Crude Oil Price Range to be Tested Today
November 6th, 2009 Posted in Crude Oil
Name: Russell Glaser
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For the first time in two weeks, Crude Oil prices closed yesterday above $80 and the Dow Jones Industrial Average finished above 10,000. The Dollar weakened after the decision by a slew of European central banks to hold interest rates steady. Today crude oil traders will be focusing on the key U.S. Non Farm Payrolls release and its affect the report has on the EUR/USD rate.
Both Britain and the EU held their interest rates steady, while the former decided to extend its quantitative easing program. The central banks signaled their reluctance to raise interest rates, thus inferring their economies have room to grow before inflation begins to rise; a positive for crude oil.
These events helped the EUR/USD to finish higher yesterday with the pair closing at 1.4873, up from 1.4841. As the dollar declines, the tendency is for crude oil to rise. This was the case yesterday as crude oil rose to a high of $80.52 from an opening price of $79.77.
For the past 3 days, crude oil has range traded between $79.50 and $81. Today’s Non Farm Payrolls may influence the commodity to break out of its trading range if the report comes in above estimates. Economists have predicated the report to show a loss of 173K jobs for the month of October. This would be 90K fewer job losses than the month of September. If the report comes in better than expected, we may see crude oil break the $81 mark. If the job losses are higher than forecasted, crude oil may fall below $80 again, perhaps to $78.75 mark.
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Tags: Commodities, Crude Oil, Crude Oil trading, dollar, Forex Trading
