2024-01-17 16:00

Crude Oil Price, Analysis and Charts Crude prices shed more than a dollar after the China data The market faces multiple uncertainties, as its pricing reflects Near-term falls look more likely. Crude oil prices fell by more than a dollar per barrel on Wednesday as China’s growth data disappointed, raising more worries about end-demand for energy. The world’s number two economy expanded by an annualized 5.2% in the final quarter of 2023. This was only a tick below expectations but, given weak rises in household income and clear pressure on consumer sentiment, that was enough to hit oil prices. The United States West Texas Intermediate benchmark slid by $1.35, with a fall of similar magnitude hitting international bellwether Brent. The crude oil market faces a period of unusual fundamental uncertainty, even by its own standards, which is unsurprisingly also reflected in the technical picture. While there are some obvious tailwinds for prices, some of them come with caveats that make the picture hard to read. On the supply side, major producers in the Organization of Petroleum Exporting Countries and its allies are likely to extend and perhaps even increase their production cuts out into this new year. However, even if they do so, signs of surging oil supply from outside this powerful group may blunt the ability of its cuts to support prices. For example, US domestic oil production soared to record levels in late 2023, helped by advances in shale oil drilling in the key Permian Basin region. Other producers such as Guyana have also seen output rise. In short, the crude market is no longer OPEC’s to command as it has been in the past. Conflict in Ukraine and Gaza will only add to uncertainties for as long as it rages, with the oil market paying particular attention to the current attacks on shipping from Yemeni rebels. Its tankers remain in the firing line and, unlike the freight carriers, cannot simply avoid this crucial oil-producing region even if those headed for Europe can be expensively diverted around Africa. Similarly, on the demand side, there’s some hope that the US, at least, will recover sharply if interest rates come down as expected. But China’s economy remains constrained, as the latest data underline. The 6%-plus growth rates of the pre-pandemic era look unlikely to return any time soon. Crude Oil Prices Technical Analysis WTI Daily Chart Compiled using TradingView Crude prices have been confined to a narrowing daily range, which is understandable given the fundamental backdrop. The pennant formation on the daily chart notable last week remains in place despite a brief intraday probe above it on January 24. The pennant is known as a continuation pattern which means that the market is likely to resume its previous behavior once the formation breaks. This would be bad news for bulls, as there has been a strong downtrend in place since September. For now, the pennant offers resistance at $73.20 and support at $70.34. There is more pressure on the downside now as Wednesday’s falls have seen previous support around the $72 handle taken out quite convincingly. Further slides will see the $71.08 region come into focus. That was December 12’s intraday low and also the lowest point for the market since late June 2023. The oil market’s next data focus will be on US stockpile levels for the week ending January 12. They’ll be released by the Energy Information Administration on Thursday, and a 2.4 million barrel crude drawdown is expected. --By David Cottle for DailyFX https://www.dailyfx.com/news/crude-oil-price-wilts-as-china-growth-falls-short-us-inventory-eyed-20240117.html

