The political crisis in Spain does not put pressure on the euro
Despite the continuing tension between Spain and Catalonia, the European currency continues to strengthen its positions against the US dollar. The expected publication of the report of the Federal Reserve System since the last meeting also does not put pressure on euro buyers.
Today, the Prime Minister of Spain has demanded that the leader of Catalonia Carles Puigdemont gave a clearer assessment of his position and answer the question whether he declared the independence of the region or not.
If the Catalan leader takes this step, the Prime Minister of Spain will be fully entitled to deprive the rights of Catalonia some autonomy, which will lead to greater confrontation. This will be done with an based on article 155 of the Spanish Constitution, which allows the government to deprive the regions of certain rights of autonomy in the event of a threat to the interests of Spain.
Statements by the representatives of the Federal Reserve did not affect the prices of the US dollar. Today, the president of the Federal Reserve Bank of Chicago, Charles Evans, draw the focus towards the fundamental indicators of the US economy. In his view, the current situation is good enough to start a discussion about the need to raise interest rates later this year. Evans also noted the improvement in the situation with wages, and expects that the unemployment rate in the US may drop even lower.
As for the technical picture of the EURUSD pair, going beyond resistance 1.1830 had a positive impact on new buyers of risky assets, which led to the further increase of the trading instrument already in the 1.1860 area with the main purpose of reaching 1.1870.
The growth potential of the euro may be limited by the Fed's minutes, which will be published tonight.
Prices of oil fell after the release of the OPEC report, which noted an increase in production levels.
According to the data, the cartel's production in September this year increased to 32.75 million barrels per day. OPEC expects oil demand to grow by 1.5 million barrels per day by 2017 fiscal year, as well as 1.4 million barrels a day in 2018.
The cartel also increased the estimate of the world supply of oil in September to 96.5 million barrels per day. Total oil reserves in OECD countries in August 2017 were 171 million barrels, above the five-year average level.
As for the technical picture of oil, only a breakthrough of the level of 51.30 on the WTI mark can lead to a larger upward movement with a test of the monthly highs around 52.80. If buyers can not get hold of the level of 51 US dollars, a downward correction may lead to the updating of the lower limit of 49.40.
Analysis are provided by InstaForex