Crude Oil Price Update – Testing Retracement Zone; Strengthens Over $63.47, Weakens Under $62.29

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday after hitting their highest level since March 18. The move represented a limited follow-through following yesterday’s move than 5% surge.

Several catalysts are supporting the market at this time including increased demand forecasts from the International Energy Agency (IEA) and OPEC, a bigger than expected drop in U.S. crude stockpiles and a weaker U.S. Dollar.

At 08:12 GMT, June WTI crude oil futures are trading $62.96, down $0.26 or -0.41%. This is down from a high of $63.55.

The IEA’s monthly report said global oil demand and supply are set to be rebalanced in the second half of the year after the COVID-19 pandemic destroyed demand in 2020. Meanwhile, OPEC expects demand to rise by 70,000 bpd from last month’s forecast and global demand is likely to rise by 5.95 million bpd in 2021.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has shifted to the upside. The main trend will change to up on a trade through $66.15. A move through $57.29 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. The minor trend changes to down on a move through $57.68.

The short-term range is $67.29 to $57.29. The WTI crude oil market is currently testing its retracement zone at $62.29 to $63.47.

On the downside, minor support is a pair of 50% levels at $61.72 and $60.42.

The main range is $51.04 to $67.29. Its retracement zone at $59.17 to $57.25 is support. It’s also controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at $63.47.

Bullish Scenario

A sustained move over $63.47 will indicate the presence of buyers. Taking out the intraday high at $63.55 will indicate the buying is getting stronger. This could trigger the start of an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with potential targets a pair of main tops at $66.15 and $67.29.

Bearish Scenario

A sustained move under $63.47 will signal the presence of sellers. This could trigger a quick break into a pair of 50% levels at $62.29 and $61.72. Taking out the latter could extend the selling into the minor 50% level at $60.42.

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

Crude Oil Price Forecast – Crude Oil Markets Breaking Out

WTI Crude Oil

The West Texas Intermediate Crude Oil market has found itself to be very strong during the trading session on Wednesday as the inventory number showed that there was a significant drop in inventory. That of course is bullish for the commodity and the idea of the “reopening trade.” With that being the case, I think this is a market that will continue to try to grind higher, perhaps reaching towards the $65 level above. At that point, we have seen a lot of selling so it will be interesting to see how that plays out. Ultimately, the $60 level should now offer significant support in this market.

Crude Oil Video 15.04.21

Brent

Brent markets have also rallied during the trading session, breaking above the $66 level. There is a significant amount of demand out there for crude it appears, and that should continue to lift this market. Currently, it looks as if Brent is going to try to go looking towards the $67.50 level, an area that had seen a lot of selling in the past. To the downside, I believe that the 50 day EMA will offer a bit of a short-term floor, and traders will continue to pay attention to it. If that happens, I think what we will see this point in time is a bit of a bounce.

It appears that the demand for crude oil is picking up, and it does not hurt the both the IEA and OPEC both revise their demand forecasts higher for the rest the year, and therefore demand should continue to be a major driver of crude oil going forward.

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

Oil Price Fundamental Daily Forecast – Prices Surge as Crude Inventories Plunge Amid Jump in Refining Activity

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Wednesday following the release of a government report that showed a bigger-than-expected drawdown in crude supplies. The market was supported earlier in the session as OPEC upwardly revised its demand forecasts and better-than-expected news from the American Petroleum Institute (API) late Tuesday.

At 16:00 GMT, June WTI crude oil is trading $62.98, up $2.74 or +4.55% and June Brent crude oil is at $66.36, up $2.69 or +4.22%.

US Energy Information Administration Weekly Inventories Report

U.S. crude oil stockpiles dropped more than expected as refiners increased activity heading into the summer driving season, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell by 5.9 million barrels in the week to April 9 to 492.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.

U.S. gasoline stocks rose 309,000 barrels in the week to 234.9 million barrels, less than analysts’ expectations for a 786,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels versus forecasts for a 971,000-barrel rise, the EIA data showed.

Refinery utilization rates rose by 1 percentage point to 85% of overall capacity. That is the highest since March of last year, just before the coronavirus pandemic caused refiners to severely restrict processing activities as demand dove.

Net U.S. crude imports rose last week by 443,000 barrels per day. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 346,000 barrels in the last week, the EIA said.

Demand Predictions Move to Forefront

The International Energy Agency (IEA) predicted global oil demand and supply were set to rebalance in the second half of the year and that producers may then need to pump an additional 2 million barrels per day (bpd) to meet the expected demand.

Similarly, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday raised its global demand forecast by 70,000 bpd from last month’s forecast and now expects global demand to rise by 5.95 million bpd in 2021.

Daily Forecast

The strong demand forecasts are likely to overcome the gradual increases in output by OPEC and its allies. So prices are likely to remain underpinned over the near-term.

Additionally, a weaker U.S. Dollar should continue to be supportive for prices since it tends to increase foreign demand for the dollar-denominated commodity.

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

Stocks Set To Open Higher As Big Banks Report Strong Earnings Results

Treasury Yields Stay Close To Recent Lows

S&P 500 futures are gaining some ground in premarket trading as Treasury yields remain close to recent lows. Yesterday, U.S. inflation reports indicated that inflation was rising a bit faster than analysts expected.

