Keep short in WTI until USD44.20 breakoutAfter breaking the USD44,20 the likelihood of falls to USD41.80 and USD39.70 it is the most likely scenario. But if the price breaks the USD44.20 upward, it could advance to USD47.50 and USD50 .
WTI-OIL
MACRO VEIW: WTI OIL UPDATE: THE RANGE NARROWSWTI Oil continues to trade within the tightening range that we covered earlier, with recent attempt to break above it failed - price is back at the mean.
Since our previous overview the range tightened down to 48.5-42, making the potential break from it even more powerful, as the longer the price sits within it, the more energy it has for a potential move away from the mean...
MACRO VIEW: USDRUB UPDATE: INTO THE LATERAL RANGEUSDRUB has finally managed to end its upward trend, started the begining of June 2015
The price level has shifted - before uptrend USDRUB was trading about 55, now it is trading north of 60.
The end of the uptrend was marked by the price falling below quarterly mean and within 1st standard deviation from 1-year mean.
Thus currently the pair is range-bound, with the range borders are as marked on the chart. For further developments one should closely monitor WTI Oil (related idea), as the Ruble is closely correlated to it.
MACRO VIEW: WTI OIL SEVERE COMPRESSION: EXPLOSIVE MOVE AHEADIt is a very interesting and highly explosive situation now on WTI OIL market
Price has been trending laterally since the start of September, causing volatility on quarterly basis to contract unusually tight (measured by 1.25 standard deviations from quarterly (66 day) mean)
It means that when price eventually breaks from the 1st standard deviation, a move in that direction will have a lot of energy to release - in other words, it will be a significant and very possibly a sharp move.
At this point from a technical point of view it is impossible to tell which direction it will break, but what will help us is to monitor the compressing range, marked by the same 1st standard deviations from quarterly mean.
A breakdown below 42 will hint us about downward direction and a breakout above 52 - about upward direction of the high-potential move.
MACRO VIEW: USDRUB TRIES TO BREAK UPTREND AGAINUSDRUB attempts 2nd time to break its quarterly downtrend, started back in June by breaking below the 1st standard deviation from quarterly mean (66-days)
However only the tag of the mean itself (now at 61.05) will declare the end of the uptrend
MACRO VIEW: USDRUB HOLDS UPTREND TEST DESPITE OILUSDRUB held uptrend test on 1-year and quarterly basis (bounced back from 1st standard deviations from 1-year (264 days) and quarterly (66 days) means).
What is strange, Russian Ruble continues to fall despite downtrend in WTI oil has failed recently. (see related)
If price continues to trend upwards (above 66) - likely target is 80, a level outlined by Russian Central Bank today as the price at which it will raise interest rates again.
Failure of USDRUB uptrend will be confirmed only when price tags quarterly mean (at 60 now)
USDCAD Pauses as Crude Gains Over 20 Percent from LowsThe USDCAD pauses as crude gains over 20 percent from the recent lows, while having the best three-day gain in nearly 30 years.
Upward momentum in crude prices will help the Canadian dollar rebound slightly, but the fundamentals still remain bearish. In all reality, $47 per barrel will not rid the bearish fundamentals within the energy space.
While keeping it all in perspective, the pop in crude prices is due to a series of headline factors as crude traded near levels not seen since the financial crisis.
First, the Energy Information Administration (EIA) reported that U.S. crude production declined in July. Falling a to a mere 9.3 million barrels, production is roughly 300,000 barrels from the peak. For the first half of 2015, an average of 9.4 million barrels were produced. That's not that optimistic.
There was also a headline suggesting that OPEC may have a meeting with producers to determine a "fair" price for crude.
What do I expect?
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Speculators try to front-run such events hoping to ride the momentum. These momentum pops tend to be self-sustaining as traders begin to cover their levered-shorts.
The market saw the same thing earlier in the year only to engage in another "transitory" breakdown.
The USDCAD is up big, and price action will likely test the consolidation channel, which will act as the first line of support. If price action closes underneath it, look for the pair to test support at 1.3090/1.31.
The speculative ride could last near-term, where the 200-4H EMA would be a great downside target. The 4H +/- DMI is showing a possible bearish convergence that would further suggest more downside.
Key resistance levels will act as upside target is crude begins to unwind, considering that USDCAD does not completely unravel. Minor trend support looks to be broken, and bulls will have to attempt to get back over that hump.
