Daily Market Commentary
EUR/USD Experiences Profit-Taking as Investors Await PMI
The EUR/USD is experiencing profit-taking as investors lock-in some gains. The lack of global economic data provides a great opportunity for profit-taking. We notice profit-taking across the board, from equities to crude to the Yen. Investors won’t receive noteworthy econ data until Wednesday’s rush of EU PMI data grouped with BoE and Fed monetary policy decisions. The Greenback’s broad-based strength is not surprising, and a return to the Dollar is being encouraged by political and economic uncertainty in the U.S. Obama’s popularity is waning as the U.S. President deals with financial and health care reform along with deteriorating conditions in Afghanistan. President Obama’s honeymoon is certainly over, and U.S. citizens want results. Meanwhile, trade disputes with China are brewing in the background, stoking fears of global protectionism. However the central bank meetings and G20 summit provide perfect opportunities to improve psychology. Meanwhile, investors shouldn’t forget that last week’s round of data was impressive, particularly numbers from the U.S. and EU. Therefore, global economic fundamentals continue to strengthen, meaning the longer-term depreciation of the Dollar is still in play. Investors would need surprisingly negative outcomes from the central bank and G20 meetings this week coupled with weak economic data to reverse the positive tide.
Meanwhile, the Euro continues to flex its relative strength due to the combination of positive EU econ data and the ECB’s comparatively hawkish monetary stance. However, the EUR/GBP has been on a tear lately, so further consolidation in this currency cross and slight weakness in the Euro wouldn’t be surprising. We found last week’s EU pricing and export data improved beyond expectations, supporting the ECB’s monetary policy. Wednesday’s PMI data should play an important role in extending the ECB’s philosophy should the data outperform. We’ve readjusted our uptrend lines to compensate for today’s dip. The EUR/USD remains comfortably above 9/15 lows and our new 1st tier uptrend line. We find a recurrent theme across the markets regarding the importance of 9/15 lows. Therefore, investors should keep an eye on 9/15 lows in gold, crude, and the S&P futures. The protection of the EUR/USD’s 9/15 lows and our 1st tier uptrend line could spell the difference between a minor setback and a more protracted decline. The 9/15 lows carry further importance for the EUR/USD since they also represent a retest of the 1.45 psychological level.
Present Price: 1.4644
Resistances: 1.4656, 1.4678, 1.4703, 1.4724, 1.4745
Supports: 1.4627, 1.4609, 1.4590, 1.4568, 1.4551
Psychological: 1.45, 1.50
GBP/USD Fights to Stay Above September Lows
The GBP/USD is battling to stay above previous September lows in order to forgo another negative technical development. Bulls are swooping in and buoying the Pound across the board; notice topside consolidation in the EUR/GBP. Sterling has taken a beating over the past couple sessions after BoE Governor King’s dovish most recent dovish statements finally sank in. However, investors may opt to keep the GBP/USD above September lows and avoid a retest of the highly psychological 1.60 level until we see whether the BoE follows through on King’s dovish contemplations. Meanwhile, there is heightened uncertainty regarding the extent of the BoE’s dovish behavior. Although investors have priced in further liquidity measures, it remains to be seen how aggressive the monetary policy will be. On the other hand, any hesitation or lack of action by the BoE would likely result in a huge rally in the Cable. Britain’s economic data wasn’t so bad last week, employment and pricing data printed in line or above analyst expectations. Therefore, the GBP/USD’s relentless weakness clearly took its cue from King’s psychological monetary shock. Britain won’t be releasing much noteworthy econ data this week, leaving the GBP/USD’s performance up to the BoE’s monetary policy decision, U.S. equities, and the psychological forces surrounding the G20 summit. Hence, investors should pay close attention to the behavior of the S&P futures and their interaction with our 1st tier uptrend line and 9/15 lows should they be tested.
The technical key will be for the Cable to stay above September lows and the highly psychological 1.60 level should the pullback continue. As for the topside, the Cable faces multiple downtrend lines and the 1.65 level becomes a psychological barrier once again. The Cable is skating on thin ice now since we’re running low on uptrend lines. Therefore, this week’s trading could play a large role in determining whether we are witnessing the beginning of a more protracted pullback in the market.
