CRUDE OIL PRICE RALLY ACCELERATES AFTER A DROP OF US INVENTORIES
November 26, 2020
Posted by: Analysis Team
Category: FOREX, Technical Analysis
Crude oil rally continued overnight after relatively positive inventories data from the United States. In a report yesterday, the Energy Information Administration (EIA) said that oil stocks dropped by 754k barrels last week. That was a surprise reading considering investors were expecting the stocks to jump by more than 127k. Also, on Tuesday, data from the American Petroleum Institute showed that the stocks rose by more than 3.8 million barrels. In Cushing, inventories dropped by more than 1.72 million barrels while gasoline inventories rose by more than 2.1 million barrels. These numbers came at a time when oil traders have been excited about a return to normalcy because of the Covid vaccine.
The Australian dollar continued rallying during the Asian session as traders reacted to improved economic data. According to Australia’s statistics bureau, the building capital expenditure fell by 3.7% in the third quarter after falling by 4.4% in Q2. Similarly, the plant and machinery capital expenditure, which is an important measure of the GDP fell by 2.2%. Also, the private new capital expenditure fell by 3.0% in Q3 after falling by 5.9% in Q2. The Australian dollar has also rallied because of the overall shift from the US dollar as the vaccination season nears.
Later today, with US markets being closed for thanksgiving, the focus will turn to Europe. In Sweden, the world’s oldest central bank will deliver its interest rate decision at 08:30 GMT. With rates already at 0.0%, analysts believe that the bank will leave the situation unchanged and possibly sound more hawkish because of the vaccine. Other key Swedish data to watch will be the November consumer confidence, manufacturing confidence, and household lending. In Germany, the Gfk Institute will release its survey data on consumer climate. In the Eurozone, the ECB will publish the minutes of its last meeting and private sector loans data.
The XBR/USD pair rose to an intraday high of 48.85, the highest level since March. On the hourly chart, the pair’s upward trend is supported by the 25-day and 15-day exponential moving averages. Similarly, most oscillators, including the Williams percentage range and the relative strength index have moved above the overbought level. With the psychological level of 50 in the horizon, the pair will likely continue rising ahead of an important OPEC+ meeting.
The GBP/USD price rose after the Rishi Sunak speech on 2021-2022 government spending. It reached a high of 1.3398, which was an important resistance level. It has also formed a double-top pattern at the current price. Also, the pair is above the ascending yellow trendline while the awesome oscillator has moved above the neutral line. Therefore, there are two likely scenarios. First, the upward momentum can continue, pushing the pair above the resistance level at 1.3398. Second, because of the double-top pattern, the pair could fall and possibly move below the rising trendline.
The EUR/USD pair rose to an intraday high of 1.1925, which is also along an important resistance level. It is the highest it has been since September 1. On the four-hour chart, this price is above the ascending yellow trendline. It is also slightly above the 25-day and 50-day moving averages and along the upper side of the Bollinger bands. The pair is also in the accumulation phase, according to the A/D indicator. Therefore, like the GBP/USD, there is a possibility that it will continue rising, with the next point to watch being 1.1930.