Gold Bugs Affirm their Grip; US 10-yr Treasury Yields Pose a Threat

Gold prices, at the time this report was drafted, traded around the $1,870 per ounce price level having gained 1.7% on Wednesday.

That was the biggest single-day percentage gain sighted in the precious metal’s market in two weeks.

In the past few days, gold bugs held their grip on the precious market, as the dollar recorded significant losses in its value for about three straight trading sessions. Gold bears seem to have lost their nerves in facing Janet Yellen’s, expansive approach to fiscal policy.

Although the, US 10-yr Treasury yields were looking unchanged, news that the new U.S Secretary for Treasury will “go big” on pushing for more stimulus programs, excited gold traders in taking long positions arbitrarily.

Having announced a $1.9 trillion stimulus package plan a few days back, the new U.S President’s economic team is now strategizing on how to support two interrelated issues, which include the environment and infrastructure.

Such agenda listed above are expected to boost spending and create jobs in the world’s biggest economy coupled with increasing more liquidity in financial markets, which could see gold prices breaking the $1,900 price levels once again.

Also with the U.S Central bank and U.S Treasury going dovish, it provides an incredible support for gold bugs to remain relevant at the bullion market at least for the mid-term.

That said, futuristic gains in the precious metal could however remain elusive if the US Treasury yields rally high, putting a bid under the US dollar, the yellow metal’s biggest enemy.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders Weigh America’s Future Relationship with Key Oil Players

With the Biden inauguration scheduled to hold at the U.S capitol today, oil traders are a tad concerned about what foreign policy stand his presidency will take has regard to U.S future relationship with key oil producers that include Iran, Saudi Arabia, and Russia.

One of the wild cards some energy experts are envisaging is an upside to Iranian current oil production level dependent on the potential lifting of America’s sanctions under the incoming U.S president.

Such action however could affect crude oil demand/supply rebalancing negatively taking into consideration that the global economy hasn’t yet recovered amid rising COVID-19 cases globally thereby making a strong case on crude oil prices plunging below $50/Barrel once again.

Oil bulls are taking control of the prevailing oil price action on the account that open interest in the black liquid hydrocarbon is on the rise, as leading hedge funds momentarily in large numbers consider investing into the commodity asset class. This is because many oil traders consider the black fossil as a hedge against inflationary pressures.

In buttressing the bullish bias in play recent data reveal there has been an upsurge in the number of Oil bulls in the past week. About 163 money managers placed bullish bets on Brent Crude and West Texas Intermediate in the previous week showing the highest uptick demand by such fund managers in 11 months.

Brent crude the global benchmark for crude is expected to reach $60 in Q1, 2021 amid unprecedented stimulus programs expected to be unveiled by the incoming Joe Biden Presidency.

Also, Oil prices are being supported by the falling value in the greenback on the fact that the weaker U.S dollar lends support to crude oil prices since it’s denominated in U.S dollars.

The U.S dollar is expected to remain under pressure, at least in Q1, 2021 as it would be in the interest of the U.S. economy to keep the dollar lower in order for U.S leading companies to remain competitive coupled with spurring local consumption at the world’s largest economy. Such macro would aid crude oil prices in the mid-term.

For a look at all of today’s economic events, check out our economic calendar.

Gold Prices Melting Fast amid Expected Rise in Inflation

Gold traders are momentarily shorting the metal that has already suffered its second straight weekly decline amid a strong rebound in the greenback’s value overshadowing the yellow metal’s appeal as an inflation hedge after the U.S. Joe Biden proposed a new $1.9 trillion COVID-19 support program a few days ago.

In addition, the U.S dollar value against all odds printed impressive gains coupled with recent upticks in U.S. Treasury yields, lead gold futures in moderating below $1,825/ounce at press time.

Also, what seems to be taming gold bugs presently is the greenback’s sudden rise which is applying downward pressure on precious metals taking into consideration the US Dollar Index that is used in tracking the dollar strength against a basket of major currencies rallied above its 3 week high.

It’s vital to note, gold prices had been under pressure in the month of January amid growing sentiments revealing global investors preferred to hold the US dollar despite the Federal Reserve Chair Jerome Powell’s recently issued dovish statements saying interest rates would not rise in the near future.

