Get started

Capitalmarkets

Oil market remains vulnerable There is rising volatility in the oil market, with Brent plunged from daily highs around $64.60 to $62.50 and finished around the $63 handle on Wednesday. It looks like traders remain at a loss due to a number of conflicting signals and drivers in the industry. Today, the futures are trading with a modest bullish bias but downside risks persist. The Energy Information Administration on Wednesday reported that US crude supplies fell by nearly 11 million barrels for the week ended July 19, which was in line with API estimate and more than double the 4.5 million-barrel decline expected by traders. Moreover, domestic oil production fell by 700K barrels to 11.3 million barrels last week. However, the bullish numbers were a result of the Hurricane Barry which caused major distortions in the data. As such, after the initial euphoria, traders switched to profit-taking and sent the prices lower. Also, the market came under pressure following the reports that Saudi Arabia and Kuwait look to resume oil production in the so called Neutral Zone, which could bring additional supply around 500K barrels per day. This signal adds to worries about global oversupply, especially amid the lingering concerns over a weaker demand due to a slowing global economy. In the short-term, Brent may follow other riskier assets, which in turn will be influenced by the upcoming ECB meeting. Should the central bank’s tone come too pessimistic, oil futures could come under additional pressure.
TVC:UKOIL
by HelenRush
EURUSD: downside risks persist EURUSD dived to nearly two-month lows around 1.1140 on Wednesday, as the selling pressure intensified after a break below the 1.12 support that capped the sellers since mid-June. A widespread dollar demand was one of the key drivers behind the reversal, with rising trading tensions add to the pressure. On Tuesday, the EU trade chief said that the European Union will retaliate with extra duties on $39 billion worth of US goods if Washington imposes punitive tariffs on EU cars. The rising threat of escalation in the EU-US trade tensions is a bearish signal for the common currency as additional barrier could hurt the regional economy which is already showing more signs of slowing. Additionally, the euro demand abated as the ECB meeting looms, with investors bet on a dovish tone from Draghi who may prepare the markets for delivering additional stimulus in September. By the way, some traders expect the central bank to cut rates during the upcoming meeting already. On the other hand, should the ECB rhetoric prove not as soft as expected, the euro may see a bounce towards 1.12 and higher. In the short-term, downside risks persist.
by HelenRush
Oil market at a loss Crude oil prices failed to show a sustainable recovery on Monday and has been trading with a modest bullish bias on Tuesday. Brent has settled marginally above the $63 handle and remains vulnerable to losses as the bulls remain on the sidelines amid conflicting signals in the market. Brent is now torn between geopolitics and worries over oversupply. On the one hand, the futures are supported by the lingering Persian Gulf tensions after Tehran's seizure of a British-flagged oil tanker. On the other hand, signs of rising non-OPEC oil production continue to limit price gains, especially amid the slowing global growth, threatening demand. In the short term, oil prices could get hit by the updated IMF World Economic Outlook should the fund slash global growth forecasts further. As such, Brent will hardly be able to recover above $64 any time soon, while the risk of a break below $62 persists. Later in the day, the API will release its weekly inventories report, which is followed by the official assessment from the EIA on Wednesday. Should the figures come bullish, the market could derive a local support from the fresh data.
TVC:UKOIL
by HelenRush
EURUSD shifts focus to ECB decision EURUSD dropped dramatically on Friday and remains marginally above the 1.12 handle today, trying to show a bullish bias as dollar demand looks subdued after the recent rally. Volatility in the market remains elevated amid conflicting signals from the Federal Reserve officials ahead of the crucial meeting later this month. Now, traders shift focus to the ECB meeting due on Thursday. Ahead of this event, the euro will pay attention to the Eurozone confidence data, with weak numbers may reinforce expectations for a rate cut by the European monetary authorities. However, even a dovish rhetoric will likely be enough to put the euro under pressure at this stage as the common currency looks vulnerable after the odds of an aggressive Fed rate cut dropped. Technically, the pair needs to hold above the 1.12 support in order to avoid a more robust sell-off, with the immediate meaningful resistance comes around the 100-DMA at 1.1250. Should the downside risks persist, the 1.12 handle could be challenged later this week. In this scenario, the euro will target 1.1180 first, where mid-June lows lie.