Present Price: 1.6171
Resistances: 1.6181, 1.6202, 1.6225, 1.6238, 1.6258, 1.6288
Supports: 1.6151, 1.6142, 1.6113, 1.6094, 1.6071
Psychological: 1.60, 1.65
USD/JPY Pops and Stalls Beneath 9/9 Highs
The USD/JPY has experienced a nice pop as the Dollar experiences broad-based strength. The lack of economic data is allowing investors to take profits, and in this case snatch up an oversold Yen. The DPJ’s more conservative fiscal approach is worrying investors slightly that the economic recovery taking root may be compromised if stimulus is withdrawn. The psychological uncertainty is giving investors a good reason to buy up a battered USD/JPY. However, nothing has changed fundamentally, and the DPJ’s conservative approach should actually favor a stronger Yen in the long run. Therefore, the USD/JPY’s present strength isn’t convincing enough for us to change our bearish outlook trend-wise. We’ve readjusted our trend lines, and our 3rd and 5th tier downtrend lines appear to be the more significant technical barriers since they run through September and 8/24 highs, respectfully. Meanwhile, we notice technical supports in all of the USD/JPY’s negative correlations. Hence, with Japan on a National Holiday for the next two sessions, investors may wait for Wednesday’s wave of econ data and central bank meetings before making any technically significant decisions.
Japan will join the party Wednesday by releasing its Trade Balance. We believe Japan’s Trade Balance will come in stronger than expected since China’s TEU data continues to grow with the country’s economic recovery running on schedule. Additionally, recent data from the U.S. has been stronger than expected; indicating demand for Japanese exports likely improved since the last time we received Trade Balance data. An outperformance of Japan’s Trade Balance data would likely place further downward pressure on the USD/JPY, corresponding with our expectations for strong EU PMI data and resulting outperformance in the Euro. In all, we maintain our negative outlook trend-wise on the USD/JPY until the currency pair’s aforementioned topside technical barriers are knocked out. As for the downside, our multiple uptrend lines should serve as reliable cushions while the highly psychological 90 level waits in the distance.
Present Price: 92.26
Resistances: 92.51, 92.75, 92.93, 93.16, 93.31
Supports: 92.23, 92.04, 91.84, 91.61, 91.42
Psychological: 90
Gold Sticks Around $1000/oz as Investors Await Wednesday
Gold is holding steady around the highly psychological $1000/oz level; experiencing some weakness on declining volume as investors nibble on an oversold Dollar. However, the precious metal has avoided a retest of September 10th lows thus far, indicating the pullback has been driven by profit-taking following gold’s impressive run to new 2009 highs. We recognize tight resistances and supports, indicating gold should remain within a relatively narrow trading band due to the lack of global economic data. Investors are taking the opportunity to lock-in profits across the board as they await Wednesday’s flood of economic data and central back meetings. We notice similar weakness in the EUR/USD, crude, and the S&P futures. However, all three are holding onto their technical supports, telling us continual consolidation may be in order for gold. After all, the $1000/oz level is highly psychological, and the precious metal will need a large jolt to break free. We have little reason to alter out positive outlook on gold trend-wise. Meanwhile, investors should keep a close eye on the behavior of gold’s correlations for any indication of a substantial technical reversal.
One headline investors should take note of is the IMF’s desire to auction off just over 400 tonnes of its gold reserves. China has taken interest in the offering with the nation seeking to diversify its massive reserve of Dollar-denominated assets. Though the huge sale of IMF gold has not been finalized, such a transaction would represent a large boost in overall supply and reduction in demand, thereby weighing down on price. China recognizes the price impact of such a move, and is requesting a substantial discount should it purchase the IMF’s gold. Investors should monitor the situation closely since it could provide a sudden price shock to gold if the transaction goes through.
Technically speaking, gold’s psychological $1000/oz area should continue to serve as a strong support. Our 2nd tier uptrend line represents an important technical cushion since it runs through September 10th lows. A failure of our 2nd tier could result in a sharp reversal. As for the topside, 9/11 and 9/17 highs serve as technical barriers along with our 3rd tier downtrend line.
