2024-01-11 15:30

Crude Oil Price Analysis and Charts • Crude oil prices have risen by more than $2/barrel • News of another tanker seizure brought buyers out • Chinese trade numbers Friay may bring focus back to economic woes Crude Oil prices rose quite sharply in Asian and European trade on Tuesday as signs of increasing geopolitical tensions in the Middle East brought out buyers. The United Kingdom’s monitoring Maritime Trade Operation reported early in the session that a Marshall-Islands-flagged oil tanker had been boarded and taken over by uniformed men in the Gulf of Oman, with other reports suggesting that Iran had claimed responsibility. The situation remains unclear, however, and what links there may be between this action and the shooting down of Houthi drones by the United States and UK this week is still unknown. Even so, the energy market remains nervous, unsurprisingly, given the pivotal importance of the region to global energy supply. The price of US benchmark West Texas Intermediate crude rose by more than $2/barrel in Europe. Supply uncertainties sparked by the ongoing conflict between Israeli forces and Hamas in Gaza have seen prices shake out of the downtrend that began back in October. Even so, the market remains concerned about end-user demand, especially from major importer China which remains mired in a nasty if patchy economic slowdown, deflation, and all. While the prospect of lower borrowing costs and victory in the US inflation fight might seem bullish for the energy market, it’s far from clear how soon and how deep rate cuts there will be. Headline inflation ticked up a little in December, according to official figures Thursday and, while the more important core rate continued to relax, even that came in above forecasts. The market is also looking at a steady growth in available oil supply from countries outside the Organization of Petroleum Exporting Countries and its associate member states. Indeed, despite some current price vigor it’s not hard to find a lowered forecast these days. Reuters reported on Thursday that Barclays had lowered its 2024 Brent benchmark forecast by $8 to $85/barrel. That doesn’t imply a lot of upside this year, given that prices are already at $78. The next scheduled major event for this market will be official Chinese trade numbers. They’re coming up on Friday. Learn How to Trade Oil: US Crude Oil Technical Analysis US Crude Oil Daily Chart Compiled Using TradingView Prices have overcome the top of their previously dominant broad downtrend channel, but they haven’t yet done so very convincingly and there could be more bad news for bulls in the chart. The conjunction of lower highs and higher lows that form a classic ‘pennant’ formation is starting to become clearer in the price action. The pennant is what’s known as a continuation pattern which means that the previous trend is likely to reassert itself once the formation plays out. Clearly, this would mean that the former downtrend takes control again. Of course, these things aren’t infallible and, combined with elevated fundamental uncertainty, it might be advisable to wait and see how this particular pennant fades out before getting too involved in the market. If bulls can arrange a break above the latest downtrend line, and, perhaps, a return to December 26’s intraday high of $76.01, that might be a sign that there’s a bit more upside fight in prices than there now seems. However, a slide back into the old downtrend which now offers support at $70.94 looks a bit more likely and could be more obviously bearish, with psychological support at the $70 figure awaiting below.Bulls may draw some comfort from the fact that WTI looks in no way overbought yet, with the Relative Strength Index hovering at a relaxed 50 or so. That indicator doesn’t trigger a warning of extreme overbuying until it gets up to 70. IG’s own sentiment data finds traders very bullish at current levels, clearly sharing the broader market’s geopolitical concerns. However, with fully 84% now long, the lure of the contrarian, bearish trade will probably only get stronger. --By David Cottle for DailyFX https://www.dailyfx.com/news/crude-oil-prices-gain-as-iran-seizes-tanker-off-yemen-china-trade-data-eyed-20240111.html

