Trading WTI and Brent spread on Iran war – Interest rates in focus [Video]

In today’s Market Outlook, let’s take a look at Forex Trading on EUR/AUD, Gold, XAU/USD, WTI, and Brent Crude Oil.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

We spoke last time about the price difference between WTI and Brent Crude, as it went from $119 per barrel for both, which is very rare when both are the same price.

Last week the spread returned to about $5, which is normal, to $7 today.

The difference is obvious as WTI Crude Oil is not threatened by supply issues, as Brent Crude is usually more affected by global factors, including the danger in the Strait of Hormuz.

So, how can we as traders take advantage?

Tomorrow, we have a US Crude Oil Inventory report.

If inventories are lower than expected, we may see an increase in the price of WTI, hence a lower spread, or if we see a number higher, the spread may widen with a lower WTI price.

However, the big news in the global oil market is in the Strait of Hormuz.

If tensions ease, we will see prices falling and vice versa if tensions escalate.

From a technical point of view, price action on both WTI and Brent is trending higher and at the lower trend line.

The stochastic oscillator is oversold and thinking about turning up, but this is a fundamental trade, not a technical trade, so be careful.

If we move out to the daily charts and add MACD Histogram, the bullish sentiment is obvious.

Many large funds are looking at buying the dip on gold, and that dip equates to $5,000 according to interviews.

We are there now, and we see price action in a falling wedge, which is often a bullish sign.

For you Fibonacci fans, we see the $5,000 price almost exactly at the 50% retracement, and the 38.2% level as support.

As forecast, the Reserve Bank of Australia increased interest rates this morning, and we got a lot of whipsaw.

Keep an eye out for a stronger AUD where we have a pullback against the trend, like here on EURAUD, but watch your technicals.

Besides Australia, we have an incredible lineup of interest rate decisions this week, including the Bank of Canada, the US Federal Reserve, the Bank of Japan, the Swiss National Bank, the Bank of England, and the European Central Bank.

In each case, no change is predicted, but under the circumstances of global geopolitical tension and political chaos in Washington, we may get some surprises.

As I always recommend, watch the press conferences afterwards to get clues on future moves.