by HelenRush
Gold derives support from the Fed The dollar was hit dramatically overnight, after comments from NY Federal Reserve President John Williams who hinted that lower rates and more aggressive cuts could come soon. Despite the later NY Fed attempts to temper the remarks, the greenback remained under pressure and trimmed loses only partially. Against this backdrop, gold prices jumped to six-year highs marginally below $1,453 during the early session on Friday. Since then, the bullion retreated and turned negative on the day, trying to hold above $1,435. Despite the overbought conditions, the precious metal still has upside potential as major central banks are signaling a shift to a softer monetary policy. Besides, market participants continue to express concerns over further escalation in the US-China trade war despite the recent reports that the two countries have resumed the negotiations. In these circumstances, the yellow metal will likely stay elevated in the meantime, with the $1,450 level is in market focus now. A decisive break above this threshold will pave the way to fresh long-term highs.
TVC:GOLD
by HelenRush
EURUSD lacks bullish drivers EURUSD extends the recovery after a steep decline earlier this week, with the price is nearing the intermediate resistance in the 1.1250 area on Thursday. The upside momentum was fueled by dollar weakness as the US currency shifted to a corrective mode after the recent rally due to strong economic data. Overnight, US dollar index nursed losses versus main competitors including the euro a Treasury yields continued to slid amid trade woes and mixed earning results. By the way, trade stand-off between the US and China make traders bet on a more aggressive Fed rate cut again, which puts the dollar under additional pressure. On the other hand, the common currency lacks its own upside drivers, therefore, the bullish impetus in the EURUSD pair remains limited. Moreover, ECB is also hinting at additional stimulus down the road, citing economic and trade uncertainty. As such, the euro will unlikely challenge the 1.13 barrier any time soon, unless the greenback comes under a strong bearish pressure. At the same time, the 1.12 support could be derailed once again should the aggressive Fed rate cut bets start to ebb.
by HelenRush
Easing geopolitical risks dump oil prices Brent crude plunged over 3% on Tuesday, with prices slipped back from $67 to the local lows below $64. Today, the futures are making shallow recovery attempts but the impetus is subdued and downside risks persist. The driver behind the sell-off was Trump who raised hopes of easing tensions with Iran and pointed to a potential progress with US - Iranian relations in the Middle East. Moreover, Secretary of State Mike Pompeo said Iranians were willing to negotiate their missile program. Against this backdrop, traders rushed to price out the geopolitical premium in the market, which resulted in a sharp retreat in oil prices. The additional downside pressure came from Trump’s threat of new tariffs on China, which rekindled fears about demand. Besides, the API revealed bleak inventory data which curbed expectations ahead of the official EIA data due later today. At this stage, Brent will hardly be able to stage a sustainable recovery as traders continue to fear further progress in relations between Washington and Tehran.
OANDA:BCOUSD
by HelenRush
Gold struggles to regain the bullish momentum Gold prices failed to extend the upside move yesterday and continue to struggle on Tuesday, with the bullion holds below the $1,420 area for a third day in a row. USD demand has picked up slightly after a negative start of the week, which caps the upside potential in prices. Markets are still focused on the upcoming rate cut by the Federal Reserve and expectations of easing monetary policy in the US help the precious metal to hold above $1,400. In this context, traders will closely monitor further incoming US economic data. Today, the US retail sales report could affect USD dynamics and thus push gold prices in either direction. Strong figures will ease concerns over a more aggressive easing and may give the additional lift to the greenback. In this scenario, the bullion will remain under the local pressure and could get closer to the $1,400 handle. On the upside, the yellow metal needs to see a decisive break above $1,420 in order to challenge last week’s highs around $1,427. In the short-term, risks are skewed to the downside.
TVC:GOLD
by HelenRush
1
Oil market: oversupply concerns weigh Brent crude remains stuck between the 100- and 200-DMAs on Monday, with futures struggle to get back above the $67 handle after marginal gains late last week. The market remains in limbo against the backdrop of some contradictory factors. Some pressure comes amid reports that tropical storm Barry weakened to a “depression”, which means that there won’t be long-lasting disruptions in US energy infrastructure. So now, traders have to price out major decline in oil production in the US Gulf of Mexico. Also, oversupply concerns increased after the EIA and OPEC reports pointed to slower demand growth and further rise in non- OPEC production in 2020. Besides, fresh Chinese data revealed the slowest quarterly economic growth in at least 27 years. The report reinforced worries about demand in the world’s largest oil-consuming country. Against this backdrop, considering lack of news from Iran, Brent will likely remain under some pressure in the short term, while the potential bullish attempts will be limited. The immediate resistance comes around $67. A clear break above this barrier could partially ease the downside pressure.