That said, what is also weighing hard on gold prices is the US Treasury yields, on the account that has the price higher, it will limit gold’s gain in the near term U.S Treasury yields have a higher chance of more upsides, which could likely pose a big gold problem.

Recent price actions suggest gold traders are caught between longer-term buying of the hard safe-haven asset on the back of expected rising inflation, massive quantitative easing programs in play or shorting the bullion asset arbitrarily as the value of the greenback recovered amid rising cases of viral infections in Western Europe and United States.

For a look at all of today’s economic events, check out our economic calendar.

Gold’s Glory Days Might be Over, amid High Geopolitical Uncertainty

Metal traders are moving past the impeachment of President Trump and focusing more on, Joe Biden’s plans for further COVID-19 support programs scheduled to be released today.

At press time, recent price action revealed Gold futures were down by more than 0.65% to trade at/ounce $1,839.20.

Recent price patterns on the yellow metal’s chart affirms a bearish continuation pattern, on the 4-hour time frame despite the impeachment move sighted in the U.S congress, on the account metal traders are focused more on futuristic stimulus COVID-19 programs coupled with monetary policies from the U.S Federal Reserve Bank.

Also, gold traders are going short on the hard safe haven asset as recent data show an upsurge in U.S. Treasury yields and value of the greenback. The 10-year Treasury yields jumped close to its 10 month highs, thereby dampening the urge in buying precious metals at the near term.

In addition, gold traders are anticipating the future of gold remains tied to the hip of the US dollar fortunes in Q1, 2021.

US House of Representatives on Wednesday impeached President Trump for the second time charging the outgoing president with encouraging the January 6 attack on the US Capitol.

Surprisingly, ten House Republicans members broke party ranks and voted for President Trump’s impeachment.

However such move, as done little in supporting gold prices amid a significant geopolitical uncertainty in play, taking into account that recent reports suggest Majority Leader Mitch McConnell, will not convene the Senate until next week to hold a trial for President Trump.

However, positive factors for gold bugs at least in the mid-term, would have to involve the resumption of the greenback downtrend, or if the Federal Reserve Bank pulls a policy rabbit out of the hat and eases more into fragile American economic recovery, yet it seems Bitcoin is now taking the shine off gold amid record cash inflows seen in recent days from institutional investors in hedging against inflation.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders Go Long, Yet Near-Term Risks Remain

Oil traders are arbitrarily going long on recent released data from the American Petroleum Institute showing the U.S economy demand for energy is on the rise amid an era of growing COVID-19 caseloads disrupting major economic hubs around the world.

Oil prices rallied to pre-COVID-19 pandemic levels, as oil bulls pushed the prices of Brent crude as high as $57.41 after jumping on a larger U.S crude inventory drop, far more than what energy experts had anticipated earlier.

Also, a weaker greenback helped; coupled with complimented numerous price revisions by several energy analysts that oil prices might break above $60 per barrel in Q1, 2021.

In addition, oil traders are riding the price wagon high on the bias that the remainder of the week price action in the U.S dollar index points to more upsides for crude oil prices, on the account that the U.S central bank policy makers are expected to remain dovish and such will keep oil prices supported, as oil is priced in dollars.

However, the coast isn’t yet clear for Oil bulls. Oil traders are aware of the risks remaining, amid a wave of mutant strains of COVID-19 disrupting key markets particularly in the Northern Hemisphere, although recent price action shows it now appears there is a clearer path to oil upsides with downside risks diminishing day by day.

That said, a significant amount of oil traders still believe US shale producers’ reaction to the rally in the oil market might pose a short-term supply risk for oil, meaning it remains to be seen whether oil prices might be able to break higher in the coming weeks as the world’s largest importer of oil, China grapples with its biggest COVID-19 spike in months.

For a look at all of today’s economic events, check out our economic calendar.

Investors Tempering their Bearish Bets on U.S Dollar

At press time, the U.S. Dollar Index that gauges the greenback against a basket of major global currencies rallied by over 0.30%, minting impressive gains and thus climbing above the 90 price level, on the U.S dollar index.

