Australian Stocks Rise as Trade Optimism Overshadows Weak Trade Data 05/12/19

The Australian dollar declined while Australian stocks rose after the Bureau of Statistics released important trade and retail sales data. The country had a seasonally adjusted trade surplus of more than $4.5 billion in October. This surplus came as exports declined by 5% to $40.7 billion while imports rose to $36 billion. Meanwhile, retail sales remained unchanged in October after rising by 0.2% in September. There were declines in footwear, clothing, and personal accessories. These declines were offset by an increase in cafes, restaurants, and takeaway food services.

AUS200 Technical Analysis

The AUS200 rose to a high of $6680.90. This was higher than the week’s low of $6580.17. The price is above the 14-day and 28-day moving averages while the RSI has moved upwards from a low of 12 to 60. The momentum indicator has moved upwards and is slightly above the 100 level. The index may continue moving upwards to the 50% Fibonacci Retracement level of $6738.

British Pound Soars Ahead of Election

The pound has been rising as the election date nears. The election, which will be held on December 12, comes at a time when there is Brexit fatigue. The country has been in a deadlock throughout the year. Recent polls predict that Boris Johnson and his Conservative party will win the election. This will allow Johnson to push his Brexit deal in Parliament. At the same time, some traders believe that pound sterling has risen too fast and are protecting themselves against a fall in the coming week. One-week risk reversals on the pound-dollar show that traders are the most bearish on sterling since October.

EUR/GBP Technical Analysis

The EUR/GBP pair has been on a sharp downward trend. The pair has declined from a high of 0.9325 in August to a low of 0.8450. The pair is at the lowest it has been in more than two-and-a-half years. The RSI has moved close to the oversold level on the daily chart. The pair is below the 14-day and 28-day moving averages. The signal and main line of the MACD has remained below the neutral line. The pair may continue to decline although a reversal is also possible.

Crude Oil Soars Ahead of OPEC Meeting

The price of crude oil rose as the market waited for the outcome of the annual OPEC meeting in Vienna, Austria. The leaders will meet to deliberate on the current state of the oil market. A report by Bloomberg, later confirmed by Financial Times, said that Saudi Arabia would propose further supply cuts. Saudi has a lot riding on this meeting as the country prepares for the Saudi Aramco IPO. This meeting comes at a time when OPEC has been warned about oversupply by non-OPEC members. The cartel has also been warned about demand constraints in the coming year.

XTI/USD Technical Analysis

The XTI/USD pair rose to a high of 58.59 ahead of the OPEC meeting. It also rose after inventories in the United States declined sharply. The pair eased slightly during the Asian session and is now trading at 59.10. The price is slightly above the 14-day and 28-day moving averages. The signal and main lines of the MACD have made a bearish crossover on the hourly chart. The pair may see some volatility later today.