MACRO VIEW: USDRUB IS TESTING ITS UPTREND!Following WTI OIL downtrend failure last Friday, USDRUB tagging its relevant uptrend border first time since it started its descend back in July, marked by lower 1st standard deviation from quarterly (66-day) mean (@65).
If the price manages to break below the border, chances are the uptrend is over (or at least current leg of it).
Full stop of the uptrend, however, can only be declared when the price trades above the quarterly mean (@59).
MACRO VIEW: MORE EURUSD UPSIDE IS PROBABLEEURUSD has broken above 1st standard deviation from quarterly mean (66 days) amid expanding volatility (measured by 3.2 standard deviations from quarterly mean)
Upside probability is apparent, and the closes target is 1 year mean (264 days) at 1.1685. Move is confirmed when price breaks above relevant highs (1.1485)
Stop level is quarterly mean (at 1.1085)
However one should watch out for oil trend. If WTI oil keeps falling, EUR is likely to follow (as happened back in 2014 autumn)
USOIL possible buy set up.if trade WTI, this could be a really good trade.
as you can see we have a falling wedge. macd is showing divergence right in the period of the wedge and also since 20 days ago.
price could keep making the wedge. so if price break up side, i will be buying oil.
if this trade goes good, put break even when price just go through 48.5. and took half of your trade. i would like to see 50$.
what do you think about? like i f you are agree.
10 YEAR TREASURY YIELD SIGNALLING INFLATION EXPECTATIONSSince mid-summer 2014 the 10-Year Treasury Yield started correlating with WTI Crude Oil, which can be seen on the image below:
The correlation was established as a result of dynamics of oil prices, when falling oil was perceived as a risk to inflation. Expectations of lower inflation have driven the 10-Year Yield down with the WTI Oil. Market has perceived the situation correctly, as the CPI inflation has fallen down to about 0% on y/y basis consequently, where it stands now.
Recently, however, the 10-Year Yield started to diverge from WTI Oil price dynamics. As can be seen on our chart, the oil is trading laterally in the range of 57-62 USD per barrel since May 2015. The 10-Year Yield, on the other hand, actually started to move upwards since then, along the upper 1-st standard deviation from its quarterly (66-day) moving average.
Our idea is that current upwards dynamics of the 10-Year Yield in relation to lateral WTI Oil reflects positive inflation expectations of market participants. It means that in the observable future the CPI and PPI inflation measures are likely to start bottoming out on y/y basis.
If our proposition is true, it will be a positive development in terms of financial markets, as higher inflation expectations will offset the deflationary impact of current slow CPI and PPI inflation measures on the perceptions of market participants.
$USOIL (WTI): Update SetupTo see our analysis:
(Click and Play it)
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USDCAD & OIL boxed. ROC forming wedge. Breakout within monthUSDCAD & OIL are both boxed between support and resistance levels. By looking at the wedge being formed by ROC, a breakout is imminent by the end of May.
WTI Near "Support" While Sentiment Still To The DownsideWTI has played out fundamentally, and the fundamentals (along with sentiment) still remain to the downside. Traders love to pick out bottoms by catching falling knifes, and they're usually cut up in the process.
On a risk:reward basis, sure WTI may seem like it's at a nice area to buy. Yet, I think it is still to early. Crude will likely find support at the longer-dated support in the low $43's per barrel. While I would suggest opening fresh shorts without a pullback, it still may be early to gobble crude futures.
The implications are still apparent. Supplies are still gluttonous, and shale companies are hurting. WBH Energy has become the first casualty of the oil warfare. I expect more to come, particularly Cheniere (idea to come).
I have been short since $74, and I wouldn't suggest serious upside unless $53.5 is retaken.
Timing the next buy opportunity on oil marketsI've seen a lot of people looking at oil's long-term trendline for a speculative buy opportunity this past couple of weeks. While oil prices should remain relatively low as markets work to establish a demand-supply equilibrium in 2015, I agree with the hypothesis of at least a technical bounce once WTI and Brent prices test their trendlines (around $47 for WTI and $53/54 for Brent). To complement all those excellent charts shared by others on this site, I'd simply like to point out the long-term support on the Oil/Gold ratio. It seems like WTI will test it's trend-line when this ratio hits its 1993/1998/2009 lows.