Almost all assets including Bitcoin, Gold, Crude oil, and global stocks dropped significantly at the time of drafting this report, as It appears this time currency traders and global investors are struggling to iron out if the triggered nominal rise sighted on U.S Treasury yields could be a pre-cursor to a change in America’s monetary policy, which is the primary indicator for determining the direction of the US dollar from a monetary perspective.

Right now, FX dollar bears hold on the safe-haven market is virtually fizzling out, on the account that higher U.S Treasury yield differentials are giving dollar bulls enough gas to stay above the 90 index point level amid growing sentiments that the world’s largest economy will recover quicker than Europe in particular as the incoming American president aggressively pushes for more COVID-19 vaccination efforts.

On the greenback’s activity in the near term, it might be a case of a significant amount of volatility coming to play on the bias that whenever the risk-on sentiment like global stocks raises, the greenback relatively turns negative as capital is allocated elsewhere, meaning it’s not clear yet, if the U.S dollar recent bullish run can be sustained.

However, some leading currency experts anticipate the broad US dollar momentum will likely extend in the coming days even though it seems riskier assets like stocks and crypto are attracting record inflows of funds but there is also a growing reluctance to sell the greenback arbitrarily with the reckless upsurge in COVID-19 caseloads globally.

For a look at all of today’s economic events, check out our economic calendar.

Global Financial Markets Gain is Negative for U.S Dollar

Investors and currency traders are already pricing in the latest election results printing blue party’s senatorial wins.

The EUR/USD dropped below the 1.2300 support level before settling around the price level of 1.2272 at the time of drafting this report.

The EUR/USD pair’s recent drop was due to a stronger US dollar in play, although currency traders are aware that the greenback’s relative weakness in recent days has been sighted in all foreign exchange markets as currency traders prepare for a year of global economic recovery.

In addition, the old narrative remains intact, as the world’s most powerful currency tends to portray an inverse relationship with global investors’ measure for risk, meaning as the greenback strengthens, and global investors become wary of investing in riskier assets thus prefer to keep their assets in the safe-haven currency.

Consequently, the prevailing bullish trends in global markets are negative for the greenback on the basis that capital is allocated elsewhere meaning the prospect for the U.S dollar index remains negative at least for the mid-term, with further declines expected to breach the 89.00 support in Q1,2021.

That said, it’s key not to rule out USD bulls yet on the bias that the rising COVID-19 caseloads in Western Europe continue, coupled with the fact their political leaders implement more lockdown measures across Western Europe, thereby curbing economic activities and social mobility.

Also, the world’s largest economy is anticipated to recover faster than Europe, particularly as Joe Biden aggressively push for more quantitative easing programs, not forgetting with a more calibrated approach with America’s allies than his predecessor, meaning recent price actions show the odds are low in seeing the EURUSD pair above 1.2500 in such situation.

Recent macros, printing rising COVID-19 caseloads at the second-largest economy, China could push risk sentiments down again.

It’s fair to say COVID-19 still remains on the mind of global investors, as recent price actions show the new safe-haven asset, Bitcoin broke into a new record high as concerns and a possible drag on global economic activities remain.

So far so good, nominal US Treasury 10 year yields are priced above 1%, higher, still-low real U.S Treasury yields point to the riskier currencies having the upper hand.

For a look at all of today’s economic events, check out our economic calendar.

Saudi Arabia aids Oil Bulls, Crude Oil Prices Hit 49 Weeks High

At press time the London-based oil contract, Brent crude traded at $54.09 a barrel, the highest price level since February 2020. It key in noting Oil bulls pushed Brent crude prices up by 4.9% yesterday.

Also, the U.S based oil contract, U.S. West Texas Intermediate (WTI) futures gained as much 0.6% to trade at $50.24 a barrel. Both major oil benchmarks are trading above $50/Barrel.

Oil traders are going long on reports revealing the Saudis; (world’s largest crude oil exporter) announced it would additionally reduce its crude oil output by 1 million barrels per day over the next thereby helped in boosting the morale of oil traders in taking buy positions.