TVC:UKOIL
by HelenRush
Oil struggles to regain upside impetusOil prices continue to attract sellers on bullish attempts. After a brief jump above $65, Brent finished below $64 on Monday. Today, the futures are trying to get back above this level but the impetus remains subdued, in part due to a stronger dollar. The US currency extends the ascent since the release of strong jobs data as traders now expect the Fed will deliver a modest rate cut later this month. On the geopolitical front, tensions between the US and Iran persist. Over the weekend, Iran announced it had begun enriching uranium past the previous limit of 3.67%. The level of enrichment then surpassed 4.5% on Monday. Trump has issued a warning to Iran after the country moved to increase uranium enrichment beyond the purity threshold. All this could lead to new sanctions against Tehran and fuel worries about supply disruptions. This in turn may support oil prices down the road. Technically, Brent needs to challenge the $64.50 area and target the $65 threshold once again so that the downside pressure to ease. In the short term, market will focus on stockpiles data from the US as well as signals from the Federal Reserve. The FOMC meeting minutes is due on Wednesday.
O
by HelenRush
EURUSD shifts focus to Powell, FOMC minutes EURUSD has settled in a limited trading range after an aggressive sell-off on Friday, with strong US NFP employment data sent the greenback higher across the board. As a result, the euro broke down of its consolidative trading range and registered over two-week lows marginally above 1.12. Despite spectacular employment data, Fed Fund futures continue to reflect a 100% probability for a 25bp rate cut later this month, which should cap the local downside pressure on the common currency. In this context, the upcoming Fed Chair Powell’s testimony and the release of the FOMC monetary policy meeting minutes will be in focus this week. Should the central bank confirm its dovish shift, citing economic risks and the lingering US-China trade tensions, the pair could gain amid a broad-based dollar weakness. Technically, EURUSD stays below the key hourly moving averages, which is a short-term bearish sign. In the daily charts, the pair needs to get back above the 100-DMA around 1.1260 in order to target the 1.13 barrier once again. A break below the 1.12 support will lead to increasing selling pressure on the pair.
by HelenRush
Gold remains steady Gold prices have partially retreated from long-term highs but remain steady in general, as a number of factors are driving flows into the precious metal. The bullion is trading marginally lower for a third day in a row, staying above $1,400 after a major one-day rally earlier this week. The yellow metal registered six-year highs ten days ago, with the prices are rising for a seventh week in a row. The steady recovery from lows below $1,270 may continue at least in the near term as risk sentiment remains unstable. Despite the US and China agreed to resume trade talks, investors doubt that the two countries will be able to strike a deal any time soon. Besides, tensions between the US and Iran persist. Also, gold is getting more attractive to investors amid expectations of a more dovish approach to monetary policy by global central banks. In this context, the US NFP employment report due later today will be important both for the greenback and gold prices. Disappointing figures could put the USD under pressure and drive the bullion higher. But considering extremely weak results for May, there could be a decent recovery in employment, which could trigger some profit-taking with the initial target at $1,407.
TVC:GOLD
by HelenRush
2
The yen could gain further USDJPY has been trading mostly on the defensive this week, with the dollar struggles to regain the upside momentum as risk sentiment remains unstable amid the contradictory signals. The pair registered one-week lows around 107.50 yesterday and remains below 108.00 in a muted trading on Thursday. The Japanese yen derives support from lingering worries about the slowing global growth despite the major central banks have softened their tone, signaling their readiness to prop up the economy. Also, the declining US Treasury yields, the threat of fresh US tariffs on European goods, as well as doubts in the US-Chinese trade settlement add to the appeal of the safe-haven yen. Moreover, the downside pressure on the pair could intensify by the end of the week should tomorrow’s US jobs report disappoint. Weak numbers will inevitably fuel expectations of a rate cut by the Fed, which will hurt the greenback across the board. In this scenario, USDJPY will extend the slide with the initial target at 107.00 after derailing the 107.50 support.
by HelenRush
Gold shows resilience Gold prices resumed the rally after a short period of a bearish correction. The bullion showed resilience despite heightened volatility, as the retreat was limited by the $1,380 area, where the metal has attracted demand and got back to six-year highs. The recent events surrounding the G20 summit and resuming the dialog between the US and China fueled risk appetite, which made the safe-haven gold give up some gains. But despite the overbought conditions, the precious metal managed to recover above the $1,400 psychological level. On Wednesday, the rally has stalled just shy of recent long-term highs around $1,439. AS investor optimism over the US-China trade truce continues to wane, gold prices could at least stay elevated in the short term, especially considering the persistent Trump’s protectionist policy as the US President threatens new tariffs on EU goods. Against this backdrop, the yellow metal will likely remain bullish in general, though there is a risk of a correction in the near term as gold looks attractive for profit-taking at current levels.