Present Price: $999.75/oz
Resistances: $1002.91/oz, $1004.78/oz, $1007.21/oz, $1009.08/oz, $1010.39/oz
Supports: $998.61/oz, $995.06/oz, $993.19/oz, $992.07/oz, $989.08/oz, $987.02/oz
Psychological: $1000/oz, 2009 highs and March 2008 highs
The S&P Futures Hold Steady above 1050 and our 2nd Tier Uptrend Line
The S&P futures are holding strong above our 2nd tier uptrend line and the psychological 1050 level. The futures are under a bit of selling pressure today as the Dollar experiences a broad-based rally. However, as described in our FX analysis, we believe today’s rally in the Greenback is a result of oversold conditions. There are no substantial economic data points on the wire today, and last week’s economic data surpassed expectations for the most part. Hence, there are few reasons to be fundamentally positive on the Dollar or negative on U.S. equities. We expect the S&P’s consolidation to continue until Wednesday’s wave of EU econ data coupled with Fed and BoE meetings. We anticipate the Fed will keep its monetary policy unchanged while providing a rosier outlook on the economy. However, we don’t expect the Fed to make any commitments to the tightening of liquidity since we believe this would be premature. We also expect the EU’s PMI data to come in better than expected (refer to EUR/USD commentary), providing a positive catalyst for the Euro and global equities. On the other hand, the outcome of the BoE meeting is less certain since BoE Governor King remains blatantly dovish in regards to the central bank’s monetary policy. Though investors have already priced in a loosening of monetary policy via a lower deposit rate, uncertainty surrounds whether the BoE will add more funds to its QE package. Any dramatic increase in liquidity could add further downward pressure to the Sterling, and reignite uncertainty concerning the longevity of the global economic recovery. In addition to Wednesday’s action, we also have the G20 meeting to digest. Although there are several potential conflicts which could result from the meeting, we anticipate the G20 will show a united front in battling the economic downturn and global warming. However, any further deterioration in U.S./China trade ties could deliver a blow to the S&P futures.
Altogether, we anticipate this week’s activity should bode well for the S&P futures. There are few reasons either technically nor fundamentally to be negative on U.S. equities. Though the S&P’s medium-term uptrend is intact, we could experience additional immediate-term weakness towards our 1st tier uptrend line. Our 1st tier uptrend line serves as an important technical cushion since it runs through September lows. A failure of our 1st tier uptrend line would likely result in a more protracted selloff, and subsequent retest of the highly psychological 1000 level. Hence, 9/15 lows play an important role in regards to the S&P’s support. We notice a similar theme in the EUR/USD and gold. Hence, investors should pay close attention to the interaction of these to investment vehicles and their respective 9/15 lows. However, the 1st tier is sitting comfortably below present price, giving the S&P futures a little wiggle room between now and Wednesday’s packed session. As for the topside, the S&P must confront previous 2009 highs, the psychological 1075 and 1100 levels, and our 3rd tier downtrend line.
Price: 1059
Resistances: 1061, 1064.5, 1067.25, 1071.25
Supports: 1053.5, 1048.5, 1044, 1038.75
Psychological: 1050, 1075, 1100, 1000
Crude Decline with Broad-Based Dollar Strength
Crude futures are trading back below the highly psychological $70/bbl as investors snap up a beaten down Dollar. The lack of economic data is allowing investors to comfortably cash in some profits ahead of Wednesday’s wave of econ data and central bank meetings. Crude remains within the $68-$72/bbl range established by OPEC. Strong economic data last week failed to send crude beyond our 3rd tier downtrend line and previous 2009 highs. Furthermore, the third large decline in inventories in the past four weeks received limited response from bulls. Therefore, investors are clearly waiting for U.S. equities and the Dollar to make another directional decision. The Dollar is trading at or near important technical resistances and supports across the board. Investors are naturally hesitating at these technical levels, creating a cautiously optimistic environment for crude’s medium-term uptrend line. However, we have little reason to fundamentally shift our near-term positive outlook on the EUR/USD, gold and the S&P futures. Therefore, crude’s medium-term uptrend line is alive and well for the time being. On the other hand, our 1st tier uptrend line represents an important technical cushion since it runs through September lows. A decline below these levels on heightened volume could result in a brisk selloff in Crude. As for the topside, crude faces several technical barriers, including 9/17 and 8/25 highs. Furthermore, we recognize multiple downtrend lines and the psychological $70/bbl and $75/bbl levels bearing down on price. Hence, crude does have quite a few topside challenges at the moment, limiting any immediate-term upward movements in price. Investors should keep a close eye on activity in the Dollar and U.S. equities come Wednesday since volatility should come to life.