However, this increase is not sufficient enough to trigger any response from the Fed so Treasury yields declined after the release of inflation reports. Today, Treasury yields remain close to yesterday’s levels which is bullish for tech stocks which look ready to continue their upside move.

Big Banks Report Earnings

JPMorgan has recently released its quarterly results. The company reported revenue of $32.3 billion and earnings of $4.50 per share, beating analyst estimates on both earnings and revenue. Goldman Sachs and Wells Fargo reports also exceeded analyst estimates.

Financial stocks had a strong start of the year as yields moved higher, and it looks that investors have made a right move by betting on the financial segment as results look strong.

Interestingly, shares of Goldman Sachs and Wells Fargo are gaining some ground in premarket trading while JPMoran stock is down by about 0.5%, but the situation may change quickly when the regular trading session begins.

Oil Moves Higher As Iran Tensions Increase

WTI oil is currently trying to settle above the $61 level as the fate of renewed nuclear talks with Iran is under question. Recently, participants of the 2015 nuclear deal made an attempt to put Iran and U.S. back to the negotiation table, but the recent attack on Iran’s Natanz nuclear facility increased tensions.

In response to the attack, Iran stated that it would enrich uranium up to 60% purity. It is not clear whether Iran has the technical capability to do so in the near term, but the move clearly raises stakes in the complicated game between U.S., Iran and other participants of the 2015 nuclear deal.

It should be noted that the recent API Crude Oil Stock Change report indicated that crude inventories decreased by 3.6 million barrels and provided additional support to the oil market. If today’s EIA Weekly Petroleum Status Reports confirms API numbers, oil may gain additional upside momentum.

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

Crude Oil Price Update – Set Up for Short-Term Test of $62.29 – $63.47 Retracement Zone

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday shortly before the regular session opening. The rally is being fueled by the news that OPEC raised its outlook for oil demand and an industry report that showed U.S. inventories declined more than expected. Despite the potentially bullish news, some traders feel gains could be limited by COVID-related demand worries and rising supplies.

At 09:38 GMT, June WTI crude oil futures are trading $61.31, up $1.07 or +1.78%.

A report released late Tuesday by the American Petroleum Institute (API) showed crude stocks fell by 3.6 million barrels in the week ended April 9, compared with estimates for a decline of about 2.9 million barrels from analysts polled by Reuters.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $66.15 will change the main trend to up. A move through $57.29 will signal a resumption of the downtrend.

The minor trend is also down. The minor trend changes to up on a move through $61.75. This will shift momentum to the upside. Taking out the next minor top at $62.22 will reaffirm the minor trend.

On the downside, the nearest support is a 50% level at $59.75, followed by the main retracement zone at $59.17 to $57.25. This zone is controlling the near-term direction of the market.

The first short-term range is $66.15 to $57.29. Its 50% level comes in at $61.72.

The second short-term range is $67.29 to $57.29. Its retracement zone at $62.29 to $63.47 is the primary upside target. Since the trend is down, sellers could come in on a test of this area. They will be trying to form a potentially bearish secondary lower top.

Daily Swing Chart Technical Forecast

The early upside momentum suggests the market is headed into the 50% level at $61.72. The direction the rest of the session will be determined by trader reaction to this level.

Bullish Scenario

A sustained move over $61.72 will indicate the presence of buyers. If this move creates enough upside momentum then look for the buying to possibly extend over the minor tops at $61.75 and $62.22 and the 50% level at $62.29. The latter is a potential trigger point for an acceleration into $63.47.

Bearish Scenario

A sustained move under $61.72 will indicate the buying is lightening up and the selling may be getting stronger. If this creates enough downside momentum then look for the selling to possibly extend into a pair of 50% levels at $59.75 and $59.17.

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

OIL Range Expansion is a Possibility

Oil has been consolidating in a rectangle and we could see a move up before the price drops.

Since March 17 we have seen a consolidation in the oil price. We don’t know if the market is going to continue with any trend until the range is broken. At this point we should see a drop from 78.6-88.6 zone towards W L4 camarilla. However, the POC zone needs to be reached – 63.22-63.98. When the price gets there, I assume another drop is coming towards 57.52 which will be the target for the move. This will create another rectangle and possible range 50-65.

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

Cheers and safe trading,

Nenad

 

Oil Price Fundamental Daily Forecast – Underpinned by Optimistic OPEC Demand Forecast Ahead of API Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher late Tuesday after OPEC raised its forecast for growth in world oil demand this year on expectations the pandemic will subside, providing help for the group and its allies in their efforts to support the market, Reuters added.

At 05:23 GMT, June WTI crude oil is at $60.17, up $0.42 or +0.70% and June Brent crude oil is trading $63.68, up $0.40 or +0.63%.

Demand Expected to Rise 6.6% in 2021:  OPEC

Demand will rise by 5.95 million barrels per day (bpd) in 2021, or 6.6%, the Organization of the Petroleum Exporting Countries forecast in its monthly report. That is up 70,000 bpd from last month, Reuters reported.

