20 May 2019, OctaFX – The Australian dollar jumped today after a surprise election victory by the conservatives. The Prime Minister’s party defied polls to win more than 77 seats in Parliament. In response to the election, Labor Party leader Bill Shorten resigned. Conservatives won because the campaign focused on boosting the country’s economy while Labor focused on climate change. The country holds elections every three years but because of infighting, no Prime Minister has served a full term since 2007.
The price of crude oil rose sharply after OPEC indicated that it will maintain current supply cuts. In a statement, the Saudi Energy Minister, Khalid al-Falih said that there was a consensus among OPEC members to reduce supply gently. The same statement was repeated by the United Arab Emirates energy minister. In response to this, Brent and West Texas Intermediate (WTI) rose by 1.3% during the Asian session. In addition, investors reacted to a Trump tweet on Iran. The tweet said that a conflict would be the ‘official end’ of Iran. Saudi said that it would respond to Iran provocations with ‘all strength’.
The Japanese yen declined against the USD even after better-than-expected economic numbers. In the first quarter, the economy expanded by 2.1%, which was better than the expected contraction of -0.2%. On a QoQ basis, the economy grew by 0.5%. The GDP price index rose by 0.2% in line with expectations. In the quarter, the GDP external demand rose by 0.4%, which was higher than the expected growth of 0.3%. The capital expenditure declined by -0.3%, topping the expected decline of -1.7%.
Will EURUSD price continue to decline?
The EURUSD pair declined to an intraday low of 1.1150, which was the lowest level since May 3. On the hourly chart below, this price is below the 25-day and 50-day moving averages. The 14-day RSI declined to almost the oversold level, while the price is along the lower line of the Bollinger Bands. Today, with no major economic data expected, there is a likelihood that the price will continue to decline, with the target being 1.1100.
USDJPY rises to 110.30
The USDJPY pair rose today after Japanese economic numbers. The pair rose to a high of 110.30, which is above the 50-day and 25-day moving averages. On the hourly chart, the price was close to the 50% Fibonacci Retracement level. The RSI has remained close to the overbought level of 70. Therefore, there is a likelihood that the pair will continue moving higher to test the next support of 110.66.
Brent crude rises sharply
The price of Brent crude rose sharply to Friday’s highs of $72.65. On the chart below, this price is above the 25-day and 50-day moving averages while the average directional index has risen to almost 30. The commodities channel index remained close to the overbought level. Today, the pair could continue rising as investors pay attention to Iran and OPEC.
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