Price: $69.30/bbl
Resistances: $69.70/bbl, $70.09/bbl, $70.45/bbl, $70.95/bbl, $71.42/bbl
Supports: $69.11/bbl, $68.51/bbl, $68.05/bbl, $67.78/bbl, $67.47/bbl
Psychological: $70/bbl, $75/bbl
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
EUR/USD Experiences Profit-Taking as Investors Await PMI
The EUR/USD is experiencing profit-taking as investors lock-in some gains. The lack of global economic data provides a great opportunity for profit-taking. We notice profit-taking across the board, from equities to crude to the Yen. Investors won’t receive noteworthy econ data until Wednesday’s rush of EU PMI data grouped with BoE and Fed monetary policy decisions. The Greenback’s broad-based strength is not surprising, and a return to the Dollar is being encouraged by political and economic uncertainty in the U.S. Obama’s popularity is waning as the U.S. President deals with financial and health care reform along with deteriorating conditions in Afghanistan. President Obama’s honeymoon is certainly over, and U.S. citizens want results. Meanwhile, trade disputes with China are brewing in the background, stoking fears of global protectionism. However the central bank meetings and G20 summit provide perfect opportunities to improve psychology. Meanwhile, investors shouldn’t forget that last week’s round of data was impressive, particularly numbers from the U.S. and EU. Therefore, global economic fundamentals continue to strengthen, meaning the longer-term depreciation of the Dollar is still in play. Investors would need surprisingly negative outcomes from the central bank and G20 meetings this week coupled with weak economic data to reverse the positive tide.
Meanwhile, the Euro continues to flex its relative strength due to the combination of positive EU econ data and the ECB’s comparatively hawkish monetary stance. However, the EUR/GBP has been on a tear lately, so further consolidation in this currency cross and slight weakness in the Euro wouldn’t be surprising. We found last week’s EU pricing and export data improved beyond expectations, supporting the ECB’s monetary policy. Wednesday’s PMI data should play an important role in extending the ECB’s philosophy should the data outperform. We’ve readjusted our uptrend lines to compensate for today’s dip. The EUR/USD remains comfortably above 9/15 lows and our new 1st tier uptrend line. We find a recurrent theme across the markets regarding the importance of 9/15 lows. Therefore, investors should keep an eye on 9/15 lows in gold, crude, and the S&P futures. The protection of the EUR/USD’s 9/15 lows and our 1st tier uptrend line could spell the difference between a minor setback and a more protracted decline. The 9/15 lows carry further importance for the EUR/USD since they also represent a retest of the 1.45 psychological level.
Present Price: 1.4644
Resistances: 1.4656, 1.4678, 1.4703, 1.4724, 1.4745
Supports: 1.4627, 1.4609, 1.4590, 1.4568, 1.4551
Psychological: 1.45, 1.50
GBP/USD Fights to Stay Above September Lows
The GBP/USD is battling to stay above previous September lows in order to forgo another negative technical development. Bulls are swooping in and buoying the Pound across the board; notice topside consolidation in the EUR/GBP. Sterling has taken a beating over the past couple sessions after BoE Governor King’s dovish most recent dovish statements finally sank in. However, investors may opt to keep the GBP/USD above September lows and avoid a retest of the highly psychological 1.60 level until we see whether the BoE follows through on King’s dovish contemplations. Meanwhile, there is heightened uncertainty regarding the extent of the BoE’s dovish behavior. Although investors have priced in further liquidity measures, it remains to be seen how aggressive the monetary policy will be. On the other hand, any hesitation or lack of action by the BoE would likely result in a huge rally in the Cable. Britain’s economic data wasn’t so bad last week, employment and pricing data printed in line or above analyst expectations. Therefore, the GBP/USD’s relentless weakness clearly took its cue from King’s psychological monetary shock. Britain won’t be releasing much noteworthy econ data this week, leaving the GBP/USD’s performance up to the BoE’s monetary policy decision, U.S. equities, and the psychological forces surrounding the G20 summit. Hence, investors should pay close attention to the behavior of the S&P futures and their interaction with our 1st tier uptrend line and 9/15 lows should they be tested.
The technical key will be for the Cable to stay above September lows and the highly psychological 1.60 level should the pullback continue. As for the topside, the Cable faces multiple downtrend lines and the 1.65 level becomes a psychological barrier once again. The Cable is skating on thin ice now since we’re running low on uptrend lines. Therefore, this week’s trading could play a large role in determining whether we are witnessing the beginning of a more protracted pullback in the market.