TVC:GOLD
by HelenRush
Oil prices struggle to regain positive momentum Crude oil prices failed to stage a sustainable rally on Monday as Brent attracted an aggressive profit-taking above $66.50 and now tries to cling to the $65 level as traders continue to express concerns over the slowing global growth after disappointing manufacturing PMIs in major countries. Market participants were not inspired by OPEC decision to extend the deal by nine months, in part due to the fact that prolongation was mainly prices in already. Meanwhile, further signs of slowing global growth are fueling fears of weakening global demand for oil. The additional bearish pressure comes from the US, where shale oil producers continue to expand their activity. Technically, Brent needs to hold above $65 in order to avoid another retreat to $64.60 and then $64.20 on the way to $64. On the upside, the immediate resistance comes around $66. Once above this barrier, the short-term downside risks will partially abate.
TVC:UKOIL
by HelenRush
EURUSD gives up previous gains EURUSD pair resumed the downside move after finishing the week unchanged on Friday. The pair slipped through the 200-DMA and registered ten-day lows marginally above the 1.13 handle which represents the immediate support now. The euro is under pressure due to a widespread dollar demand after Trump and Xi agreed to resume trade talks. Cease-fire in the US-China trade war means less risks for the economy and thus a lower probability of aggressive rate cuts by the Federal Reserve. By the way, Fed funds futures now point to roughly 15% odds of a 50 bps rate cut in July, which is down from 25% prior to the Trump-Xi meeting. Against this backdrop, the common currency will likely remain under the selling pressure in the short term but the downside potential looks limited as markets continue to expect a rate cut in the US, while some doubts in a substantial progress towards a deal between the US and China will cap the dollar’s positive performance. Technically, EURUSD needs to hold above 1.13 and get back above the 200-DMA to trim intraday losses.
by HelenRush
EURUSD awaits the summit and economic data After some intraday fluctuations, EURUSD was little changed in the end of the day on Thursday. Bullish attempts continue to attract sellers, which prevents the euro from breaking the 1.14 barrier. On the other hand, the pair remains above the 200-DMA, which is a positive technical signal, at least in the short term. Market attention now shifts to the G20 summit in Japan, where the key point of focus will be meeting between US President Donald Trump and his counterpart Xi Jinping. The contradictory comments from this front make investors doubt in any progress between the two world’s largest economies. But the two leaders could at least lay the groundwork for resuming the trade talks, which could be positive for riskier assets including the euro. Traders will also eye the US data including producer price index, personal income and spending, Michigan consumer confidence index. The pair will also react to the upcoming euro zone CPI report. Should the figures from the US disappoint, EURUSD could challenge the 1.14 handle once again but news from the summit will be in market focus.
by HelenRush
USDJPY extends recovery from lows USDJPY is gaining bullish traction for the second consecutive session on Thursday, extending the recovery from multi-month lows registered below 107.00 last week. The yen’s safe-haven appeal turned sour amid optimism over the widely expected trade talks between the US and China this weekend. The greenback regained positive momentum ahead of the final US Q1 report due later today. Traders hope that the data will come on the strong side and thus will reduce the possibility of a rate hike by the Federal Reserve. The additional downside pressure on the yen came from the Bank of Japan as Wakatabe said the central bank won’t hesitate to add stimulus if momentum towards price goal is lost. In a wider picture, however, USDJPY remains under pressure and could resume the downside move should risk aversion resume in the short term. Technically, the pair needs to have a clear break above the 108.15 resistance in order to target 108.30 and then 108.50. On the downside, the immediate support comes as 107.60.
by HelenRush
Oil prices extend gains ahead of G20 summit Brent crude refreshed June highs around $65.43 on Wednesday and tries to settle above the $65 handle as the G20 summit looms. Risk sentiment has deteriorated somehow after comments from Fed’s Powell and Bullard were not as dovish as expected. But this is overshadowed by lingering tensions between the US and Iran, fueling concerns over possible supply disruptions. The market derives additional support from the API data. The report showed crude oil inventories in the US declined by 7.5 million barrels last week, while traders expected a draw by 2.5 million. Should the official EIA data confirm positive numbers, the futures could cement positions above the mentioned psychological level. In a wider picture, oil bulls hope for a positive outcome of the upcoming G20 summit, where US President Trump is scheduled to meet with China President Xi Jinping. Also, traders will expect comments from Russian President Vladimir Putin and Saudi Arabia Crown Prince Mohammad bin Salman on the sidelines of the summit. Their statements on OPEC+ deal could have a strong impact on crude prices.
