USD WEAKENS AFTER CONSUMER INFLATION REPORT
Volatility rose today after the release of the consumer price index in the US, according to which inflation increased by 0.5% in September, which is 0.1% more than in August, but 0.1% less compared to the forecast. Core CPI increased by only 0.1% against the expected 0.2%. Slower than expected inflation growth reduces the possibility of the interest rate increase anticipated in December. Retail sales data in the US also disappointed investors. The indicator increased by 1.6% in September versus the 1.7% predicted, but this figure was much higher than the decline in August of 0.1%. Hurricanes Irma and Harvey are the likely causes to the disappointing data reports from the US.
The price of the American crude oil benchmark is correcting downwards after a confident increase. Yesterday the WTI bulls were cheered by news on the reduction of inventories in the US by 2.7 million barrels against 1.9 million barrels expected. The growth potential however is limited due to the increase of oil production in OPEC countries. Volatility is likely to remain high today because of the data release by Baker Hughes on active drilling rigs count in America. Rising activity in shale oil production remains the key factor in putting pressure on oil prices.
The aussie is rising against the US dollar on the background of the greenback’s depreciation. This managed to offset any negative impact from China’s disappointing trade surplus which fell to 28.5 billion dollars in September against the 42.0 billion dollars in August. Remember that China is the major trading partner of Australia so key indicators in China often affect the AUD.
The EUR/USD price is growing rapidly after it was unable to fix below the 1.1825 mark. The next target in case of maintaining the current positive momentum will be 1.1925. Breaking through this level will open the way to 1.2000. In order to change the current ascending trend, quotes need to break through the support at 1.1800. Crossing the zero point by the MACD signal line may be judged as a stimulus for continued growth.
The WTI quotes have rolled back after they were unable to overcome resistance at 51.65. The next target in case of decline will be the psychologically important 50.00 mark. On the other hand, gaining a foothold above 51.65 may become a trigger for the bulls to push the price higher up to 52.80. Volatility is likely to be elevated today.
The AUD/USD demonstrated a confident rising movement and broke through the resistance at 0.7870. This is the basis for maintaining the current positive momentum and immediate goals will be located at 0.8000 and above it. The RSI on the 15-minute chart is in the overbought territory, indicating a possible pullback to 0.7870.