2024-01-17 15:00

AUD, CNH, SSE Composite Index Analysed Chinese economic growth fails to impress – meets conservative yearly target set out by offcials SSE Composite Index sell-off surpasses prior low with little chance of reversing fortunes High ‘beta’ Australian dollar appears vulnerable amidst a general decline in glonbal indices The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library China’s economy grew by a modest 1% quarter-on-quarter (QoQ) in the three month period between October and December, and rose 5.2% when compared to Q4 of last year, to end 2023 having achieved growth of 5.2% - meeting the conservative target set by Chinese officials. A similar target is anticipated for 2024 as challenges around deflation, weak demand and an ailing property sector continue to weigh on the world’s second largest economy. The prospect of further policy easing becomes more and more likely but any changes to the interest rate could see the yuan depreciate even further than what we have seen playing out in January thus far. SSE Composite Index sell-off surpasses prior low with little chance of reversing fortunes The Chinese index sold off on Wednesday amid the disappointing growth data, likely charting a new path to the downside. looking at the weekly chart, price action fell beyond the major low of April 2022 with the March 2020 low next insight. the Chinese economy has been plagued by the deteriorating property sector, worsening aggregate demand and deflation. it is now widely believed that Chinese officials will has to come to the rescue and provide sufficient stimulus to support the Chinese economy in 2024. However, cutting interest rates will leave the local currency vulnerable after already depreciating against the dollar since the turn of the new year. Policy setters may also consider adjusting banks’ reserve ratio requirements but ultimately the market appears dissatisfied with existing stimulatory efforts. SSE Composite Index Weekly Chart Source: TradingView, prepared by Richard Snow High ‘Beta’ Australian dollar appears vulnerable amidst a general decline in global indices The Australian dollar, not to long ago, was propped up by two factors which have subsequently reversed. the first was the increasing expectation around Fed rate cuts in 2024 and the second was the lingering threat of rising Australian inflation at a time when other countries had already seen massive improvement on this front. Fast forward to today and stubborn inflation in the EU, US and UK, particularly in December, has caused a general repricing in bond markets as expectations around the timing of interest rate cuts have been pared back. With rate cut expectations easing, the US dollar has picked up a bid in recent trading sessions forcing AUD/USD to break beneath the ascending trend line - which has been acting as support - as well as the 0.6580 level. There can be little doubt that today's Chinese growth data played a part in the continued selling which has now breached the 200-day simple moving average, on the cusp of oversold territory. the challenge here is to assess whether the majority of this move has already played out and given the fact that we are nearing oversold territory it may be more prudent to monitor a potential pullback from such overheated levels before considering bearish continuation plays. Nevertheless, the ‘high beta’, procyclical Australian dollar reveals further vulnerability by virtue of its relationship with the S&P 500 - as it tends to rise and fall in a similar fashion. Major equity indices have turned lower recently while the S&P 500 holds up pretty well considering. Keep in mind rising geopolitical uncertainty, a stronger dollar and a recent rise in US yields does pose somewhat of a headwind for the index ahead of the mega-cap US earnings which is set to get underway next week. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/lacklustre-chinese-growth-complicates-the-aussie-dollar-outlook-20240117.html

2024-01-17 11:30

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, DAX 40, Nasdaq 100 Analysis and Charts FTSE 100 falls out of bed as UK inflation unexpectedly rises The FTSE 100, which on Tuesday slid through the 200-day simple moving average (SMA) at 7,570, opened much lower on Wednesday as UK inflation came in at a stronger-than-expected 4.0% in December and core inflation at 5.1%. The 7,450 mark is in sight, below which the early October low and the late November low can be found at 7,384 to 7,383. Minor resistance sits at the 11 December low at 7,493 and can be seen around the minor psychological 7,500 mark. FTSE 100 Daily Chart Retail trader data shows 66.70% of traders are net-long with the ratio of traders long to short at 2.00 to 1 - What does this mean for FTSE 100 Traders? DAX 40 drops to six-week low The DAX 40 index is on track for its third consecutive day of falls and is now trading at six-week lows amid hawkish central bank talk and as rate cut expectations are being pared back. The 55-day simple moving average (SMA) at 16,294 represents the next downside target while the early January and Tuesday’s lows at 16,444 to 16,471 are expected to act as minor resistance. While no bullish reversal and rise above Thursday’s low at 16,535 is seen, the medium-term trend continues to point down. DAX 40 Daily Chart Nasdaq 100 expected to open lower The Nasdaq 100 remains under pressure amid mixed US earnings and a speech by US Federal Reserve (Fed) governor Waller in which he advocated moving ‘carefully’ with rate cuts and mentioned reducing quantitative tightening but didn’t give a timeline. Tuesday’s low at 16,674 may be revisited, a slip-through which would engage the 11 January low at 16,614 and perhaps also the 20 December low at 16,552. In case of a rebound, minor resistance between Friday and Monday’s lows at 16,726 to 16,743 may stall the index. If not, last and this week’s highs at 16,897 to 16,912 might remain in play. Nasdaq 100 Daily Chart Learn how to build confidence in trading with our complimentary guide. https://www.dailyfx.com/news/ftse-100-dax-40-and-nasdaq-100-slide-amid-pared-back-rate-cut-expectations-20240117.html