Present Price: 1.6171
Resistances: 1.6181, 1.6202, 1.6225, 1.6238, 1.6258, 1.6288
Supports: 1.6151, 1.6142, 1.6113, 1.6094, 1.6071
Psychological: 1.60, 1.65
USD/JPY Pops and Stalls Beneath 9/9 Highs
The USD/JPY has experienced a nice pop as the Dollar experiences broad-based strength. The lack of economic data is allowing investors to take profits, and in this case snatch up an oversold Yen. The DPJ’s more conservative fiscal approach is worrying investors slightly that the economic recovery taking root may be compromised if stimulus is withdrawn. The psychological uncertainty is giving investors a good reason to buy up a battered USD/JPY. However, nothing has changed fundamentally, and the DPJ’s conservative approach should actually favor a stronger Yen in the long run. Therefore, the USD/JPY’s present strength isn’t convincing enough for us to change our bearish outlook trend-wise. We’ve readjusted our trend lines, and our 3rd and 5th tier downtrend lines appear to be the more significant technical barriers since they run through September and 8/24 highs, respectfully. Meanwhile, we notice technical supports in all of the USD/JPY’s negative correlations. Hence, with Japan on a National Holiday for the next two sessions, investors may wait for Wednesday’s wave of econ data and central bank meetings before making any technically significant decisions.
Japan will join the party Wednesday by releasing its Trade Balance. We believe Japan’s Trade Balance will come in stronger than expected since China’s TEU data continues to grow with the country’s economic recovery running on schedule. Additionally, recent data from the U.S. has been stronger than expected; indicating demand for Japanese exports likely improved since the last time we received Trade Balance data. An outperformance of Japan’s Trade Balance data would likely place further downward pressure on the USD/JPY, corresponding with our expectations for strong EU PMI data and resulting outperformance in the Euro. In all, we maintain our negative outlook trend-wise on the USD/JPY until the currency pair’s aforementioned topside technical barriers are knocked out. As for the downside, our multiple uptrend lines should serve as reliable cushions while the highly psychological 90 level waits in the distance.
Present Price: 92.26
Resistances: 92.51, 92.75, 92.93, 93.16, 93.31
Supports: 92.23, 92.04, 91.84, 91.61, 91.42
Psychological: 90
Gold Sticks Around $1000/oz as Investors Await Wednesday
Gold is holding steady around the highly psychological $1000/oz level; experiencing some weakness on declining volume as investors nibble on an oversold Dollar. However, the precious metal has avoided a retest of September 10th lows thus far, indicating the pullback has been driven by profit-taking following gold’s impressive run to new 2009 highs. We recognize tight resistances and supports, indicating gold should remain within a relatively narrow trading band due to the lack of global economic data. Investors are taking the opportunity to lock-in profits across the board as they await Wednesday’s flood of economic data and central back meetings. We notice similar weakness in the EUR/USD, crude, and the S&P futures. However, all three are holding onto their technical supports, telling us continual consolidation may be in order for gold. After all, the $1000/oz level is highly psychological, and the precious metal will need a large jolt to break free. We have little reason to alter out positive outlook on gold trend-wise. Meanwhile, investors should keep a close eye on the behavior of gold’s correlations for any indication of a substantial technical reversal.
One headline investors should take note of is the IMF’s desire to auction off just over 400 tonnes of its gold reserves. China has taken interest in the offering with the nation seeking to diversify its massive reserve of Dollar-denominated assets. Though the huge sale of IMF gold has not been finalized, such a transaction would represent a large boost in overall supply and reduction in demand, thereby weighing down on price. China recognizes the price impact of such a move, and is requesting a substantial discount should it purchase the IMF’s gold. Investors should monitor the situation closely since it could provide a sudden price shock to gold if the transaction goes through.
Technically speaking, gold’s psychological $1000/oz area should continue to serve as a strong support. Our 2nd tier uptrend line represents an important technical cushion since it runs through September 10th lows. A failure of our 2nd tier could result in a sharp reversal. As for the topside, 9/11 and 9/17 highs serve as technical barriers along with our 3rd tier downtrend line.
