Edge Forex

Tag: oil

  • 4 Global Market Updates- 3 August, 2022

    4 Global Market Updates- 3 August, 2022

    In this article, we have covered the highlights of global market news about the Crude Oil Price, GBP/USD, USD/CAD and EUR/USD.
    Crude Oil Futures: More consolidation is on the way

    According to CME Group advanced prints, open interest in crude oil futures markets fell by roughly 8.2K on Tuesday after three consecutive daily gains. Following two daily increases in a row, volume fell by roughly 108.7K contracts.

    On Tuesday, the WTI recorded an indecisive session amid declining open interest and volume, indicating the persistence of the range-bound theme in the very near term. So far, the commodity has been supported by a price of $90.00 per barrel.

    GBP/USD is now consolidating – UOB

    “We said yesterday that ‘the quick climb looks to be continuing, although there is headroom for GBP to get above 1.2300 before the possibility of a retreat increases.’ We were not expecting such a steep and quick decrease to 1.2158. (high has been 1.2279). The pound is losing ground and might fall below 1.2100. For the time being, the next support level at 1.2040 is not likely to be challenged. The resistance level is 1.2195, followed by 1.2225.”

    “The pound fell rapidly to a low of 1.2158 yesterday.” While our strong support’ at 1.2135 remains in place, the upward impetus has faded. In other words, the GBP surge that began late last week has abruptly ended. GBP looks to have entered a consolidation phase and is expected to trade around the 1.2040/1.2255 area for the time being.”

    USD/CAD bears test 1.2850 as oil prices surge ahead of the OPEC meeting, with attention focused on US data and Taiwan.

    USD/CAD accepts offers to repeat the intraday low around 1.2850 ahead of the European session on Wednesday. The Loonie pair gained ground over the past two days before backtracking from its weekly high of 1.2891. On the other hand, the retreat movements are influenced by the lately higher prices of Canada’s principal export commodity, WTI crude oil. The US dollar’s fall amid cautious optimism ahead of crucial US data also keeps USD/CAD prices high.

    oil

    Nonetheless, WTI crude oil prices broke a two-day downtrend, rising 0.63 percent intraday near $93.75, amid growing expectations of no significant change in oil producers’ policy during today’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, known as OPEC+.

    EUR/USD maintains its consolidative tone – UOB

    “We underlined yesterday that ‘upward momentum is starting to develop, but it remains to be seen whether EUR can breach the significant barrier above 1.0300.” As the EUR dropped quickly from 1.0293, the key barrier of 1.0300 remained intact (the low was 1.0162). The quick decline may continue, although it is unlikely to breach the key support around 1.0100. (there is another support at 1.0130). A break of 1.0210 (minor resistance is at 1.0195) on the upside would signal that the present bearish pressure has decreased.”

    “We emphasized yesterday that the risk for the EUR is turning to the upside, but EUR must first cross 1.0300 before a prolonged increase is conceivable.” EUR failed to break beyond 1.0300, falling quickly from 1.0293. The surge in upward momentum faded shortly. The price activity suggests that the EUR is consolidating and will likely trade between 1.0100 and 1.0260. The EUR must break through the main support level of 1.0100 before conceiving a significant drop.”

    Please click here for the Market News Updates from 2 Aug, 2022.

  • Crude Oil Soars to New Heights 

    Crude Oil Soars to New Heights 

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    • Crude oil prices rise as supply and demand variables clash;
    • Supply concerns persist as OPEC+ fails to produce; and 
    • Energy demand rises as the northern winter approaches. Will WTI continue to rise? 
    • Crude oil extended its gains from last week in Asian trade on Monday. With storms building in the northern hemisphere, geopolitical worries, supply limits, and option hedging all in play, the energy commodity looks to have few options for the time being. 
    • Tensions near the Ukraine-Russia border continue to grow as Moscow sends additional troops to the region. A dispute in this region threatens European energy sources and has heightened global oil supply concerns.
    • The Pentagon has declassified a number of military intelligence records revealing the development of armaments. They have also alluded to a misinformation campaign within Ukraine that they claim was sponsored by Russia. 
    • In recent weeks, a number of analysts and journalists have predicted that oil prices will rise over $100 per barrel. With OPEC+ failing to deliver on its recent output hikes in full, their projections are approaching. 
    • OPEC+ is expected to meet on Wednesday to discuss output objectives. 
    • Above $90 bbl, option underwriters may begin to hedge their risk. According to Bloomberg statistics, the number of calls issued substantially outnumbers the number of puts over $90 bbl.
    • As the price of oil rises, more people will buy it. Once the price has passed through certain criteria and the options have been hedged, if the price falls, the hedging of these options will cause those same purchasers to sell. This might raise the price much more.

