The Australian dollar rally continued during the Asian session after strong Chinese services PMIs. In a report, Caixin and Markit said that the country’s services PMI increased from 56.8 in October to 57.8 in November. That was better than the expected 56.5 and the biggest increase since July this year. The numbers are an indication of the strength of the Chinese economy as it recovers from the pandemic. Early this week, the manufacturing PMI by both Caixin and the Chinese government showed that the sector was also doing well. Further data from Australia showed that exports increased by 5% in October while imports rose by 1% leading to a trade surplus of more than $7.45 billion.
The price of crude oil wavered as traders reacted to news that the UK has approved a Covid-19 vaccine. Other countries are expected to join the trend in the next few weeks. The hopes are that, with a vaccine, the world will go back to normal leading to increased demand. Traders are also focusing on OPEC and its allies, who will resume discussions about supply cuts. The meeting, which started on Monday, will reconvene today after significant divisions. Most countries continue to support supply cuts while a small group, like the UAE, wants to increase production in January.
Today, the focus will shift to the final services PMIs numbers of the year. In general, most analysts expect the data to show that the PMI in most European countries dropped in November because of the new lockdowns. For example, in Eurozone and the UK, they expect the PMI will drop to 41.3 and 45.8. From the United States, we will receive the services PMIs from Markit and ISM and the weekly jobless claims data. These numbers come at a time when Washington is deliberating on a new stimulus package.
The rally on the EUR/USD continued in overnight trading as the pair reached a high of 1.2120, the highest level since 2018. This rally happened after the pair broke-out above 1.200 on Tuesday this week. On the hourly chart, the rally is being supported by the short, medium, and long-term moving averages. Oscillators like the Relative Strength Index (RSI), moving average of the oscillator, and stochastics have also continued to rise. Therefore, the pair will likely continue rallying, with the next target being at 1.2150.
The XBR/USD price is wavering as traders eye the OPEC meeting. The pair is trading at 48.22, which is higher than this week’s low of 46.73. On the hourly chart, the price is between the middle and upper line of the Bollinger bands. The on-balance volume indicator has also started to decline while the awesome oscillator is above the neutral level. Therefore, the pair will likely continue rallying as odds of supply cut extension rise.
The AUD/USD pair rose to an intraday high of 0.7420 after impressive data from Australia. On the four-hour chart, this price is along the upper side of the ascending channel shown in yellow. The price is also being supported by short and longer-term moving averages and other oscillators. Therefore, there are two possible scenarios at this point. The pair can break-out and continue rallying. Alternatively, the pair can reverse as bears attempt to retest the lower side of the channel at 0.7535.