TVC:UKOIL
by HelenRush
EURUSD rally may accelerate further The EURUSD pair extends the ascent on Tuesday, hovering around fresh three-month highs above the 1.14 handle. The euro is rising for a fifth day in a row, with the main bullish driver is a broad-based weakness in the greenback. Despite the pair starts to show some overbought conditions, the common currency could refresh local highs in the short term as Powell could confirm its dovish tone in today’s statement. In this case, traders will continue to price in a rate cut by the Federal Reserve and to exit USD longs, accumulated earlier. Besides, the additional upside pressure on the single currency may come from potentially weak US data including consumer confidence. If so, EURUSD will target 1.1425. But another bullish breakthrough will only be confirmed on a daily close above 1.14. Anyway, both fundamental and technical picture continues to point at euro strength, at least in the short term.
by HelenRush
Gold prices cling to six-year highs Gold prices extend the rally on Monday, with the bullion is trying to get back above the $1,400 psychological level, clinging to six-year highs registered at the end of last week. This is the fifth day of gains in a row as demand for the precious metal remains robust due to rising tensions between the US and Iran, a dovish shift by major central banks, and a widespread weakness in the greenback. During the weekend, Trump announced fresh sanctions against Tehran and said he was not seeking war with Iran after a senior Iranian military official warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of US troops. Should Washington impose additional sanctions, tensions could rise further, which will boost the safe-haven demand for gold. On the other hand, there is a risk for gold from the upcoming G20 summit in Japan. The US and China leaders are expected to meet on the sidelines of the summit and any positive news from this front may fuel risk-on sentiment and thus decrease the appeal of the bullion later this week. Besides, there are some signs that prices are entering the overbought conditions, which could add to the potential downside pressure. Should a bearish correction take place, the immediate meaningful support comes at $1,380.
TVC:GOLD
by HelenRush
Oil follows the sentiment the stock markets Brent has refreshed June highs early around $64.30 early on Friday but failed to extend gains and got back below the $64 handle, clinging to the opening levels. In the weekly charts, the futures remain in the positive territory, largely due to yesterday’s rally amid euphoria in the financial markets. Today, the risk sentiment shows signs of abating after the aggressive rally. Weak Japanese manufacturing PMI fueled fresh concerns over global growth and capped the bullish attempts in the riskier assets including oil market. The PMI dropped further below the 50.0 threshold, to 49.5 from 49.8, while new orders were at the lowest level in three years. On the other hand, the market is still supported by geopolitical developments in the Middle East and softer stance on monetary policy by major central banks. A widespread downside pressure on the greenback also plays into Brent’s hands now. At this stage, the $64 level is in focus. A daily and weekly close above this barrier will brighten the short-term technical outlook. The immediate support now comes around $63.20 and then at $63.
OANDA:BCOUSD
by HelenRush
After FOMC, focus turns to Bank of England After the Fed confirmed its dovish shift yesterday, the Bank of England has a so-called Super Thursday today. The pound is rising for a third day in a row, challenging the 1.27 level ahead of the key event. The main driver behind the bullish tone in the pair is dollar weakness due to a softer Federal Reserve rhetoric and better risk sentiment amid positive signals from the US-China trade front. The Bank of England is widely expected to keep interest rates on hold. At the same time, despite the lingering uncertainty over Brexit, the central bank could indicate a possible increase later this year, citing wages that are growing at the fastest pace in a decade and inflation expectations that have risen substantially. On the other hand, after dovishness from Draghi and Powell, Carney will hardly express a clear hawkish tone amid a threat of a global recession. Nevertheless, GBPUSD could extend gains after the meeting in contrast to the obviously softer tone from the two other major central banks. As such, the cable may rise to the 1.2765 area, a break of which will open the way to 1.28. The uncertainty around Brexit could cap the pair’s bullishness.
by HelenRush