    Crude oil technical analysis

    On Friday, WTI crude oil reached its highest level since October 2014. 

    The upward movement has bumped up against the Bollinger Band based on the 21-day simple moving average (SMA), but it has been unable to close outside of the upper band. This might imply that the market is satisfied with the rate of change in the rally. 

    On the upside, resistance might be found at the most recent prior high of 88.84. 

    The 10-day simple moving average (SMA) is trading slightly above a previous pivot point at 85.90, suggesting that it may provide support. 

    Previous lows and pivot points of 81.90, 79.33, 77.44, 74.96, 74.76, and 73.34 may also be useful.

  • Forex Trading News -November 23, 2021

    Trading the JPY

    The Bank of Japan is heavily bearish. With Japan battling with deflationary pressures for years and a huge QE program. The Bank of Japan’s prognosis remains bleak.

    The fact that the Bank of Japan is projected to keep interest rates on hold while the rest of the globe is expected to raise rates has lately resulted in some heavy selling from asset managers and leveraged funds.

    With the BoJ so pessimistic, rate differentials between the Japanese 10y and the US 10y are normally only seen in the ebbs and flows of the US 10 y. Keep in mind that the Bank of Japan has yield curve control over its bond yields. So, here’s what you need to know:

    A dropping US 10-year yield equals a rising JPY. And a rising US 10-year yield equals a dropping JPY. 

    This correlation is not always ideal because it may ebb and flow, but it is something to keep in mind while trading the JPY, particularly the USDJPY. Take a look at the USDJPY chart below to see how it relates to the US10y. 

    Rising oil prices are negative for the JPY because higher-priced petroleum draws JPY out of Japan. Japan imports the majority of its oil from other countries. And a weak Yen will make those imports more expensive. If oil begins to rise in price, keep an eye on it since this might weaken the JPY.

    Eurostoxx

    Eurostoxx futures are down 0.7% in early European trade, early deals had softer tones.

    German DAX futures are down 0.6 percent; UK FTSE futures are down 0.4 percent. And Spanish IBEX futures are down 0.5 percent. This comes after a more modest performance yesterday, all before US markets took a knock as rates rose in response to Powell’s re-election as Fed chair, so there is some catching up to do ahead of the open today. 

    So far, the mood music isn’t as gloomy as European futures predict, but the risk is still slightly on the cautious side. As we seek to get things rolling, the S&P 500 futures are down 0.1 percent, the Nasdaq futures are down 0.2 percent, and the Dow futures are down 0.1 percent.

    Kaisa bondholders 

    According to a source with firsthand knowledge of the situation, certain Kaisa offshore bondholders who did not receive coupon payments this month have contacted investment bank Moelis & Company for advice on how to handle the situation. 

    For context, Kaisa has not paid coupons totaling more than $59 million that were due on November 11 and 12 (both having a 30-day grace period) and is facing another $400 million dollar bond maturity on December 7.

    An earlier Bloomberg article said that an ad hoc group of offshore bondholders had also sought legal counsel from Kirkland & Ellis. 

    As much as Evergrande is a household brand. It is important to remember that other Chinese property developers are also suffering similar challenges, and Kaisa is the business with the greatest offshore debt after Evergrande.

    Germany

    The situation with COVID-19 is “extremely, very serious” in various German states. No steps, including lockdown, can be ruled out. 

    This reflects last Friday’s viewpoint and simply underlines that local authorities are obviously being stretched to their limits in attempting to get a handle on the newest COVID-19 crisis.

    EUR/USD is approaching 1.1200, while USD/JPY is threatening to break over 115.00. The latter, in particular, is worth watching since it highlights the technical potential for the greenback and maybe yen pairings (if the mood is right) in the coming weeks. 

    jpy

    Looking at other markets, gold’s drop on Powell’s re-election is a significant setback to the recent technical breakthrough, but it was not unexpected. 

    The important daily moving averages around $1,792-93 are a place to monitor, although gold may drop down around $1,750 before any buying interest emerges.

    Aside from that, oil is one that one needs to continue to keep an eye on, and all this discussion of a coordinated SPR release, , is simply begging for a ‘buy the dips’ or ‘buy the fact’ play – even though there may be a kneejerk reaction lower initially.