“As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programs, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility,” OPEC said in the report.

The upward revision marks a change of tone from previous months, in which OPEC has lowered demand forecasts because of continued lockdowns. A further recovery could bolster the case for OPEC and its allies, known as OPEC+, to unwind more of last year’s record oil output cuts, Reuters said.

OPEC made a small upward revision in its 2021 demand projection last month, but it has steadily lowered the forecast from 7 million bpd expected in July 2020.

The group raised its forecast of 2021 world economic growth to 5.4% from 5.1%, assuming the impact of the pandemic is “largely contained” by the beginning of the second half of the year.

“The global economic recovery continues, significantly supported by unprecedented monetary and fiscal stimulus,” OPEC said. “The recovery is very much leaning towards the second half of 2021.”

Daily Forecast

Oil prices were also supported on Tuesday by tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites and on an expected drawdown in crude oil inventory in the United States.

U.S. stockpiles were expected to have dropped last week for a third straight week, while distillate and gasoline inventories likely grew, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute (API) an industry group, due for release later on Tuesday at 20:30 GMT and the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, on Wednesday.

Crude Price Forecast – Crude Oil Markets Continue Slow Grind

WTI Crude Oil

The West Texas Intermediate Crude Oil market has rallied ever so slightly during the trading session on Tuesday, as we continue to dance around the $60 region. The 50 day EMA is sitting just below, so that of course is something worth paying attention to as well, as the 50 day EMA does tend to attract a lot of attention from a technical analysis standpoint. As you can see on the chart, I have an area of consolidation marked off, so until we break out of that I think this is simple back-and-forth choppy trading behavior just waiting to happen. That is fine, you just have to be willing to trade shorter-term charts, perhaps with more or less a slightly upward bias.

Crude Oil Video 14.04.21

Brent

Brent markets were also very quiet during the trading session, and also sitting just above the 50 day EMA. This market has essentially been looking for some type of reason to move in one direction or another, but obviously has not had it yet. With that being the case, I think that we are looking at a scenario where we are trying to figure out where to go next. If we break down below the $60 level, then it is likely that the market goes looking towards the $55 level. On the other hand, if we turn around a break above the $65 level, then the Brent market should go looking towards the $67.50 level above. In the meantime, we are simply going back and forth so there is no point whatsoever in trying to figure out anything other than it is a sideways market looking for direction.

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

Crude Oil Price Forecast – Crude Oil Markets Slightly Positive

WTI Crude Oil

The West Texas Intermediate Crude Oil market has been all over the place during the trading session on Monday, but it does look positive in general. The $60 level is an obvious area of interest for traders, so therefore I think we are looking at a scenario where people are going to be very cautious. Having said that, we are also sitting on top of the 50 day EMA and we are simply “killing time” while trying to figure out what the next move is. This has been the case for several weeks now, and it seems like it is getting worse. That being said, market can only sit still for so long so one would have to believe there is a certain amount of inertia being built.

Crude Oil Video 13.04.21

Brent

Brent markets were very much the same during the trading session as you would anticipate, with crude oil demand being a huge question as there are going to be more moves to increase production, but at the same time there are questions as to whether or not demand is going to come back as quickly as once thought. After all, the European Union looks like it is trying to lock itself back down again, which will do no favors for the idea of crude oil rallying. That being said, it is most certainly worth paying close attention to because quite frankly this is a market that I think continues to be very choppy and sideways but just as we see in the WTI market, it is only a matter of time before inertia takes over and we should have a bigger move.

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

Oil Price Fundamental Daily Forecast – Prices Spike on Middle East Tensions, But Supply Remains Uninterrupted

U.S. West Texas and international-benchmark Brent crude oil futures are trading higher on Monday shortly after the regular session opening.

After an early session setback, prices spiked higher on tensions in the Middle East. Nonetheless, many traders believe that prices will continue to be rangebound, supported by optimism over a rebound in the U.S. economy as coronavirus vaccinations accelerated, but likely capped by rising COVID-19 cases and worries over temporary shortages in vaccines.

At 14:06 GMT, June WTI crude oil futures are trading $60.51, up $1.16 or +1.95% and June Brent crude oil is at $64.01, up $1.06 or +1.68%.

Oil Spikes as Yemen’s Houthis Reports Attack on Saudi Aramco Facilities

Yemen’s Iran-aligned Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi Aramco facilities in Jubail and Jeddah.

There was no immediate Saudi confirmation, Saudi Aramco, the state oil firm, said when contacted by Reuters that it would respond at the earliest opportunity.

Houthi military spokesman Yahya Sarea said on Twitter the group’s barrage included 10 Samad-3 drones fired at refineries in the Red Sea city of Jeddah and Jubail in the Eastern Province.

Aramco’s refinery in Jeddah was decommissioned in 2017 but it has a petroleum products distribution plant there that the Houthis have previously targeted.

Saudi-led Coalition Intercepts Houthi Drone – State Media

Over the weekend, the Saudi-led military coalition battling Yemen’s Houthi movement intercepted and destroyed a drone launched by the Iran-aligned towards the southern Saudi Arabian city of Khamis Mushait, state media said on Sunday.