In just two trading sessions, Oil bulls have pushed the price of the black liquid hydrocarbon by about 6% on the exciting outcome of the recent concluded OPEC+ meeting.

The Saudi’s willingness in supporting crude oil prices and halting their supply momentum is a colossal signal hinting that the oil-producing juggernaut will go out of its way in defending oil prices while continually affirming the near-term demand risks, as the new COVID-19 virus variant distorts the energy demand/supply rebalancing in major emerged markets momentarily.

However, as the West Texas Intermediate futures surged to $50 a barrel and Brent trading at $54/barrel, profit-taking is expected to take its course on the bias that Asian refiners will not be getting into long-term deals in 2021 as demand concerns remain fragile meaning oil bulls are not out of the woods yet.

For a look at all of today’s economic events, check out our economic calendar.

Currency Traders Liquidate their U.S Dollar Holdings for Riskier Assets

Also, the greenback’s value approached its two and half year low against emerged currencies like the Euro, British pound sterling,, Japanese Yen, Swedish Krona.

Economic reports released today revealing purchasing managers indexes from leading Asian economies printed gains for December, added pressure on the greenback.

At the time of writing this report, the U.S Index lost about 0.27% to trade at 89.648 and not far from its 2-1/2 year low level of 89.515, sighted at last week’s trading session.

Currently, currency traders are shorting the dollar on the bias that global uncertainty is weakening and it’s likely we have a strong global growth recovery in 2021.

USD bulls for now will have to stay on the bench at least for the near term taking into account that it’s an era of ultra-low U.S. interest rates, massive quantitative easing programs enacted by global central banks, over bloated global debt market, and a belief that world trade will rebound strongly has rallied riskier currencies like the Chinese Yuan.

It’s critical to note the U.S index posted its first annual loss in three years coupled with the fact it has lost about 13% from a three-year peak hit at the height of the COVID-19 panic in March.

As seen in London’s trading session the plunge in the value of the safe-haven currency is most notable against the emerging markets FX complex, taking into account they are still relatively undervalued.

High hopes on COVID-19 Vaccines and reports revealing additional quantitative easing programs from the world’s largest economy has ramped up demand for risk assets and also weighed on the greenback

USD bears are taking hold of the US dollar, nudged on by risk on proclivities which sees the EURUSD pair trading back to the key resistance level at 1.2251.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders Set to Ride on COVID-19 Vaccine Wave of Economic Recovery Into 2021.

Crude oil traders won’t in a hurry forget how eventful the black liquid traded this year amid an era of COVID-19 pandemic that at one time of the year saw a shock maiden feature into negative territory for West Texas Intermediate futures in April, as energy demand plunged.

At Today’s trading session, Brent crude futures were trading around $51.44 per barrel, losing about 0.25% in face value, and also the U.S based oil contract West Texas Intermediate futures were down 0.35% to trade at $48.22 per barrel.

Oil bears dominated the headlines in the early part of 2020 with the aid of the COVID-19 pandemic, which disrupted global financial markets negatively, reduced human mobility at levels not seen since the Second World War, and most important wiped out 20% of the global crude oil markets’ value in 2020.

That said, unprecedented quantitative easing enacted by global central banks supported oil prices in jump-starting from these low levels, with both major oil benchmarks Brent crude and West Texas Intermediate futures gaining more than 100% from their 10 year-lows seen in Q1 2020.

Presently oil prices have fared relatively well in Q4 2020, as energy demand in the world’s largest economy seems to have improved significantly, as recent data retrieved from the U.S Department of Energy reported a massive draw in oil stockpiles of -6.065 million barrels and beating even the American Petroleum Institute estimate of 4.785 million barrel drop, aided oil the bias that Brent crude futures prices would end the year 2020 at least above $50 per barrel.

Still, Oil bulls are aware of the prevailing market conditions in play most especially on COVID-19 macros, taking to account the current level of COVID-19 restrictions currently in play at emerged and emerging market could pose a threat to a continuous bullish rally in 2020, yet oil traders look set to ride on the COVID-19 vaccine wave of economic optimism into 2021.

