Oil Surged, Dollar Weakened on July 6

What you need to know on Tuesday:

Oil has surged as OPEC+ members failed to make a deal. The worsening fight between Saudi Arabia and the United Arab Emirates blocked an increase in oil output. As a result, XBR/USD (Brent oil) has surged above $77.00 and XTI/USD (WTI oil) has surpassed $76.00 for the first time since 2018.
The Reserve Bank of Australia announced a slower pace of asset purchases but added that interest rates are unlikely to rise before 2024. AUD/USD jumped.
The New Zealand dollar surged after an optimistic business survey as the positive economic data should push the Reserve Bank of New Zealand to hike rates earlier than expected. Markets are priced for the central bank to hike rates to 1% by the end of 2022. NZD/USD rocketed above the high of June 17 at 0.7100.
The British pound rose after the UK Prime Minister claimed his plans to lift social-distancing restrictions from July 19.

Technical outlook

EUR/USD has surged above the 50-period moving average and edging higher to the psychological mark of 1.1900. It may struggle to cross this resistance level on the first try, that’s why we can expect a short pullback to the 1.1880 support before the further rally up. When the pair crosses 1.1900, the way up to the next resistance zone of 1.1940-1.1950 will be clear.

Gold (XAU/USD) has broken above the psychological mark of $1800. It’s likely to reach the 38.2% Fibonacci retracement level of $1815. If it breaks above it, it will jump to the key resistance zone of $1830-1833, which will be hard to break on the first try. Support levels are $1800 and $1790.

Finally, let’s analyze NZD/USD. As mentioned above, the New Zealand dollar surged due to the optimistic business survey. However, if we look at the chart, we would notice that the pair has approached the key level of 0.7100, which it has failed to cross a few times already. Thus, the pair is likely to reverse down from it. Support levels are the lows of late June at 0.7050 and the 50-period moving average of 0.7020.

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usd

eur

gbp

aud - australian dollar

nzd - new zealand dollar

gold

oil

rba - reserve bank of australia

Author: FBS Analyst Team

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