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Global macro overview for 25/07/2017:
Some important and positive conclusions from OPEC and non-OPEC members meeting are in focus of global investors. The Joint OPEC and non-OPEC Ministerial Monitoring Committee (JMMC) had met on Monday in Saint Petersburg to exchange analytical data and forecasts between the participants of the agreement. After the JMMC examined the results of the Joint Technical Committee's (JTC) research into the recovery of the crude oil market's balance, the key conclusions from the meeting were that the global crude oil demand will increase in the second half of 2017 by 2 million barrels per day, which will help drain commercial crude oil reserves. Moreover, JTC concluded, that as of June 2017, members of the OPEC/non-OPEC (unofficially labeled OPEC+) have complied with 98% of the total oil production cut requirement. Nevertheless, according to JTC, despite overall significant efforts to reduce output, results of certain countries could have been better, so a strategy has been developed that will assist producers in reaching 100% compliance. At the end, all OPEC+ members agreed on a possible prolongation of the agreement beyond March 2018 and a possible introduction of additional measures in order to stabilize the markets.
Two countries were driving a special piece of attention, Lybia, and Nigeria, as both of them does not have any limits in oil production and are actively increasing it. However, the JMMC policymakers agreed that the JMMC will supervise the progress of Lybia and Nigeria as one day they both are expected to become active members of OPEC+. The conditions are very simple, they both must stabilize their oil output to OPEC standards.
Let's now take a look at USD/CAD technical picture at the daily timeframe. This pair is very strongly correlated to Crude Oil prices (negative correlation). Currently, the price of USD/CAD is trying to test the muli-month low at the level of 1.2456 while trading in severely oversold market conditions. In a case of a bounce, the nearest technical resistance is seen at the level of 1.2653.
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