U.S. stocks were relatively mixed on Tuesday as investors focused on China’s activities. The Dow Jones index fell more than 200 points while the Nasdaq 100 rose 24 points. Some of the biggest laggards were Chinese companies like Full Truck Alliance, DiDi and Alibaba. Their share prices declined sharply after China intensified its crackdown on firms. It has already ordered DiDi not to add new customers in the country. It also ordered companies like Apple and Google to remove their apps from the app stores. Analysts see this as a way to limit the country of companies listed in the United States.
The price of oil rose to a six-year high when investors considered the divisions of OPEC + members. It then declined, with Brent and West Texas Intermediate (WTI) falling to $ 74.40 and $ 73.38 respectively. This price action is largely because the cartel disagreed on whether to gradually increase production or maintain the status quo. The United Arab Emirates (UAE) rejected most of the proposals, which members voted on Friday. They demanded to add 400k barrels per day to the market from August to December. Investors expect more volatility as divisions between UAE and Saudi Arabia grow. The price will react to the API weekly inventories set up for later today.
The U.S. dollar changed little in the overnight session as investors waited for Fed minutes from the previous meeting. The minutes should give investors more details on what happened during the meeting. They have left interest rates unchanged and hinted that they will march them in 2023. The currency is also reacting to the latest non-manufacturing PMI data released yesterday. The number of the Institute of Supply Management (ISM) decreased from 64 to 60.1 while the Markit figure entered 63.7. These numbers show that the sector is doing relatively well. Elsewhere, the key numbers to watch today will be the UK’s Halifax house index, data on German industrial production and the Canadian PMI number.
The EURUSD pair is trading at 1.1823, where it has been in the past few days. The pair is trading at 1.1823, which is slightly above yesterday’s low of 1.11800. On the four-hour hour, the pair is below the 25-day moving average and between the lower and middle lines of the Bollinger Bands. The pair also formed an inverse cup and handle pattern, meaning it could continue to fall as bears target the next key support at 1.1750.
The AUDUSD pair rose to 0.7597 on Tuesday following RBA’s latest interest rate decision. It then sharply decreased to the current level by 0.7488. The pair moved below the middle line of the Bollinger Bands while the signal and main line of the MACD moved below the neutral line. The cash flow index has also declined to the current level of 35. Therefore, the pair is likely to remain in the current range today.
Brent oil sharply declined in the overnight session. It moved from a six-year high of 78.42 to a low of 74.8. It has also moved below the rising trend line, which is shown in red. This line connects the lowest levels since May. The commodity channel index (CCI) also declined below the oversold level while the MACD declined below the neutral level. Therefore, the pair may fall as bears target the next key support at 73.