Crude oil price rises after a sudden decline of US inventories
The price of crude oil rose in overnight trading as the market reflecting on the latest inventories data from the American Petroleum Institute (API). Crude stocks declined by more than 4.7 million barrels last week. That was a bigger decrease than the median estimate of 2.1 million barrels. In the previous week, the number of stocks rose by more than 2.1 million barrels. The price also rose because of the optimism about the American recovery due to the latest stimulus deal. Later today, oil prices will react to the official inventory data by the Energy Information Administration (EIA).
US futures continued to rally even as the possibility of a new stimulus package eroded. In a statement yesterday, Mitch McConnell, the Senate majority leader, said that he would tie the new bill to two other unpopular proposals: changes to election laws and online speech. The two bills are unpopular even among conservatives. The new stimulus would increase payouts to individuals from $600 to $2,000, which would help supercharge the economy.
The US dollar index declined in overnight trading as traders reacted to news that the new variant of coronavirus had started to spread in the US. The first case was confirmed in Colorado, one of the most affected states in the country. The new strain, which spreads 70% faster than the normal one, presents more risks to the country which has already topped 19 million cases. The dollar declined by more than 0.30% against the euro and sterling.
The EUR/USD pair rose to an intraday high of 1.2293, which is the highest it has been since March 2018. On the four-hour chart, the pair moved above the upper resistance of the ascending triangle pattern. It has also moved above the 25-day exponential moving average while the signal and main lines of the MACD are still above the neutral line. The Relative Strength Index (RSI) has also moved closer to the overbought level. Therefore, the pair may continue rising as bulls target the next resistance at 1.2300.
The GBP/USD pair rose to a high of 1.3537 due to the overall weaker US dollar. The pair managed to move above the two lines of the envelopes indicator. They are also above the 25-day exponential moving average while the fast and slow lines of the Stochastic oscillator have moved closer to the overbought level. The pair is also above the important trendline that is shown in blue. Therefore, like the EUR/USD pair, this price will possibly continue rising, with the next target being at 1.3545.
The XBR/USD pair rose to an intraday high of 51.35, which is where it has been for the past few weeks. On the four-hour chart, the pair is a few pips above the 25-day and 15-day exponential moving averages. The accumulation and distribution indicator has continued to rise while the awesome oscillator is above the neutral level. Therefore, the pair may remain in the current range today.