Houthi military spokesman Yahya Sarea said in a Twitter post that two drones were fired at military hangars in Jazan airport in the south of the kingdom and a military air base in Khamis Mushait.

Iran Blames Israel for Natanz Nuclear Plant Outage, Vows Revenge

Iran on Monday accused arch-foe Israel of sabotaging its key Natanz nuclear site and vowed revenge for an attack that appeared to be the latest episode in a long-running covert war.

Iranian authorities described the incident a day earlier as an act of “nuclear terrorism” and said Tehran reserved the right to take action against the perpetrators.

On Monday, Foreign Minister Mohammad Javad Zarif explicitly blamed Israel. “The Zionists want to take revenge because of our progress in the way to lift sanctions… We will not fall into their trap…We will not allow this act of sabotage to affect the nuclear talks,” Zarif was quoted by state TV as saying.

“But we will take our revenge against the Zionists.”

Daily Forecast

WTI and Brent crude oil could continue to pick up bids if the situations in Saudi Arabia and Iran escalate. However, so far there has been no immediate threat to the oil supply so gains are likely to be limited.

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

Stocks Decline As Traders Take Some Profits After Rally

Traders Prepare For Earnings Season

S&P 500 futures are moving lower in premarket trading as traders prepare to take some profits off the table ahead of the earnings season.

Big financial companies like JPMorgan Chase, Wells Fargo and Goldman Sachs will provide their earnings reports this week, marking the beginning of the active phase of the new earnings season.

The stock market is trading at all-time high levels, and stocks may get an additional boost if the earnings season brings positive news. At the same time,  some traders may prefer to wait for actual reports before increasing their exposure to stocks.

Strong Retail Sales Data From Europe Supports Markets

Today, EU reported that Euro Area Retail Sales increased by 3% month-over-month in February after falling by 5.2% in January. Analysts projected that Retail Sales would grow by 1.5% so the report was much better than expected.

The strong report provided some support to global markets as it indicated that consumer activity in Europe increased despite the challenging situation on the virus front.

WTI Oil Gains Ground After An Attack On Iran’s Nuclear Plant

Iran’s Natanz nuclear site has recently suffered an electricity outage which led to unspecified damage. On Monday, Iran blamed Israel for the attack on its plant but noted that the attack would not impact nuclear talks.

The recent nuclear talks went well which put some pressure on oil. If Iran starts to comply with the 2015 nuclear deal, Iranian oil will return back to the international markets and put pressure on oil prices.

In this light, an incident at the key Iranian nuclear site serves as a bullish catalyst for the market. Currently, WTI oil is trying to settle back above the psychologically important $60 level. In case this attempt is successful, WTI oil will gain additional upside momentum and move towards the recent highs at the $62 level which will be bullish for oil-related stocks.

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

Crude Oil Price Update – Strengthens Over $59.75, Weakens Under $59.17

U.S. West Texas Intermediate crude oil futures are inching higher on Monday shortly before the New York opening amid hopes that fuel demand in the United States will begin picking up as the country heads into the summer driving season.

There is still optimism over the pace of the vaccination rollout in the U.S. but a temporary shortage in vaccines and increasing COVID-19 case numbers in the U.S. and other countries could be capping gains.

At 09:36 GMT, June WTI crude oil futures are trading $59.49, up $0.14 or +0.24%.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $57.29 will signal a resumption of the downtrend. The main trend will change to up on a move through $62.22.

The minor trend is also down. A trade through $61.75 will change the minor trend to up. This will shift momentum to the upside. A move under $57.68 will indicate the selling is getting stronger.

The main range is $51.04 to $67.29. The market appears to be trying to form a support base inside its retracement zone at $59.17 to $57.25.

The minor range is $57.29 to $62.22. Its 50% level at $59.75 is acting like resistance.

The first short-term range is $66.15 to $57.29. Its 50% level is potential resistance.

The second short-term range is $67.29 to $57.29. Its retracement zone at $62.29 to $63.47 is the primary upside target area and also future resistance.

Daily Swing Chart Technical Forecast

The direction of the June WTI futures contract on Monday is likely to be determined by trader reaction to $59.75 and $59.17.

Bullish Scenario

A sustained move over $59.75 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a near-term surge into $61.72 to $62.29.

Bearish Scenario

A sustained move under $59.17 will signal the presence of sellers. This could generate the downside momentum needed to drive the market into the potential support cluster at $57.29 to $57.25.

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

The Week Ahead – Economic Data, COVID-19, and Corporate Earnings in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 63 stats in focus in the week ending 16th April. In the week prior, 36 stats had been in focus.

For the Dollar:

After a quiet Monday, March inflation figures will get things going on Tuesday. In spite of the FED’s assurances of unwavering support, a pickup in inflationary pressure will be a test for the markets.

The focus will then shift to a particularly busy day on the economic calendar.

Key stats include March retail sales, jobless claims, and Philly FED Manufacturing PMI numbers.

Business inventory and industrial production figures are also due out but will likely have limited impact.

At the end of the week, prelim consumer sentiment figures for April will also draw attention on Friday.

In the week ending 9th April, the Dollar Spot Index slid by 0.92% to 92.163.

