FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

Is the Oil rally built on weak foundations?


7 January 2020

The story defining Oil’s explosive appreciation over the past two days revolves around escalating tensions in the Middle East. WTI Crude and Brent have both gained over 4% since last Friday as the US-Iran faceoff sparked fears over negative supply shocks in the markets. Given how the Middle East is home to major oil-producing countries that supply roughly 25% of the world’s oil, the path of least resistance for Oil points north.

However, geopolitical tensions may not be enough to sustain oil prices in the medium to longer term. The upside is poised to face multiple obstacles in the form of rising US Shale production and weak oil demand growth in the face of renewed US-China trade tensions. Although geopolitical shocks could offer a short-term boost, developments revolving around US-China trade and global growth remain primary driver’s influencing Oil’s outlook.

In regards to the technical picture, WTI Crude is heavily bullish on the daily charts. A daily close above $63 could encourage a close above $63.80 and $64.50. If $63 proves to be an unreliable support level, WTI Crude could decline back towards $62 and $61.40.

Pound rams into 1.3150


The Pound rebounded from its new year hangover, appreciating against every G10 currency amid expectations over the Bank of England leaving interest rates unchanged.

A softer dollar contributed to the Pound’s upside, with the GBPUSD punching above 1.3150 on Monday. Although the Sterling could push higher in the near term, longer-term gains are likely to be capped by fears of a hard Brexit. Technical traders will continue to closely observe how prices react around 1.3150. Sustained weakness below this level should open a path back towards 1.3060 and 1.3000, respectively.

Time for the Yen to claim the throne?


The Yen has depreciated against almost every G10 currency despite geopolitical tensions fueling risk aversion across the board.

Regardless, appetite for the Yen could improve this week if geopolitical risks and trade uncertainty feeds into the risk-off sentiment. Focusing on the technical picture, the USDJPY is under pressure on the daily charts. A solid breakdown below 108.00 should open a path towards 107.50 in the near term.

Commodity spotlight – Gold


Gold appreciated over 3.5% on Monday, smashing through the 2019 high of $1557.11 and hitting levels not seen since 2013 above $1578 thanks to tensions in the Middle East.

The US-Iran faceoff is a geopolitical risk that presents unwelcome levels of uncertainty to the financial markets, with investors rushing to the safety of havens. Although prices are heavily bullish, there could be a retracement back towards $1555 before bulls re-enter the scene. The precious metal should trend higher as long as $1555 proves to be a reliable support.

#source

Share: Tweet this or Share on Facebook


Related

Dollar flat as market braces for central bank decisions later in the week
Dollar flat as market braces for central bank decisions later in the week

The dollar was up modestly in early trading in Europe on Monday, at the start of a key week for central bank meetings on both sides of the Atlantic. By 03:00 ET (08:00 GMT), the dollar index...

30 Jan 2023

Mega Central banks, OPEC, NFP & Earnings week
Mega Central banks, OPEC, NFP & Earnings week

China Stock market returns from Luna New Year break. Chinese stocks rose while most other Asian equities fell as investors looked to interest rate decisions scheduled this week in the US...

30 Jan 2023

XAU/USD remains on the defensive around $1,925 ahead of US PCE
XAU/USD remains on the defensive around $1,925 ahead of US PCE

Gold price remains on the defensive for the second straight day amid modest US Dollar strength. Thursday’s upbeat US macro data fuels hawkish Fed expectations...

27 Jan 2023

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.