Oil holds near Nov. 2014 highs, eyes bull flag breakout

WTI crude oil is trading at $71/barrel, i.e. just short of recent 3.5-year high of $71.88
Eyes a bull flag breakout, could clock fresh 3.5-year highs above $71.88.

Omkar Godbole FXStreet Contributor

Currently, US oil is flat-lined around $71/barrel, having recovered from the low of $70.20 yesterday on the back of the bullish OPEC report.

The cartel revised higher its forecast for global oil demand growth this year by 25,000 barrels per day - a bullish development for oil markets. However, the cartel also revised higher the non-OPEC supply forecast by 10,000 barrels per day, which does not come as a surprise given the rising US oil output. Hence, oil remains bid and on the hunt for fresh 3.5-year highs.

Further, the possibility of reduced exports from Iran after renewed US sanctions is also keeping oil close to Nov. 2014 highs and the technical chart also shows a bull flag setup - a bullish continuation pattern.

WTI Oil Technical Outlook

A bull flag breakout would open the doors to $71.88 (recent highs). A violation there would expose resistance lined up at $74.93 (October 2011 low). On the downside, support is seen at $70.11 (Ascending 10-day MA), $69.56 (April 2018 high).

Chart source: Netstation, Netdania

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 stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold drops further; focus remains on $4,250

Gold adds to Monday’s pessimism and revisits the $4,260 region per troy ounce on Tuesday. The yellow metal’s extra weakness follows another positive day in the US Dollar, mixed US Treasury yields and steady pre-Fed caution.

Dogecoin clings to EMA support as recovery lacks conviction

Dogecoin (DOGE) hovers around $0.083 at the time of writing on Tuesday after finding support around the key support zone the previous day. Quiet institutional demand, along with mixed derivatives positioning, suggests fading interest in the dog-themed meme coin.

Markets slide as FOMC approaches

The US Dollar remains strong as markets turn increasingly cautious ahead of the FOMC. Stocks are tumbling, while Gold and Silver are moving lower under pressure from the stronger Dollar. The Japanese Yen is weaker again, while Crypto is correcting. BTC is approaching a key technical test and could fall below its 50-week moving average, while ETH remains above $2,405.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.