For the EUR:

It’s a relatively busy week ahead on the economic data front.

Early in the week, Eurozone retail sales and economic sentiment figures for Germany and the Eurozone will be in focus.

Expect Germany’s ZEW economic sentiment figures to have the greatest impact.

Mid-week, industrial production figures for the Eurozone.

Wrapping up the week, March inflation and trade data for the Eurozone will draw attention.

Other stats in the week include inflation figures for France, Germany, Italy, and Spain. We don’t expect the numbers to have an impact on the EUR, however.

The EUR ended the week up by 1.19% to $1.1899.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Retail sales figures are due out early Tuesday ahead of industrial and manufacturing production figures later in the day.

February trade figures will also be in focus on Tuesday. Expect more interest in the numbers, as the markets look for the effects of Brexit on trade terms.

The Pound ended the week down by 0.90% to $1.3707.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

The markets will have to wait until Thursday for manufacturing sales figures. With little else to consider, the numbers will draw attention ahead of wholesale sales numbers on Friday.

Mid-week, OPEC and the IEA’s monthly report, crude oil inventory numbers will also influence.

From the Bank of Canada, the Business Outlook Survey will provide direction at the start of the week.

Away from the economic calendar, expect economic data from China to also influence…

The Loonie ended the week up 0.38% to C$1.2530 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a busier week ahead.

Key stats include business and consumer confidence figures in the 1st half of the week.

In the 2nd half of the week, March employment numbers are also due out.

Expect plenty of Aussie Dollar sensitivity to the numbers. Business investment and consumer spending are both key to the economic recovery. Any weakening in consumer or business confidence will test support for the Aussie Dollar.

Improving labor market conditions will also be a must.

The Aussie Dollar ended the week up by 0.17% to $0.7623.

For the Kiwi Dollar:

It’s a relatively quiet week ahead.

Key stats include electronic card retail sales and business PMI numbers.

While we can expect the numbers to influence, the RBNZ monetary policy decision is the main event of the week.

With the markets expecting the RBNZ to stand pat, the focus will be on the RBNZ Rate Statement.

The Kiwi Dollar ended the week up by 0.01% to $0.7033.

For the Japanese Yen:

It is a quiet week ahead.

There are no material stats to provide the Yen with direction. The lack of stats will leave the Yen in the hands of market risk sentiment in the week.

The Japanese Yen rose by 0.92% to ¥109.67 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead.

Early in the week trade data for March will be in focus. Expect plenty of interest in the numbers. The markets will be looking for a sustained improvement in trade terms.

At the end of the week, 1st quarter GDP numbers and March industrial production figures will be in focus.

Other stats include retail sales, fixed asset investment, and unemployment figures. While the numbers tend to draw attention, 1st quarter GDP numbers will overshadow these stats at the end of the week.

The Chinese Yuan ended the week up by 0.22% to CNY6.5526 against the U.S Dollar.

Geo-Politics and COVID-19

U.S foreign policy will remain the main area of focus for the markets, with U.S – China relations key.

For the Eurozone, vaccination roll-outs and COVID-19 news updates will also be in focus in the week ahead.

Corporate Earnings

Earning season also kicks off in the week ahead.

Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo are big names delivering results in the week

The Weekly Wrap – A Dovish FED Pegs Back the Greenback

The Stats

It was a relatively quiet week on the economic calendar, in the week ending 9th April.

A total of 36 stats were monitored, following 60 stats from the week prior.

Of the 36 stats, 23 came in ahead forecasts, with 11 economic indicators coming up short of forecasts. There were 2 stats that were in line with forecasts in the week.

Looking at the numbers, 24 of the stats reflected an upward trend from previous figures. Of the remaining 12 stats, 11 reflected a deterioration from previous.

For the Greenback, it was a first weekly loss in 4-weeks. In the week ending 9th April, the Dollar Spot Index fell by 0.92% to 92.163. In the previous week, the Dollar had risen by 0.28% to 93.022.

A dovish FED left the Dollar in the red for the week.

Out of the U.S

It was a quieter week on the economic data front.

Key stats included service sector PMI, factory orders, and weekly jobless claim figures.

It was a mixed set of numbers for the Greenback.

The market’s preferred ISM Non-Manufacturing PMI rose from 55.3 to 63.7 in March. It was the only positive, however.

In February, factory orders fell by 0.8%, partially reversing a 2.7% rise from January.

Jobless claims figures were also disappointing, with initial jobless claims rising from 728k to 744k in the week ending 2nd April. Economists had forecast a fall to 680k.

Other stats in the week included JOLTs job openings, trade data, wholesale inflation, and Markit service PMIs.

These stats had a relatively muted impact on the Dollar and the broader markets, however.

On the monetary policy front, the FOMC meeting minutes reaffirmed FED Chair Powell’s stance on low for longer. Late in the week, Powell also delivered a speech talking of the need for unwavering monetary policy support.

In the equity markets, the NASDAQ rallied by 3.12%, with the Dow and the S&P500 gaining 1.95% and 2.71% respectively.

Out of the UK

It was a quiet week on the economic data front.

Finalized service and composite PMI numbers for March were in focus.

