-day moving average while the MACD moved below the neutral point. The pair will likely continue falling as bears target the key support at 5.0.
