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OIL Traders React To Oversupply

Oil prices were down approximately 4% yesterday dropping the most in single day for 2019. Oil traders seemed eager to exit their long positions after EIA data on Wednesday indicated a massive stockpile building up. The stockpile indicated by the EIA was figure just below 10 million barrels, while analysts have various opinions to its appearance. From our point of view this could be a reaction from the US towards OPEC’s lowering oil production, which has dropped to a four year low in April 2019. On another front countries supplying Iranian Oil are having a harsh time of replacing it. More specifically sources state China has a shipment of Iranian Oil worth 1 billion USD on one of its ports. However, they are unable to retrieve it due to difficulties brought forward on the payment method, as the US could sanction the Mainland. Oil prices moved lower yesterday breaking below our (R1) 63.10 support line which has now turned to resistance. If the market persists its selling interest for the commodity we may see it drop to below the (S1) 61.55 support level and aim for the 60.30 support line. Below the psychological threshold of 60 USD per barrel, it could be an indication that the market has reversed from bullish to bearish bias. In a bullish scenario we may see WTI surpass (R1) 63.10 resistance level and aim for the (R2) 64.70 resistance level. From there on the next level could be the (R3) 66.60 resistance level.

Major currencies inspection and current status

Positive news from the previous days kept the USD higher. Analysts believe Friday could be a good closing for the greenback with a strong Jobs report expected. The Australian and New Zealand dollars displayed some weakness in the previous days as their central banks prepare for meetings next week with a probability of a rate cut. The EUR moved lower as financial releases yesterday provided a lukewarm economic picture. However the financial releases also indicate the economic activity is the Eurozone is steady. EURUSD dropped lower in the previous session and is currently trading almost exactly on line with our (S1) 1.1175 support level. Reviewing EURUSDs trading activity in the last week of April we can see the currency is somewhat higher at the moment, yet much of the price action could have been affected by the USD strength. If the currency comes under purchasing interest we may see it aim for the (R1) 1.1220 resistance level and even surpass it aiming for the (R2) 1.1260 resistance barrier. If the pair is to be sold we may see it move below the (S1) 1.1175 support level and aim for the (S2) 1.1125 support level.

Other economic highlights, today and early tomorrow

In the European morning, we get from the UK U.K. Services Purchasing Managers Index (PMI) and the Eurozone’s Eurozone Consumer Price Index (CPI) YoY Preliminary both for April. In the European afternoon, we get the US employment report for April. Later on in the US session we get the U.S. ISM Non-Manufacturing Purchasing Managers Index (PMI) for April. As for speakers please note that Chicago Fed President Evans and FOMC Member Clarida Speak.

EUR/USD 1H

Support: 1.1175 (S1), 1.1125 (S2), 1.1075 (S3)
Resistance: 1.1220 (R1), 1.1260 (R2), 1.1300 (R3)

WTICash Daily

Support: 61.55 (S1), 60.30 (S2), 58.50 (S3)
Resistance: 63.10 (R1), 64.70 (R2), 66.60 (R3)

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