Downward revisions from prelim figures had a relatively muted impact on the Pound, however. Service sector and the broader private sector returned to growth in March, delivering Pound support.

Government plans on easing COVID-19 containment measures thanks to progress on the vaccination front also remained Pound positive.

In the week, the Pound fell by 0.90% to end the week at $1.3707. In the week prior, the Pound had risen by 0.31% to $1.3832.

The FTSE100 ended the week up by 2.65%, reversing a 0.05% loss from the previous week.

Out of the Eurozone

It was another particularly busy week on the economic data front.

Mid-week, service sector PMIs for March were in focus after impressive manufacturing numbers from the week prior.

The stats were skewed to the positive, with only Italy reporting a decline in its services PMI.

For the Eurozone, the composite PMI increased from 48.8 to 53.2, which was up from a prelim 52.5. A return to growth across the private sector came in spite of containment measures across a number of Eurozone member states.

From Germany, factory orders, industrial production, and trade data were also in focus.

Orders rose for a 2nd consecutive month, albeit at a slower pace, driven by domestic demand.

Industrial production and trade data disappointed, however.

Industrial production fell by 1.6% in February, month-on-month, following a revised 2% decline in January. Economists had forecast a 1.5% rise.

In February, Germany’s trade surplus narrowed from €22.2bn to €19.1bn, versus a forecasted narrowing to €20.0bn.

On the monetary policy front, the ECB meeting minutes were also in focus. While highlighting downside risks to the economy near-term, optimism was evident over the medium-term outlook.

In line with Lagarde’s assurances from the press conference, the minutes revealed a plan to ramp up bond purchases in the near-term. The minutes did discussed a quarterly review, however…

For the week, the EUR rose by 1.19% to $1.1899. In the week prior, the EUR had fallen by 0.30% to $1.1759.

The DAX30 rose by 0.84%, with the CAC40 and EuroStoxx600 ended the week with gains of 1.09% and 1.16% respectively.

For the Loonie

It was a busier week.

Trade data for February and March Ivey PMI numbers were in focus mid-week.

The stats were mixed. While the Ivey PMI jumped from 60.0 to 72.9, the trade surplus narrowed from C$1.21bn to C$1.04bn.

At the end of the week, employment figures for March were more significant, however.

Employment surged by 303.1K at the end of the quarter, following an impressive 259.2k jump in February.

The unemployment rate fell from 8.2% to 7.5% as a result of the surge in hiring.

In the week ending 9th April, the Loonie rose by 0.38% to C$1.2530. In the week prior, the Loonie had fallen by 0.01% to C$1.2578.

Elsewhere

It was a relatively bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 9th April, the Aussie Dollar rose by 0.17% to $0.7623, with the Kiwi Dollar ending the week up by 0.01% to $0.7033.

For the Aussie Dollar

It was a particularly quiet week.

There were no material stats to provide the Aussie with direction.

While there were no stats, the RBA was in action early in the week.

In line with market expectations, the RBA stood pat on policy.

The Rate Statement talked of a hold on the cash rate until wage growth is substantially higher and inflation is sustainably within the 2% to 3% target range. According to the statement, the Board does not expect these conditions to be met until 2024 at the earliest.

For the Kiwi Dollar

It was also a particularly quiet week.

There were no material stats in the week to provide the Kiwi with direction.

For the Japanese Yen

It was a relatively quiet week.

At the start of the week, finalized service PMI figures were in focus. In March, the services PMI increased from 46.3 to 48.3, its highest reading since 2020.

In spite of the continued contraction, optimism hit its highest level since 2013 on vaccine hopes.

Household spending figures for February also provided some hope. Month-on-month, spending increased by 2.4%, partially reversing a 7.3% slump from January.

The Japanese Yen rose by 0.92% to ¥109.67 against the U.S Dollar. In the week prior, the Yen had fallen by 0.96% to ¥110.69.

Out of China

It was a relatively quiet week on the data front.

The Caixin Services PMI for March was in focus early in the week.

Following softer growth across the manufacturing sector, service sector activity picked up in March.

The Services PMI rose from 51.5 to 54.3.

At the end of the week, inflation figures also drew attention, with the PMI surveys highlighting a marked increase in input price.

In March, consumer prices fell by 0.5%, reversing a 0.6% increase in February. In spite of the fall in March, inflationary pressure returned. The annual rate of inflation accelerated from -0.2% to 0.4%. Economists had forecast consumer prices to fall by 0.4%, month-on-month, and to rise by 0.3% year-on-year.

Wholesale inflationary pressures surged at the end of the 1st quarter. The producer price index increased by 4.40%, year-on-year, which was well above a forecasted 3.5% increase. The PPI had risen by 1.7% in February.

In the week ending 9th April, the Chinese Yuan rose by 0.22% to CNY6.5526. In the week prior, the Yuan had fallen by 0.40% to CNY6.5670.

The CSI300 slid by 2.45%, with the Hang Seng ending the week down by 0.83%.

