Oil gets hammered

9 March, 2017

Oil markets have shown they are more than capable of large movements but today's movement is the largest we've seen since July and showed that the bears are still very much alive and in control as they took 5% of the price of Oil in one day.  OPEC nations have been cutting production in an effort to boost oil prices to sustainable levels, but at the present rate it would seem the global market as a whole is not consuming enough Oil. US crude inventories shocked the market today showing a strong surplus of 8.21M (1.97M exp), this is at odds with the current market thinking that Oil markets will be bullish in the wake of OPEC. The reality it would seem is that with a mild winter consumption has not been very strong and as a result OPEC nations may be forced to extend cuts in the long term in an effort to bolster prices. The question will be if those OPEC nations have the stomach for further production cuts, as a large number of them are currently struggling as it stands internally.

For Oil traders it's a technical dream as the bears have crushed lower on the back of today's news. Right now oil is trying to claw back some of those losses and the bulls are mounting some resistance on the new daily candle. So far it's come up short and the 100 day moving average looks to be holding back any further momentum. If we do see a further fall lower I would expect to see the 50.0 fib level be the ideal target for traders looking for a strong support level in the market. This also coincides with a key support area around 49.00, so I would anticipate this would be a key holding area and somewhere that the bulls will look to take control of. However, the only minor caveat is that I would expect OPEC to come out swinging if they thought they were losing momentum or to at least add some comments.

Moving across to the US markets and positive economic data continues to be strong for the US economy, with the ADP non-farm payroll change coming in much stronger than expected at 298K (190k exp). This shows there is a large amount of positive sentiment in the market for the economy and labour market will likely be a key driver as Trumps policies come into act. With non-farm payroll due at the end of the week it will be interesting to see if there is a strong correlation.

For the technical aspect of the S&P 500 there is of course the strong channel which has formed in the market and continues to look key for trading. The 20 day moving average continues to act as dynamic support and is currently riding against the bearish channel trend line. Despite the recent fall down to the trend line this could by the market waiting to see regarding Trumps policies, but the bulls will still be out there looking for a chance to strike.

Source link  
USD and Oil in focus

The USD lifted again against all majors, as US retail sales m/m came in strong at 0.5%, in line with expectations. At the same time the previous month was...

Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...

Recession fears rise as trade war heats up

It has been an interesting first half for 2018. Economic fundamentals and politics took center stage as both fought for market influence.

Relentless rout for emerging currencies

While the speed of selling has slowed down compared to the early part of the week, emerging market currencies have continued to show...

Yuan weakness accelerates

Concerns over the possibility of an upcoming trade war are expected to remain front and center of investor focus once again today. Although the trading atmosphere is not quite as negative...

Lira jumps higher on Erdogan victory

All eyes are on the Turkish Lira this morning with the currency rallying sharply in early trade today, following the news that Turkish President Recep Tayyip Erdogan...

Trade war fears ease, but for how long

Global stocks have bounced back to life after China's central bank calmed markets by urging investors to stay calm and rational. While this move by...

Oil slips further ahead of OPEC meeting

Oil markets have suffered another blow today as US oil inventories showed an increase of 2.07M barrels (-2.1M exp), while at the same time US gasoline...

Trade war fears to dominate market

After imposing tariffs on steel and aluminum imports on its closest allies, the U.S. will be facing enormous criticism at the G7 summit on Friday in Quebec...

In the past 24 hours Bitcoin has gained 1.58% and reached $7444.18. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.2329% and is now at $1.1646. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 8.83% and is now at $470.033. Have the most popular cryptocurrencies compared online 24/7.

Top Brokers offering Forex Market Analysis

Forex Currencies Forecasts

Top 10 Forex Brokers 2018

# Broker Review
4FIBO GroupFIBO Group79%