For a look at all of today’s economic events, check out our economic calendar.

Currency Traders Short U.S Dollar amid Growing Appetite for Risk

This led the U.S dollar index value to lose about 0.35% at the time of writing this report.

The bearish bias is coming on the massive stimulus deal recently passed by the leader of the world’s most powerful economy.

In addition recent price action, in the currency market reveal U.S dollar bears are cruising high on a report that hint more COVID-19 vaccines are on their way, thereby brightening the global economy outlook for 2020, thereby triggering global investors in liquidating their dollar holdings into assets like Stocks, Crypto and other riskier financial instruments. This alone suggests many to cautiously trade US dollars, against many growth currencies.

The US dollar weakness also has been strengthened of late on the bias that the unprecedented level of quantitative easing programs of the U.S central bank is seen by many economic experts as inflationary in principle, leading many to believe that the continual plunge in the U.S dollar value might persist into 2021 unless there is a surprise pivot by the U.S Federal Reserve board.

Ahead of its prevailing index point the U.S dollar index support line or previous resistance stands around 89.70, its monthly low, and around the lowest level since mid-2018, of 89.73, which could aid USD bulls from suffering less damage, taking into consideration currency traders might likely go long at those levels, except more liquidity injections such as an upgrade in more COVID-19 stimulus spending programs are approved.

Traders are of the opinion that it’s still too early to worry when the central bank pushes back against the dollar down cycle.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Prices Trigger Up amid an Era of Asset Bubble

Oil traders are going long aggressively now after recent reports revealed U.S. President Donald Trump signed a $2.3 trillion COVID-19 aid and spending package, pushing oil prices far above their most recent support levels.

At the time of drafting this report, Brent crude futures gained about, 1.07%, to trade at $51.85 a barrel having lost as much as 1.5% to $50.53 a barrel at the Asian trading session early this morning.

Also the U.S based oil contract, the U.S. West Texas Intermediate (WTI) rallied high by 1.1%, to trade at $48.76 a barrel.

Oil bulls are pushing the black liquid hydrocarbon amid thin trading volumes prevailing, as some oil traders remain on the sidelines due to the long holiday week. Still, Oil bulls took charge of the recent price action as it revealed oil bears were kept under check on the bias that U.S. President Trump latest moves were received in good faith among many traders on the account it would help the world’s biggest consumer of oil in boosting its domestic spending and averting a paralysis in the U.S government statutory functions.

Also when you consider the negative correlation between the price of crude oil and the greenback, meaning oil bulls are safe for now on the account that the US dollar’s value dropped momentarily at London’s trading session this morning, thereby helping oil prices with some positivity.

However, oil traders understand the impact COVID-19 mutant strain has on the most vital commodity market taking into consideration oil prices posted their first weekly loss since October as the mutant strains of COVID-19 caused havoc in Western Europe and South Africa.

These has also disrupted air travels amid the ongoing festivity prevailing around the world and made the highest importer of crude oil China, suspend passenger flights to the United Kingdom.

For a look at all of today’s economic events, check out our economic calendar.

U.S Dollar’s Plunge Boosts Stock Markets and Emerged Market Currencies

The U.S dollar index value currency traders used in tracking the greenback’s strength against a basket of other major currencies (Euro, British pound sterling, Swiss Franc, Japanese Yen, Swedish Krona, Canadian dollar) plunged 0.22% to 90.142.

U.S dollar value has plummeted more than 6% this year alone. Global investors are going short on the U.S dollar on the account that the U.S. Federal Reserve maintains a dovish monetary policy and expectations of more quantitative easing programs for 2021 to aid the American fragile economy from COVID-19.

Still, many traders anticipate an expected further decline in the greenback will boost stock markets and emerging-market currencies.

For the Eurozone, all eyes on Brexit. With the British pound dragging on as we approach the 31st December deadline, optimism that the EU and the UK will secure a deal could see the pair spike to 1.40 levels and the euro could touch 1.25.

However, a no-deal outcome cannot be ruled out and the deep shock this could inflict on trade and business sentiment. Even if a Brexit deal were secured, there would still be trade disruption given new administrative burdens on firms exporting into the EU.