Crude Oil Weekly Price Forecast – Crude Oil Flirting With Support

WTI Crude Oil

The West Texas Intermediate Crude Oil market has broken down below the $60 level in order to show signs of weakness again but have also turned around to rally at the last moment to save themselves. At this point, if we break down below the low of the weekly candlestick, it is very likely that we will see a continuation of the downward momentum. At that point, I would fully anticipate that this market goes looking towards the $52.50 level. On the other hand, if we turn around a break above the highs of the last three candlesticks, then it is likely that we go looking towards the highs again, as this is a market that has been very bullish until recently.

WTI Oil Video 12.04.21

Brent

Brent markets also have pulled back during the week, in order to test the bottom of the most recent noisy behavior. At this point, if we break down below the $60 level, I think that the Brent market will break down significantly. If we do get that another five dollars would probably be in order to the downside, possibly even $7.50 after that. To the upside, if we were to break above the highs of the last three candlesticks, then it is likely that oil will continue to go looking towards the $70 level again, which has been so resistant and of course is a large, round, psychologically significant figure. One thing is for sure, this market, much like the WTI market, will be very noisy indeed. With the recent OPEC production increases announce, that could be bearish for this market, but on the other hand you have people hoping for the reflation trade to drive up demand.

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

Crude Oil Price Forecast – Crude Oil Markets Continue to Consolidate

WTI Crude Oil

The West Texas Intermediate Crude Oil market has pulled back ever so slightly during the trading session on Friday to show signs of consolidation yet again. This is a market that has been dancing around the $60 level for several days now, and it now looks as if we are trying to assess whether or not there is going to be more momentum to the upside, or if we break down. Simply put, I believe that if we can break out of this range, then you follow where the market goes next. Breaking above the $62.50 level allows for a move to the $65 level, just as a break down below the $57.50 level opens up a move down to $54 or so.

Crude Oil Video 12.04.21

Brent

Brent markets also have done very little over the last couple of days, so it looks like we are trying to figure out whether or not we are going higher or lower here as well. The 50 day EMA sits just below, so that of course comes into play and could provide a little bit of support, but if we were to turn around a break down below the $60 level, the bottom could fall out in this market. On the other hand, break above the $65 level allows this market to go looking towards the $67.50 level, maybe even the $70 level. Because of this, I think that short-term traders continue to use range bound systems, recognizing that in the short term one can only hope for small little micro movements. However, once we finally do get this thing moving, we have a couple of obvious destinations.

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

Oil Price Fundamental Daily Forecast – Prices Being Capped by Rising Global Supply Concerns

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Friday, pressured by a slight recovery in the U.S. Dollar. Crude oil is dollar-denominated so it tends to weaken because of lower foreign demand when the greenback rises. Traders are also expressing some concerns over rising global supplies and lower demand because of lingering COVID-related issues.

At 12:56 GMT, May WTI crude oil futures are trading $59.26, down $0.34 or -0.57% and June Brent crude oil is at $62.73, down $0.47 or -0.74%.

Dollar Steadies after Week of Declines

The dollar is recovering slightly on Friday but was still heading for its softest week of the year after surprisingly weak U.S. jobs figures the previous day and ongoing loose Federal Reserve policy prompted investors to trim their bets. This may be helping to pressure crude oil today, but it didn’t help throughout the week as the greenback is on track for a nearly 1% weekly fall against a basket of major currencies.

IMF Sees Stronger Global Growth

It didn’t help much to rally the markets but it may be slowing down the selling pressure, but the International Monetary Fund said earlier in the week that unprecedented public spending to fight COVID-19 would push global growth to 6% this year, a rate not achieved since the 1970s. This should have underpinned prices because it provides a bullish narrative for fuel demand. Traders seemed to ignore the news because the next day, the new issue became higher supplies.

Energy Information Administration Weekly Inventories Report

The crude oil portion of the EIA report was friendly, but higher gasoline stocks capped any potential gains.

U.S. crude oil stockpiles fell more than expected last week, while gasoline inventories jumped sharply as refining rates rose to the highest in over a year, the Energy Information Administration said on Wednesday.

Crude inventories fell by 3.5 million barrels in the week to April 2 to 501.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.4 million-barrel drop. Stocks in the Midwest fell to their lowest since March 2020.

U.S. gasoline stocks rose by 4 million barrels in the week to 230.5 million barrels, compared with forecasts for a 221,000-barrel drop. With summer driving season approaching, the expectation is that gasoline inventories will soon start to recede, but that hasn’t happened yet.

Distillate stockpiles, which include diesel and heating oil, rose by 1.5 million barrels to 144.1 million barrels, versus expectations for a 486,000-barrel rise.

Refinery crude runs rose by 103,000 barrels per day and utilization rates edged up 0.1 percentage point, and are now running at 84% of capacity, their highest since March 2020. Additionally, Net U.S. crude imports fell last week by 141,000 bpd, while crude production fell 200,000 bpd to 10.9 million bpd.

Rising Global Supplies Becoming a Concern

While crude stocks in the United States fell more than forecast by analysts, gasoline inventories jumped sharply, also against expectations, the Department of Energy said on Wednesday.

At the same time, supply is rising across the world with Russian output increasing from average March levels in the first few days of April, traders said. Additionally, Iran may see some sanctions lifted, which would add to global supplies, with the U.S. and other powers holding talks on reviving a nuclear deal that almost stopped Iranian oil from coming to market.