Present Price: $999.75/oz
Resistances: $1002.91/oz, $1004.78/oz, $1007.21/oz, $1009.08/oz, $1010.39/oz
Supports: $998.61/oz, $995.06/oz, $993.19/oz, $992.07/oz, $989.08/oz, $987.02/oz
Psychological: $1000/oz, 2009 highs and March 2008 highs
The S&P Futures Hold Steady above 1050 and our 2nd Tier Uptrend Line
The S&P futures are holding strong above our 2nd tier uptrend line and the psychological 1050 level. The futures are under a bit of selling pressure today as the Dollar experiences a broad-based rally. However, as described in our FX analysis, we believe today’s rally in the Greenback is a result of oversold conditions. There are no substantial economic data points on the wire today, and last week’s economic data surpassed expectations for the most part. Hence, there are few reasons to be fundamentally positive on the Dollar or negative on U.S. equities. We expect the S&P’s consolidation to continue until Wednesday’s wave of EU econ data coupled with Fed and BoE meetings. We anticipate the Fed will keep its monetary policy unchanged while providing a rosier outlook on the economy. However, we don’t expect the Fed to make any commitments to the tightening of liquidity since we believe this would be premature. We also expect the EU’s PMI data to come in better than expected (refer to EUR/USD commentary), providing a positive catalyst for the Euro and global equities. On the other hand, the outcome of the BoE meeting is less certain since BoE Governor King remains blatantly dovish in regards to the central bank’s monetary policy. Though investors have already priced in a loosening of monetary policy via a lower deposit rate, uncertainty surrounds whether the BoE will add more funds to its QE package. Any dramatic increase in liquidity could add further downward pressure to the Sterling, and reignite uncertainty concerning the longevity of the global economic recovery. In addition to Wednesday’s action, we also have the G20 meeting to digest. Although there are several potential conflicts which could result from the meeting, we anticipate the G20 will show a united front in battling the economic downturn and global warming. However, any further deterioration in U.S./China trade ties could deliver a blow to the S&P futures.
Altogether, we anticipate this week’s activity should bode well for the S&P futures. There are few reasons either technically nor fundamentally to be negative on U.S. equities. Though the S&P’s medium-term uptrend is intact, we could experience additional immediate-term weakness towards our 1st tier uptrend line. Our 1st tier uptrend line serves as an important technical cushion since it runs through September lows. A failure of our 1st tier uptrend line would likely result in a more protracted selloff, and subsequent retest of the highly psychological 1000 level. Hence, 9/15 lows play an important role in regards to the S&P’s support. We notice a similar theme in the EUR/USD and gold. Hence, investors should pay close attention to the interaction of these to investment vehicles and their respective 9/15 lows. However, the 1st tier is sitting comfortably below present price, giving the S&P futures a little wiggle room between now and Wednesday’s packed session. As for the topside, the S&P must confront previous 2009 highs, the psychological 1075 and 1100 levels, and our 3rd tier downtrend line.
Price: 1059
Resistances: 1061, 1064.5, 1067.25, 1071.25
Supports: 1053.5, 1048.5, 1044, 1038.75
Psychological: 1050, 1075, 1100, 1000
Crude Decline with Broad-Based Dollar Strength
Crude futures are trading back below the highly psychological $70/bbl as investors snap up a beaten down Dollar. The lack of economic data is allowing investors to comfortably cash in some profits ahead of Wednesday’s wave of econ data and central bank meetings. Crude remains within the $68-$72/bbl range established by OPEC. Strong economic data last week failed to send crude beyond our 3rd tier downtrend line and previous 2009 highs. Furthermore, the third large decline in inventories in the past four weeks received limited response from bulls. Therefore, investors are clearly waiting for U.S. equities and the Dollar to make another directional decision. The Dollar is trading at or near important technical resistances and supports across the board. Investors are naturally hesitating at these technical levels, creating a cautiously optimistic environment for crude’s medium-term uptrend line. However, we have little reason to fundamentally shift our near-term positive outlook on the EUR/USD, gold and the S&P futures. Therefore, crude’s medium-term uptrend line is alive and well for the time being. On the other hand, our 1st tier uptrend line represents an important technical cushion since it runs through September lows. A decline below these levels on heightened volume could result in a brisk selloff in Crude. As for the topside, crude faces several technical barriers, including 9/17 and 8/25 highs. Furthermore, we recognize multiple downtrend lines and the psychological $70/bbl and $75/bbl levels bearing down on price. Hence, crude does have quite a few topside challenges at the moment, limiting any immediate-term upward movements in price. Investors should keep a close eye on activity in the Dollar and U.S. equities come Wednesday since volatility should come to life.
Price: $69.30/bbl
Resistances: $69.70/bbl, $70.09/bbl, $70.45/bbl, $70.95/bbl, $71.42/bbl
Supports: $69.11/bbl, $68.51/bbl, $68.05/bbl, $67.78/bbl, $67.47/bbl
Psychological: $70/bbl, $75/bbl
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
