Oil rallied amid OPEC countries agreed to cut production for the first time since 2008. The world’s leading oil producer Saudi Arabia accepted to take on the big hit, by agreeing to decrease its output by 0.5 million barrels per day. Iran and Russia also said to cut their production. WTI rallied past $50/barrel. Stronger trend and momentum indicators hint for a further rise toward the $52.00/52.50 mid-term resistance. Intra-day supports are eyed at $48.96 (minor 23.6% retracement on Nov 29th to Dec 1st rise), before the critical $48.22 (major 38.2% retrace).
Commodity currencies were better bid in Asia on the back of firmer oil and commodity prices. The Aussie and the Loonie were among the biggest gainers against the US dollar, following yesterday’s post-ADP sell-off.
The USD/CAD retreated to a three-week low, 1.3356. Further gains in oil should help an extension to 1.3335/1.3300, before 1.3263 (Nov 9th low).
The AUD/USD recovered one third of yesterday’s sell-off. A break above 0.7418/0.7420 (200-hour moving average / major 38.2% retracement on Nov 30th sell-off) should encourage a recovery to 0.7500 handle. The sentiment in the option markets remain mixed in between 0.7500/0.7520.
The US dollar rallied in New York as the stronger-than-expected ADP data hit the headlines. The US economy added 216’000 private jobs in November, versus 161K expected and 119K a month ago. Asian traders sold the ADP-backed US dollar rally, bringing the EUR/USD back to the 1.0605/1.0615 area, including the 50, 100 and 200-hour moving averages. A large 1.0600-put will expire today.
Rising hawkish Federal Reserve (Fed) expectations pushed the ounce of gold below its critical $1170-support (major 61.8% retrace on Dec’15 to Jul’16 rise). The yellow metal extended losses to $1162 and could target a lower base at $1255/1250.
The GBP/USD extended gains to 1.2541. Trend and momentum indicators are gaining an interesting positive traction toward the 1.2585/1.2620 target zone. The short-term support is eyed at 1.2485 (minor 23.6% retracement on Nov 18th to Dec 1st rise), before the critical 1.2450 (major 38.2% retrace). Decent call-options are expected to give a hand to the upside move above 1.2525 at today’s expiry. Put options dominate below the 1.2500-strike.