Daily Forecast

WTI prices are once again testing a retracement zone at $59.58 to $57.64. This zone has provided support for about three weeks. Needless to say, trader reaction to this zone will set the near-term tone.

A rally over $59.58 will indicate the return of buyers, but gains are likely to be limited by $62.52 – $63.76.

A trade through $57.06 will send a bearish signal. It’s a potential trigger point for an acceleration to the downside with $51.37 the next major target.

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

Stocks Mixed As Treasury Yields Move Higher Ahead Of The Weekend

Treasury Yields Rebound As Bond Traders Remain Worried About Inflation

S&P 500 futures are swinging between gains and losses in premarket trading while traders monitor the recent developments in U.S. government bond markets.

Yesterday, it looked that Fed Chair Jerome Powell managed to calm bond investors, and Treasury yields were moving lower. Today, the bond market is once again worried about inflation, and Treasury yields are increasing.

Currently, the yield of 10-year Treasuries is trying to settle above 1.67%. Higher yields have already put pressure on tech stocks which are losing some ground in premarket trading.

Gold and silver are also under pressure as higher yields and stronger U.S. dollar serve as bearish catalysts.

Oil Moves Lower Amid Progress In Iran Nuclear Talks

WTI oil is currently trying to settle below the 50 EMA at $59.20 as traders react to the latest news about Iran nuclear talks. Russia and China noted that progress has been made, and talks will resume next week.

The aim of the current talks is to bring Iran and U.S. back to the negotiation table so that U.S. lifts sanctions and Iran returns back into compliance with the nuclear deal.

The potential return of Iranian oil is a bearish caalyst for the oil market. However, it should be noted that it is not clear whether Iran and U.S. will be able to reach any deal as both sides distrust each other.

U.S. Dollar Gains Ground At The End Of A Challenging Week

U.S. dollar was under pressure this week as Treasury yields moved lower and investors’ risk appetite increased which was bullish for riskier currencies.

However, the U.S. dollar managed to gain some upside momentum at the end of the week as foreign exchange market traders focused on the relative strength of the U.S. economy.

If the American currency manages to get back to the upside mode, commodity markets will find themselves under pressure which will be bearish for commodity-related stocks.

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

Crude Oil Price Update – Could Weaken Under $59.58, Strengthen Over $59.95

U.S. West Texas Intermediate crude oil futures are trading flat early Friday, supported by a weaker U.S. Dollar and capped by worries over rising supplies and the impact on fuel demand from the COVID-19 pandemic. A weaker dollar makes oil cheaper for holders of other currencies, which usually helps boost crude prices.

At 06:46 GMT, May WTI crude oil is trading $59.54, down $0.06 or -0.10%.

The May futures contract is on pace to post a 2% – 3% loss this week after a decision by OPEC and its allies, including Russia, to gradually increase supplies by 2 million barrels per day between May and July.

Rollover to the June WTI crude oil futures contract on Monday.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $57.25 will signal a resumption of the downtrend. The main trend will change to up on a move through $66.44.

If sellers take out $57.63 then $62.27 will become a new main top.

The main range is $51.37 to $67.79. The market is currently testing its retracement zone at $59.58 to $57.64.

The minor range is $62.27 to $57.63. Its 50% level at $59.95 is potential resistance.

The first short-term range is $66.44 to $57.25. Its 50% level at $61.85 is another resistance level.

The second short-term range is $67.79 to $57.25. Its retracement zone at $62.52 to $63.76 is another resistance zone.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Friday is likely to be determined by trader reaction to $59.95 and $59.58.

Bullish Scenario

A sustained move over $59.95 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a potential acceleration to the upside with the next target a resistance cluster at $61.75, $61.85, $62.27 and $62.52.

Bearish Scenario

A sustained move under $59.58 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at $57.64, $57.63, $57.25 and $57.06. The latter is a potential trigger point for an acceleration to the downside.

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

Crude Oil Price Forecast – Crude Oil Continues to Test Trendline

WTI Crude Oil

The West Texas Intermediate Crude Oil market has gone back and forth during the course of the trading session on Thursday, as we continue to see a lot of questions about where we go next. That being said, the market is likely to continue to see a bit of a hesitation to make a move but looking at the uptrend line and the 50 day EMA converging just below the $60 level suggests that we are eventually going to see an explosive move as the market gets squeezed.

If we break down below the uptrend line, then it is likely that the market could go looking towards the $54 level, perhaps even down to the $50 level. On the other hand, if we can turn around a break above the $62.50 level, then crude oil will continue to reach towards the $65 level.

Crude Oil Video 09.04.21

Brent

Brent markets did very little during the session as well, as we hang right around the 50 day EMA again. The uptrend line of course is an area that a lot of people will be paid attention to, so just like the WTI market, I think there is a lot of noise waiting to jump into the market and call some type of squeeze. If we break down, the $55 level would be the target, and it is worth noting that the 200 day EMA is sitting just in that area. On the other hand, if we break above the $65 level, then it is likely that the market goes looking towards the $67.50 level, possibly the $70 level.

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