In today's Asian trading session, Dollar witnessed a remarkable bounce as concerns over inflation reemerged, driven by a sudden upswing in oil prices. WTI crude oil fleetingly broke the 80 level after Saudi Arabia and other OPEC+ oil producers made an unforeseen announcement on Sunday, revealing additional oil output cuts of around 1.16 million barrels per day. Initially, market participants anticipated OPEC+ to maintain the current 2 million bpd cuts through the end of 2023. However, the updated total of 3.66 million bpd cuts, accounting for 3.7% of global demand, caught many by surprise. In the realm of currency trading, Canadian Dollar is hot on the heels of the greenback, emerging as the second strongest performer for the day so far, followed closely by Australian Dollar. On the flip side, New Zealand Dollar, Yen, and Swiss Franc lag behind as the weakest. As the week unfolds, traders will keep a keen eye on RBA and RBNZ rate decisions, in addition to crucial US economic data, including ISM indexes and non-farm payroll employment figures. From a technical standpoint, the spotlight now falls on 80.82 resistance level in WTI crude oil. Should this level hold, price actions originating from 64.19 will likely maintain a sideways trajectory. A breach of the 55 Day EMA (now at 75.08) could trigger a more significant decline, revisiting the 64.19 low. However, if 80.82 is sustainably surpassed, it could mark the onset of a more substantial bullish trend reversal, potentially fueling a more vigorous rally toward the subsequent resistance level at 94.25. If this scenario unfolds, it could further rekindle anxieties surrounding inflation. |
