Brent oil consolidates near $70 after two-day rally

Brent oil is trading around $70 in Asia amid heightened US-Iran tensions and supply disruptions in Russia.
Prices rallied 1.11% and 1.84% in the previous two trading days, but key resistance at $73.38 is still intact.

Omkar Godbole FXStreet Contributor

Brent oil is currently trading just above $70 per barrel, representing little change on the day.

Prices rallied 1.11% on Monday as escalating tensions between US and Iran triggered fears of supply disruptions. On Friday, Washington announced that it will deploy more troops in the middle east, sending the black gold higher vey 1.84%.

The bid tone also strengthened on reports that Russia’s oil production dropped in May as shipments via the Druzhba pipeline to Europe were found to be contaminated in April.

The two-day rally, however, seems to have stalled near $70. Supply reductions by OPEC, escalating US-Iran tensions and drop in Russia’s oil output indicate the path of least resistance for Brent is to the higher side.

Even so, oil may remain under pressure if other riskier assets post losses on trade tensions.

Technically speaking, a break above $73.38 is needed to invalidate the negative bias put forward by the previous week’s bearish outside reversal candle.

Pivot levels

1. R3 70.4
2. R2 69.53
3. R1 69.07
PP 68.2
1. S1 67.74
2. S2 66.87
3. S3 66.41

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold falls as Fed rate hike bets lift US Dollar to two-month high

Gold trades on the back foot on Wednesday as expectations of further Federal Reserve interest rate hikes lift the US Dollar and weigh on the non-yielding metal. At the time of writing, XAU/USD trades around $4,315, down 1.0% on the day.

Crypto Today: Bitcoin and Ethereum consolidate gains as XRP extends breakout

Bitcoin (BTC) is moderating on Wednesday, trading near $86,000 as the crypto market broadly consolidates. Ethereum (ETH) mirrors BTC’s stable outlook, holding above $2,700. Ripple (XRP), meanwhile, edges higher for the sixth consecutive day, currently sitting above $1.61 as bulls tighten their grip.

S&P Global PMIs expected to show resilient US economic growth in September

S&P Global will release on Wednesday its preliminary September Purchasing Managers' Indices (PMIs) for the United States, based on surveys of top private sector executives, to provide an early indication of economic momentum. The data is expected to highlight US economic resilience.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.