Crude oil momentum continues as global demand rises

The price of crude oil rose in overnight trading as investors remained optimistic about global demand as economies reopen. The price of Brent, the international benchmark, rose to more than $40 while West Texas Intermediate (WTI) rose to above $38. Investors are also waiting for an important OPEC+ meeting that will happen in the coming week. According to Bloomberg, Russia and Saudi Arabia are committed to continuing with the supply cuts announced in May. Another catalyst was the inventories data released by the American Petroleum Institute (API). Data showed that US inventories declined by more than 500k barrels after rising by 8.7 million barrels a week before.

The Australian dollar rose to the highest level this year as the market reacted to several numbers from Australia. The construction index in the country rose from the previous 21.6 in April to 24.9 in May while the important services PMI rose from 19.5 to 26.9. Building approvals in April declined by 1.8% after declining by 4.0% in the previous month. Meanwhile, the final reading of Q1 GDP showed that the economy contracted by 0.3%. These numbers came a day after the RBA delivered its interest rate decision. They left rates unchanged and pledged to leave them low for an extended period as they try to stimulate the economy.

Looking ahead, we will receive the services PMI data from several countries including those in the eurozone and the US. In most countries, the services PMI matters more because the sector creates the most jobs. For example, in the UK, the services sector is responsible for about 70% of the GDP. We will also get the ADP nonfarm employment change for May. Analysts polled by Bloomberg expect the data to show that private payrolls dropped by 9 million after dropping by 20 million a month before. We will also receive the crude oil inventories data from the EIA and the Bank of Canada interest rate decision.

EUR/USD

The EUR/USD pair rose to a high of 1.1195 which is the highest it has been since March 16. On the four-hour chart, the price is above the 50-day and 100-day exponential moving averages. The RSI is above the overbought level of 70 while the price is above the 61.8% Fibonacci retracement level. The price may continue rising as bulls attempt to move above 1.1200.

AUD/USD

The AUD/USD pair rose to a high of 0.6980, which was the highest level since January 7. On the daily chart, the price is above the 50-day and 100-day exponential moving averages while the Force index is above the neutral line. The RSI has moved above the overbought level. The pair may continue rising as bulls attempt to move above the resistance of 1.1700.

USD/CAD

The USD/CAD pair declined to an intraday low of 1.3482 as the market waited for the BOC interest rate decision. That was the lowest it has been since March 3. On the four-hour chart, the price is below the 50-day and 100-day exponential moving averages while the RSI has moved to the oversold level. The pair may continue falling as the price of crude oil continue to rise.