2024-01-17 09:11

UK CPI, Pound Sterling Analysis Headline and core measures of inflation surprise to the upside Temporary price pressures unlikely to challenge the Bank of England’s resolve Pound sterling catches a bid after hotter CPI prints, US retail sales and Fed speak up next The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Headline and Core Measures of Inflation Surprise to the Upside The headline measure of inflation rose from 3.9% to 4) in the month of December while the core measure (inflation excluding volatile items like food and energy) remained at 5.1% - beating the 4.9% forecast. Learn how to prepare for major data releases along with crucial risk management considerations: Taking a more granular look at some of the main contributors to the year-on-year rise in inflation for December, we can see that alcohol and tobacco provided the largest positive impact to the index while food and non-alcoholic beverages saw the largest drop off. Alcohol and tobacco attracted higher prices due to the rise in tobacco duty announced by the UK government in the Autumn Statement. Source: Office for National Statistics (ONS), prepared by Richard Snow Temporary Price Pressure Unlikely to Challenge the Bank of England’s Resolve The hotter December inflation prints do not signal an overall rise in the component categories that make up headline and core CPI figures - which points to continued progress in getting inflation down to 2%. Energy costs have been plummeting as fuel and gas prices have long been in decline, although, a temporary rise in energy prices is possible if security concerns along the Red Sea shipping route lead to delays. For, example, just yesterday Shell announced it will halt all shipping via the Red Sea in response to the recent Houthi attacks on shipping vessels. On the whole, the story remains the same. The UK is expected to witness further progress in the fight against inflation with services inflation remaining a concern for the Bank of England. The red line in the chart below reveals a flattening out of not only services inflation but also headline and core measures as a whole. Yesterday, UK average earnings figures declined but remain fairly elevated. Source: Refinitiv Datastream, LSEG - prepared by Richard Snow Immediate Market Response: GBP Pairs, FTSE The pound sterling rose in response to the elevated inflation numbers in what has been a UK-focused week as far as the data is concerned. The FTSE opened lower but when viewed in context, the index has come under pressure over the last few trading sessions as global indices taper off. Geopolitical tensions have been on the rise (Red Sea saga) and markets are beginning to cool expectations around interest rate cuts for 2024 – removing some of that bullish support for riskier equity markets. Next up is US retail sales data for the festive December period, followed by a number of Fed speakers. GBP/USD, GBP/JPY, EUR/GBP and FTSE 5-Minute Charts Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/uk-breaking-news-cpi-surprises-to-the-upside-lifts-sterling-20240117.html

2024-01-17 00:00

GOLD PRICE FORECAST Gold prices slump, dragged lower by the rebound in U.S.Treasury yields and the strength of the U.S. dollar The precious metal’s outlook is starting to become less bullish This article looks at XAU/USD’s key levels to watch in the upcoming trading sessions Most Read: US Dollar Reclaims Throne; EUR/USD, GBP/USD, AUD/USD Tank as Sentiment Sours Volatility increased on Tuesday as U.S. markets reopened after Monday's Martin Luther King, Jr. holiday. The trading session saw U.S. Treasury rates blast higher, with the 10-year bond climbing above the psychological 4.0% - a move that boosted the U.S. dollar against most peers. The rally in the U.S. dollar, coupled with soaring yields, also dealt a blow gold (XAU/USD), pushing its prices more than 1.25% lower on the day and prompting many investors to reassess the bullish outlook for the precious metal, which became a consensus trade following the Federal Reserve's pivot at its December meeting. The catalyst for Tuesday's moves was a reassessment of the Fed's monetary policy after expectations shifted away from fundamentals and became extremely dovish recently. Comments from Fed Governor Christopher Waller that policymakers should not rush to slash rates until it is clear that lower inflation can be sustained reinforced market dynamics, further weighing on bullion. With the U.S. economy holding up exceptionally well and progress on disinflation stalling, the U.S. central bank will be reluctant to ease its stance materially this year, as looser financial conditions could complicate the path to price stability. Once Wall Street recognizes this reality, traders could start unwinding deep interest-rate cut bets, bolstering the greenback’s recovery – a bearish outcome for gold. GOLD PRICE TECHNICAL ANALYSIS Gold plunged on Tuesday, completely erasing last month's gains and inching ever closer to the 50-day simple moving average, a key support indicator located slightly above the $2,010 area. Bulls must defend this technical floor tooth and nail; failure to do so could trigger a move towards $1,990, followed by $1,975. On the flip side, if buyers return and spark a bullish reversal, resistance emerges at $2,045-$2,050. Taking out this ceiling decisively could be difficult, but a breakout could create the right conditions for a rally toward $2,085, the late December peak. On further strength, XAU/USD could be on its way to retesting its record. Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/xauusd-gold-prices-in-turmoil-as-treasury-yields-rebound-and-us-dollar-dominates-20240117.html