Uncertainty across all economies, combined with a new national lockdown across countries in January to counter the second wave and new strain of COVID, means choppy economic activity across the board in Q1 for all major/emerging currencies and will see investors taking solace in traditional safe-haven assets.

This could likely prompt federal banks across economies to further cut rates towards negative territory. Consequently, the world economic growth forecast may be revised downward to accommodate the looming shock on economies.

For a look at all of today’s economic events, check out our economic calendar.

Oil Bears Take a Grip on Crude Oil Markets

Oil traders are going short momentarily on reports revealing U.S. crude oil stockpiles gained significantly, coupled with President Trump’s threat of not signing the long-awaited COVID-19 stimulus deal recently approved by U.S congress, pushed Brent crude prices below the $50/barrel.

At the time of drafting this report, the American-based oil contract, West Texas Intermediate dropped more than 1%, to trade at $46.56 while the London-based oil contract, Brent crude futures lost about 0.9%, to trade at $49.62 a barrel.

Oil bears are taking a grip on the oil market at the time both major oil contracts lost nearly 6% in value after their second straight session of declines, oil bears sunk their claws deeper at today’s trading session after recent data from the world’s largest economy revealed soft energy demand remains in play.

American Petroleum Institute recent data showed reported crude oil stockpiles gained by 2.7 million barrels in the week to December 18, compared to energy experts’ expectations for a drop of 3.2 million barrels.

Oil prices are tanking lower, after President Trump rattled oil traders’ nerves on not signing the $892 billion COVID-19 stimulus bill, saying he wanted U.S lawmakers to increase the amount on relief checks which U.S lawmakers approved some days ago.

Also, COVID-19 cases continued to rise at the world’s largest economy, with over a million new cases in less than a week, prompting government authorities in discouraging its citizens from traveling for Christmas, further dampened energy demand, as air travel and social mobility came under check.

In addition, restrictions on human mobility are also prevailing in most part of Western Europe prompting energy demand fear to resurface on the bias that reduced human activity signal a further distortion in energy demand/supply rebalancing, meaning Brent crude prices could settle below $48/barrel at the end of 2020 if the prevailing situation remains in play.

If the world largest economy goes back anywhere near the edge of the COVID-19 lockdown abyss that occurred in March/April, oil bulls could go under for at least two months not to mention a big price wipe-out in crude oil’s previous gains.

Unfortunately, for Oil bulls, the crude oil price pattern points to more downside in play especially as COVID-19 lockdown headlines take the center stage.

For a look at all of today’s economic events, check out our economic calendar.

Gold Bugs Trigger Happy, Over U.S COVID-19 Stimulus Package, Brexit Deadlock

The yellow metal recorded significant gains at Monday’s trading session in London, strengthened concerns surrounding a successful Brexit deal, coupled with the fears of the new COVID-19 variant pushed the bullion metal above the $1,900/ounce price level.

Gold prices are also fired up on recent reports revealing US lawmakers are now on the same page in passing the $900 billion COVID-19 economic relief package after months of political chaos at Washington. U.S House leaders further disclosed they would vote on passing the deal today and the U.S Senate is looking likely to vote on the stimulus deal soon too helped in keeping gold prices above the $1,905/ounce level.

Gold bugs are riding fast, as prevailing price action show high volatility at today’s trading session in London.

It’s now looking like the Brexit deal might not get an approval anytime soon as this week’s holiday-shortened data docket looks to be filled might keep the gold bugs rally supported at least for the short term.

However, gold traders at the back of their minds traders understand the risks ahead amid the present official verdict revealing a Brexit deal might come in the mid-term which in turn could keep the gold bugs run tamed arbitrarily.

Also the U.S dollar index value of late has rebounded strongly meaning there is a huge demand for the safe-haven currency on market sentiments that any threats to a COVID-19 vaccine-led global recovery might be the most crucial dynamic for next year.

That said, recent price action reveals gold bugs are gaining a firm grip above last week’s high of $1896.29/ounce, meaning gold bears might be crushed in the near term as selling pressure carve a path for gold prices to challenge above the $1,915/ounce resistance level.

