- WTI crude oil steady at $29/barrel
- OPEC report raised 2016 oil demand growth to 1.26 million barrels per day
- OPEC projected oil surplus will shrink to 530,000 barrels per day
Higher-yielding currencies took a break from their recent dive, as the OPEC monthly report suggested that the oil situation ain’t so bad. Forex traders also probably lightened up their positions ahead of today’s Chinese GDP release.
OPEC monthly oil report – Just when the rest of the world was worried about the potential impact of Iran’s return to the oil export market, the OPEC released its monthly report and calmed fears of a supply glut. The oil cartel projected that the surplus will shrink from their initially estimate of 860,000 barrels per day to 530,000 barrels per day. In addition, they also expect world oil demand to reach 1.26 million barrels per day, up from their earlier forecast of 1.25 million barrels per day.
With that, crude oil managed to bounce off its recent lows at the start of the week, with WTI crude oil holding steady around $29/barrel and Brent crude oil cruising around $28.70/barrel.
U.S. bank holiday – With U.S. traders off on a holiday, liquidity was lower in the forex market and equities were able to regroup from their 2% tumble last Friday. European equity indices posted smaller declines yesterday, which suggests that investors are taking it easy with their risk-off vibes and waiting for more clues from Mr. Market this week.
Major Currency Movers:
GBP – The British pound was one of the weakest currencies in the forex bunch, with traders likely pricing in expectations ahead of this week’s top-tier U.K. events.
GBP/USD dipped to a low of 1.4237 before recovering back to the 1.4250 level, GBP/JPY found resistance at 168.15 then tumbled to 166.98, and EUR/GBP found support at the .7600 major psychological level and climbed to a high of .7653.
AUD – It was a topsy-turvy time for the Aussie, with the commodity currency giving up ground to its safe-haven forex counterparts earlier on then recovering before the end of the session.
AUD/USD dipped from .6927 to .6856 before edging close to .6900 once more, AUD/JPY found resistance at the 81.00 handle then tumbled to 80.54, and EUR/AUD tested the resistance at the 1.5900 mark before retreating to 1.5786.
- 2:00 am GMT: Chinese Q4 GDP (6.9% expected, 6.9% previous). Don’t forget to check out Forex Gump’s Monthly Economic Review on China!
- 2:00 am GMT: China’s Dec industrial production y/y (6.0% expected, 6.2% previous)
- 2:00 am GMT: Chinese fixed asset investment ytd/y (10.2% expected, 10.2% previous)
- 2:00 am GMT: Chinese Dec retail sales y/y (11.3% expected, 11.2% previous)
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!