First, a climb in oil prices on Monday needs to be discussed. Yesterday Brent rose in price by 3%, exceeding the $64 dollars per barrel level. This is the first time these levels were reached since 2015. There were enough news releases that served as a factor for oil prices to increase, but the key news was that there was a purge in Saudi Arabia's elite. Two crown princes were killed under different circumstances while being arrested.
Today Brent has been trading near the upper border of an ascending diapason, at the $64 per barrel level. For oil to keep on climbing, the drivers must be strong enough, however there are no such drivers, that is why we expect at least a consolidation near the current levels in the nearest future.
As a significant event, today we are expecting an OPEC press conference, during which a world oil outlook will be presented, and the US Energy Department will present its short-term projections.
On Friday, a rapid decrease in the Russian currency looked extreme, even considering that the ruble's quotes were affected by a strengthening dollar and taking into account the statement made by the Ministry of Finance that within the period from November 8 to December 6 it will purchase a total of 122.8 billion rubles worth of foreign currency on the internal market.
At the beginning of the next week, the situation is likely to stabilize, the volatility may also decrease again, not without the support from oil which keeps on rising. Today inflation data will be released. It is forecast that it will decrease to 2.8% year-on-year. In case the forecast meets the expectations, it will be a favourable signal for the ruble.
From a technical perspective, the USD/RUB currency pair is in an ascending channel, therefore a scenario of growth is most likely for now. The nearest resistance is at 59. Meanwhile, if prices go below 58, a consolidation at the 58.5-57 range will continue. The technical scenario of EUR/RUB remains the same. Its quotes will keep trading in a sideways trend at 68.5-67.2.
On Friday, US labour market data were released. It is worth noting that certain figures did not meet the experts' expectations, for example, nonfarm payrolls rose less than it was expected, yet an increase in general was not bad. Along with that, the unemployment rate keeps decreasing and is now at 4.1%, however US average hourly earnings last month showed no dynamics. This indicator primarily affects inflation.
Due to the above, the Dollar Index is attempting to keep on rising. It reached the 95-point mark again. Now we expect an increase with a target at 96. The indices today have hit historical records, S&P500 is being traded above 2585. Note that this year American indices have reached their historical highs 26 times.
Not an insignificant role, by the way, is attributed to positive reports on American issuers.
Among statistical releases, a report on EU retail sales is a notable event. They increased by 3.7% year-on-year.
The data had a weak effect on the euro/dollar pair, which is not surprising. The euro is still losing to the dollar by key factors, including monetary policy, and by technical analysis. The EUR/USD pair went beyond the 1.157 level, the previous local low. Within the corridor, the currency pair has the potential to continue its decrease into the 1.15 area, the lower border of the channel.
Ivan Kapustyanskiy, equity analyst at Forex Optimum