2024-01-16 18:00

Most Read: US Dollar Forecast: Reversal Possible; Setups on EUR/USD, USD/JPY, GBP/USD The U.S. dollar strengthened against its top peers on Tuesday, supported by higher U.S. Treasury yields, as markets tempered bets for a March interest rate cut, with odds of the event falling below 59% from 77% just one day ago. The move was reinforced after Fed Governor Christopher Waller said the FOMC does not need to ease its stance as quickly as in the past, a sign that policymakers intend to proceed with caution. Against this backdrop, the euro, British pound and Australian dollar fell sharply against the greenback, breaking important thresholds during the pullback. FED MARCH MEETING PROBABILITIES Source: CME Group In this article, we focus on the technical outlook for EUR/USD, GBP/USD and AUD/USD, analyzing market sentiment and price action dynamics. EUR/USD TECHNICAL ANALYSIS EUR/USD sank on Tuesday, breaching the lower boundary of a short-term rising channel at 1.0930 and moving towards the 200-day simple moving average positioned just above 1.0840, which represents the next crucial support to monitor. It is imperative for this area to be maintained; failure to do so may result in a retracement towards 1.0770. On the contrary, if the downward pressure begins to ease and prices rebound in the upcoming trading sessions, technical resistance looms at 1.0930, followed by 1.1020. Should market strength persist, attention could shift towards 1.1075/1.1095, and subsequently, 1.1140. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView GBP/USD TECHNICAL ANALYSIS GBP/USD also took a sharp turn to the downside on Tuesday, breaking through channel support and descending towards the 50-day simple moving average located around the 1.2600 level. Cable is likely to establish a base in this region before rebounding, but a breakdown could expose the 200-day simple moving average. On the flip side, if buyers resurface and spark a bullish reversal, initial resistance lies at 1.2675, followed by 1.2780. Sellers must resolutely protect this technical ceiling; any failure to do so might trigger an upward movement towards the December peak situated above the 1.2800 handle. GBP/USD TECHNICAL CHART GBP/USD Chart Prepared Using TradingView Want to know how to trade the Australian Dollar? Get the "How to Trade AUD/USD" guide for expert insights and strategies! AUD/USD TECHNICAL ANALYSIS AUD/USD has slumped in recent weeks, with prices currently sitting above cluster support near 0.6570, where the 200-day SMA aligns with a long-term trendline and the 50% Fib retracement of the Oct-Dec rally. Maintaining this area is crucial; any inability to do so could trigger a descent towards 0.6525, followed by 0.6500. On further weakness, all eyes will be on 0.6460. On the other hand, if buyers stage a comeback and propel the exchange rate higher, resistance appears at 0.6635 and 0.6685 thereafter. The bulls will have a hard time pushing prices above this barrier, but a successful breakout could pave the way for a rally toward 0.6825. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-reclaims-throne-eur-usd-gbp-usd-aud-usd-tank-as-sentiment-sours-20240116.html