For a look at all of today’s economic events, check out our economic calendar.

U.S Dollar Set to Record its Worst Q4 Drop Since 2003

The greenback is set to record its worst Q4 drop since 2003; taking to account it has plunged by 4% in value.

Prevailing price action reveals the massive plunge in the U.S dollar index remains its poorest performance in the final three months of 2020 since a 6.4% drop recorded in Q4 2003; as crude oil bears are push the U.S dollar index lower to a value not seen in years.

In addition, U.S dollar bears are controlling the greenback’s price action amid the recent rollout of COVID vaccines in play at the United Kingdom and United States thereby pushing the U.S index value below a strong critical support level of 90 points at about 11.40 am GMT.

Still, currency traders on many fronts might resume their buying spree, if the value falls around 88.50-89.75 points on the bias that such price level could push the greenback sellers back at least for the near term, taking to consideration prevailing signs reveal the number of COVID-19 caseloads in the United States is worsening.

Many currency experts are anticipating the geopolitical uncertainty created by President Trump on his unusual unilateralism position on political and international issues also contributed in some way in giving currency bears enough grip in pushing the U.S dollar value in recording losses of 6.88% year to date.

However, some currency traders anticipate the U.S dollar might rebound strongly next year, amid the era of expansive stimulus support, taking to consideration that the incoming president Joe Biden would most likely undo some of the damage caused by his predecessor by recommitting to multilateralism and display a much warmer approach to its Western allies.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Prices Susceptible to Near-Term Profit-Taking

Oil bulls are presently out of gas on reports showing a surprise gain in U.S Oil stockpiles, leading oil traders to ponder if the partial lockdown prevailing in major economic hubs around the world’s largest economy has squeezed energy demand momentarily.

It’s important to note that the present rollout of COVID-19 vaccines, curbed losses at the major oil benchmarks, as Brent crude futures dropped slightly by 0.35% to trade at $50.55 a barrel at 8.37 GMT, also the U.S based oil contract the West Texas Intermediate (WTI) crude futures dropped by 0.29%, to trade at $47.41 a barrel.

Recent data retrieved from the American Petroleum Institute revealed U.S Crude oil inventories gained by 2 million barrels in the week to December 11 printing about 495 million barrels, which led to some bullish bets closed on the bias many oil experts expected a draw of 1.9 million barrels.

Oil traders are now wary of going long in spite of the bullish run presently in play amid open concerns that the rollout of COVID-19 vaccines in combating the COVID-19 viral attacks might not be enough as recent data in the past few weeks show energy demand in the world’s largest economy is fast softening.

Such bias, keeps the black liquid hydrocarbon susceptible to near-term profit-taking in the near term, considering oil prices are rallying high in the past weeks with recent price action showing a pause in momentum, however, the medium and long-term macros for the crude oil market remain rock solid.

The endless effort by OPEC+ in reducing the global oil inventory levels prevailing at record levels would help support oil prices, and staying at least above $45/Barrel, on the account that global demand for energy recovers to pre-COVID-19 levels, possibly faster than expected thanks to the COVID-19 vaccine.

That said, my view on the black fossil market are, crude oil bears most likely taking the center stage in the near term, on the bias that the downward energy demand pressure in play across the emerged markets, might distort energy demand/supply rebalancing.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Prices Long Term’s Dynamics Outlook Stays Upbeat

At the time of writing this analysis, the British-based oil contract, Brent crude gained about 0.70% to trade around $50.30/Barrel while that of West Texas Intermediate futures traded up by 0.60% to trade at $46.85/Barrel.

Oil bulls are riding relatively higher on prevailing fundamentals on reports coming from the U.S Food and Drug Administration, which approved the COVID-19 vaccines manufactured by the leading American drug maker Pfizer.

Pfizer has begun distributing the COVID-19 vaccines around major cities in the world’s largest economy thereby giving oil bulls enough gas in keeping both major oil benchmarks above $45/Barrel.

In addition, the black liquid hydrocarbon printed gains at the early trading sessions in London on strong economic data coming from the third-largest economy, Japan coupled with expectations on a likely positive decision from the European Union and the United Kingdom surrounding Brexit.

