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Crude Oil Slips As Inventories Rise
WTI crude oil prices fell over 5% on the day on Thursday. The declines came after the US Energy Information Administration's weekly inventory report. US stockpiles of crude oil rose to the highest levels since July 2017. The US crude oil production grew by 100,000 barrels, rising close to the record levels of 12.3 million.
Oil Needs a Firm Test of 57.50 Support
Oil prices briefly tested the 57.50 level of support on Thursday. But price quickly retraced to pullback modestly on the day. We could expect to see the bounce offering some near term gains. However, the price will need to establish firm support near the 57.50 level. As long as this support holds, WTI crude oil prices could drift sideways with the recently breached support at 60.33 likely to turn to resistance.
Sterling Holds Declines As PM May Stands On Shaky Ground
Developments in the UK related to Brexit saw Prime minister May inching closer to a potential resignation. This follows the latest Brexit plans tabled in the Parliament. The new set of Brexit plans raised more criticism. Lawmakers demanded that May clarifies by today on when she will resign as the Prime Minister.
GBPUSD Bounces Off Lower Support
The currency pair posted a modest rebound as price tested the lows of 1.2606. However, GBPUSD will need to clear the upper resistance as 1.2716 in order to confirm the upside shift in the bias. For the moment, we expect the cable to maintain a sideways range within these levels. Consolidation at the current range could mean that the bias could shift in any direction leading to the next leg of the trend.
Fears Of Trade Wars Pushed Markets To Important Levels
On Wednesday, the United States announced that they were considering sanctions 'like Huawei' for other Chinese companies, the US military sent two ships to the shores of Taiwan. Markets are losing faith in the early conclusion of a trade deal, which provokes a decline in stock markets in Asia and in Europe, and also supports the demand for the dollar.
Stocks
Chinese Heng Seng fell on Thursday morning to 4-month lows, dropping in the morning below the 200-day moving average. The impressive start of stock markets at the beginning of the year turned into an even sharper sale. American indices, in particular, SPX have retained a significant part of their growth since the beginning of the year, decreased by 4.1% since the beginning of the month against 10% of Heng Seng.
EURUSD
The single currency is melting under the pressure of anxiety around trade wars and generally high demand for defensive assets such as the dollar and the Japanese yen. EURUSD pair dropped to 1.1130 in the morning, which is one step away from two-year lows reached in late April. Decline under 1.1100 is able to increase the pressure of sellers due to the triggering of stop orders after taking an important round level.
Chart of the day: Brent
Oil remains under pressure this week. On Wednesday evening, Brent fell below the round level of $70 and the 50-day MA and is trading near $69.50. Among the important next levels, it is worth noting $69 - the 200-day average. The decline below this level in November last year reinforced the sale of oil, which lasted almost two months. In April and June 2017, the intensified decline continued for 1 and 3 weeks, respectively, “washing out” of 10% and 15%, respectively.
Crude Oil Expect 57.35
Pivot (invalidation): 58.80
Our preference Short positions below 58.80 with targets at 58.00 & 57.35 in extension.
Alternative scenario Above 58.80 look for further upside with 59.45 & 60.30 as targets.
Comment Technically the RSI is below its neutrality area at 50.
Silver Spot Intraday Support Around 14.5300
Pivot (invalidation): 14.5300
Our preference Long positions above 14.5300 with targets at 14.6400 & 14.7100 in extension.
Alternative scenario Below 14.5300 look for further downside with 14.4800 & 14.4000 as targets.
Comment The RSI is mixed to bullish.
Gold Spot The Bias Remains Bullish
Pivot (invalidation): 1280.00
Our preference Long positions above 1280.00 with targets at 1287.00 & 1291.00 in extension.
Alternative scenario Below 1280.00 look for further downside with 1277.00 & 1274.50 as targets.
Comment The RSI has just landed on its neutrality area at 50% and is turning up.
S&P 500 The Downside Prevails
Pivot (invalidation): 2837.00
Our preference Short positions below 2837.00 with targets at 2802.00 & 2791.00 in extension.
Alternative scenario Above 2837.00 look for further upside with 2851.50 & 2868.50 as targets.
Comment The RSI is mixed to bearish.
DAX The Downside Prevails
Pivot (invalidation): 12030.00
Our preference Short positions below 12030.00 with targets at 11845.00 & 11800.00 in extension.
Alternative scenario Above 12030.00 look for further upside with 12095.00 & 12170.00 as targets.
Comment The break below 12030.00 is a negative signal that has opened a path to 11845.00.
USD/TRY Aim @ 6.1650
Pivot (invalidation): 6.0900
Our preference Long positions above 6.0900 with targets at 6.1450 & 6.1650 in extension.
Alternative scenario Below 6.0900 look for further downside with 6.0650 & 6.0420 as targets.
Comment The RSI lacks downward momentum.
AUD/USD Caution
Pivot (invalidation): 0.6880
Our preference Long positions above 0.6880 with targets at 0.6905 & 0.6925 in extension.
Alternative scenario Below 0.6880 look for further downside with 0.6865 & 0.6850 as targets.
Comment A support base at 0.6880 has formed and has allowed for a temporary stabilisation.