2024-01-11 13:50

US Inflation Rises in December December reveals hotter inflation – base effects to be considered Immediate market reaction from USD, gold and S&P 500 futures December Reveals Hotter Inflation - Base Effects to be Considered December brought about hotter-than-expected headline and core inflation in the US. Headline revealed a 3.4% increase compared to the same period last year, surpassing the 3.2% expected and the prior 3.1% rise in November. Core inflation only just managed to break below the stubborn 4% mark (3.9%). Given the underlying base effects it isn’t entirely a surprise to see inflation coming in higher but year on year case effects are likely to see both figures moving lower again from January onwards. Immediate Market Reaction: S&P 500 Futures, US Dollar Basket, and Gold The market reaction to the hotter-than-expected data was largely contained as it had been expected to some degree. S&P 500 E-mini futures dropped initially but has recovered to trade near flat ahead of the US market open. The US dollar has held onto much of its initial move, rising 0.5% since the release. The dollar has recovered some of its losses from the backend of last year but has struggled to see further bullish momentum really take shape. Gold moved higher but also recovered in the aftermath of the release to trade up on the day thus far. The precious metal still supported by aggressive rate cut expectations and easing bond yields. Safe haven appeal adds to the allure and the threat of rising real interest rates gets put on the backburner with inflation edging up. Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/us-breaking-news-core-and-headline-cpi-rise-dxy-gold-reaction-20240111.html

2024-01-11 12:30

Article by IG Chief Market Analyst Chris Beauchamp Dow Jones, DAX 40, Nasdaq 100, Analysis and Charts Dax maintains upward move The index continued to push higher on Wednesday, helping to shrug off Tuesday’s indecisive session, though a fresh push to the previous highs still eludes it. However, further short-term gains above 16,800 will reinforce the short-term bullish view and see the 17,000 area tested once again. Above this, the index will sit at new record highs. A reversal back below 16,500 is needed to indicate that a deeper pullback is in play. DAX 40 Daily Chart Dow continues to climb A further strong day on Wednesday built on Monday’s rally, and now the index seems set to target new all-time highs. The risk, however, is that the US inflation report this afternoon is stronger than expected. Given the scale of the gains made since October, the index remains vulnerable to a medium-term pullback. Indeed, one might be viewed as healthy, providing some corrective action to an index that has barely stopped moving higher since the beginning of November. A reversal back below 37,200 would likely mark the catalyst for additional short-term downside. DowJones Daily Chart Nasdaq 100 rising ahead of inflation data This index finds itself on its way to the 17,000 level again, unless a bearish reaction to this afternoon’s CPI comes into play.Above 17,000 will see the index back at record highs. Bullish momentum has reasserted itself this week, bringing an end to the early January pullback. A reversal and closeback below 16,100 would be needed to revive the short-term bearish view. Nasdaq 100 Daily Chart https://www.dailyfx.com/news/dax-dow-and-nasdaq-100-in-strong-form-ahead-of-us-inflation-20240111.html