However, oil bulls are aware that it’s too early, to declare victory in the fragile energy market on prevailing signs coming from emerging economies that show disturbing signs in Europe and the US, is partly responsible on why oil prices are trading below the $51/Barrel price level.

Also taking to account, Europe’s largest economy Germany, just announced its highest number of COVID-19 cases and deaths, as Germany’s top political leaders consider when to go on a full COVID-19 lockdown mode, could put bearish grip on oil prices in the coming days.

That said, in the near-term its looks like oil prices are tilting towards an overbought position, taking to consideration oil prices have recorded 6 weeks gains consecutively, coupled with recent price action showing the level of COVID-19 vaccines optimism seems to be already priced, meaning oil prices recent momentum might pause, but whatever concerns remain the near-term outlook, the future looks far much better for crude oil dynamics in the long term than it did a few weeks ago.

For a look at all of today’s economic events, check out our economic calendar.

Currency Traders Panorama View on U.S Dollar Signals Blurry Outlook

A the time of writing this report the U.S. Dollar Index that monitors the greenback strength against a basket of major global currencies (Euro, British pound sterling, Japanese Yen, Swedish Krona, and Canadian dollar ) was ranging between 90.977 – 91.145 just slightly above the two-and-a-half-year low of 90.47 seen at last week trading session.

Although recent price action show, currency traders are slowly buying the U.S dollar, which is regarded among many has a safe haven currency amid concerns whether the U.S congress can reach a compromise over the latest stimulus deal in bailing out the fragile U.S economy presently in play.

Price action also reveals currency traders are cautiously placing their trading bets on the bias that reveals the US Dollar index is currently trading around the price level seen since April 2018, meaning a change in the prevailing narrative would be required in pushing the U.S dollar significantly up amid the inverse relationship between the dollar and foreign asset prices prevailing.

Currency traders are also focusing on the European Central Bank (ECB) amid blurry outlook hanging in there with risk sentiment trading suspended arbitrarily, as the Euro was largely non-volatile to reports revealing a breakthrough in EU budget discussions.

That said, a significant break-through in the pending stimulus deal could weigh heavily on the greenback’s value coupled with the expectation of more quantitative easing from the all expected US FOMC meeting about to take center stage and possibly some sort of yield curve control pivot.

For a look at all of today’s economic events, check out our economic calendar.

Oil Prices Losing Steam amid Soft Energy Demand

A larger-than-expected gain in U.S. crude oil stockpiles pushed the prices of crude oil below their December highs; however, oil bulls kept the game on, taking to account the macros hinting at positive COVID-19 vaccines news triggered hopes of a recovery in fuel demand in the mid-term and to an extent curbed deep losses in the crude oil market black.

At the re-opening of the London trading session, the British based oil contract, Brent crude futures traded around $48.62, and not forgetting the West Texas Intermediate futures was slightly down to trade at around $45.40. Both Brent crude and WTI futures however remained above the critical $45/barrel price mark.

Recent data retrieved from the American Petroleum Institute revealed a 1.141-million-barrel gain in U.S. crude oil stockpiles for the week ending December 4.

The surge in oil inventories at the world’s largest economy was much larger than the 1.514-million-barrel drop some energy experts had earlier anticipated, however, it showed that energy demand was picking up, taking to account the previous week’s gain of 4.146-million-barrel.

It now becomes obvious when digesting the recent price action at the crude oil market, that although the deal achieved by OPEC+ has limited the spirally drop of oil prices, the bulls are now battling hard to push up even with positive news on the COVID -19 vaccine front, meaning though it seems the worst-case scenarios for the black liquid hydrocarbon have all but subdued, the main macro for oil prices in rallying up would be how effective the prevailing COVID-19 vaccine distribution network works out, taking to account that the Northern Hemisphere is already in winter, coupled with the bias that the number of COVID-19 caseloads seems to be going out of control.

Still, the outlook for the crude oil market in the midterm reads brighter on the bias that as more people in the general population get vaccinated, social mobility will increase substantially.

For a look at all of today’s economic events, check out our economic calendar.