2024-01-11 11:16

Pound Sterling Price Action Ahead of US CPI Major evet risk is upon us: US CPI, UK GDP GBP/JPY exhibiting a bullish stance, eying 2015 high GBP/USD consolidates ahead of top event risk – seeking direction EUR/GBP triangle pattern reveals tendency for mean reversion Major Event Risk is Upon us: US CPI, UK GDP The last three trading days have been building up to today and arguably tomorrow for sterling pairs. US CPI for December is anticipated to reveal a step lower in core inflation while the headline measure is expected to rise ever so slightly. Something to consider in the coming months is the shipping disruptions taking place in the Red Sea, which is likely to see shipping companies pass on the higher security/rerouting costs to the end consumer which would show up in future CPI figures. Looking ahead to today’s US CPI print, it is difficult to envision a scenario where potentially hotter inflation results in a stronger dollar with any momentum. The disinflation process is well underway in America and any lingering price pressures are likely to fall away due to base effects. UK GDP on Friday is likely to make for some grim reading, with anaemic growth expected in November, with the three-month average turning negative (-0.1%). GBP/JPY Exhibiting a Bullish Stance, Eying 2015 High The pound has displayed differing performance depending on which currency you pair it with. In this case, GBP/JPY has performed rather well since the test of the 200 simple moving average (SMA) and the 78.6% Fibonacci retracement of the major 2015 to 2016 decline (179.82). Fundamentally, the case for a policy reversal in Japan has subsided after analysing weaker CPI and wage data, seeing the yen surrender a portion of its multi-month gains. GBP/JPY has since validated the bullish advance via yesterday’s strong green candle, emanating from the bull flag pattern. Prior resistance at 184.00 now turns to support with the 2015 level of 188.80 comes into focus as resistance. The RSI approaches overbought territory but reveals there is still some room to trade higher before overheating. Today the pair is slightly softer and a move back towards 184.00 may present a better opportunity for GBP/JPY bulls to assess potential long entries. GBP/JPY Daily Chart Source: TradingView, prepared by Richard Snow GBP/USD Consolidates Ahead of Tier 1 Event Risk – Seeking Direction While GBP/JPY presents a case for a potential bullish bias in sterling, GBP/USD appears at a crossroad where the future direction is rather unclear. The pair has achieved higher highs and higher lows – the very definition of an uptrend but the gradient of the move has levelled out over the last six weeks. The late December swing high of 1.2828 is yet to be approached and resistance has appeared around 1.2770 evidenced by a number of upper wicks at this region on the daily candles. Perhaps a softer than expected CPI print could do the trick but the pair looks in real need of momentum one way or another to break out of this consolidatory pattern. Prices trade above the 50 and 200 SMA and the very same lagging indicators have revealed a ‘golden cross’ – a typically bullish phenomenon for trend traders. Failure to retest the swing high may see gravity take effect, pulling the pair towards 1.2585 before assessing the next move. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow EUR/GBP Triangle Pattern Reveals a Tendency for Mean Reversion GBP/JPY presents a bullish case for the pound, GBP/USD a mixed (range bound opportunity) and now EUR/GBP presents a more bearish view of sterling. When viewing the pair with a medium-term lens, a triangle pattern can be seen after connecting the highs and lows. Prior moves from the top of the pattern towards the bottom, and visa-versa, have been extreme and as the pattern narrows these may become more short-lived. Now if you zoon out even further, it becomes clear that EUR/GBP has traded either side of the 0.8635 level which almost acts as a line of best fit as it intersects price action horizontally. Prices have recently bounced off the upward sloping trendline support, towards the significant 0.8635 level and potentially even approach the upper trendline acting as resistance. For now however, 0.8635 and the 200 SMA remain key hurdles to overcome EUR/GBP Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/pound-sterling-price-action-setups-gbp-jpy-gbp-usd-eur-gbp-20240111.html

2024-01-11 09:01

EUR/USD Forecast - Prices, Charts, and Analysis Core inflation lower, headline inflation higher. EUR/USD daily chart remains positive. The main economic release of the week, US CPI, will hit the screens today at 13:30 UK and will likely spur a round of volatility in what has been a quiet FX market so far this year. Headline inflation (y/y), currently at a five-month low, is seen ticking up by 0.1% to 3.2% on stubborn energy prices, while core inflation (y/y) is seen falling to 3.8% from 4.0% in November. EUR/USD is trying to push higher ahead of the US data. The daily chart shows that a series of higher lows and higher highs that started in early October remains in place, with a trade above the December 28th high at 1.1138 needed to keep the trend going. The early January Golden Cross is providing support while the CCI indicator sits in neutral territory. EUR/USD needs to make a confirmed break above the 20-day simple moving average, currently at 1.0981, to keep pressing higher towards the 1.1075-1.1100 zone. EUR/USD Daily Chart Chart Using TradingView IG retail trader data show 43.22% of traders are net-long with the ratio of traders short to long at 1.31 to 1.The number of traders net-long is 12.07% lower than yesterday and 15.16% lower than last week, while the number of traders net-short is 10.15% higher than yesterday and 19.62% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/euro-eur-outlook-eur-usd-remains-in-thrall-to-upcoming-us-inflation-data-20240111.html

2024-01-11 01:30

GOLD PRICE, NASDAQ 100, US DOLLAR FORECAST: The December U.S. inflation report will steal the limelight on Thursday While core CPI is seen moderating on a year-over-year basis, the headline gauge is expected to reaccelerate, creating a headache for the Fed Gold prices, yields, the U.S. dollar and the Nasdaq 100 will be quite sensitive to the consumer price index data Most Read: US Dollar, Yields Mixed Before US CPI, Setups on EUR/USD, GBP/USD, Nasdaq 100 Wall Street will be on high alert on Thursday when the U.S. Bureau of Labor Statistics releases its latest consumer price index report, as the data could guide the Federal Reserve's next moves in terms of monetary policy and, therefore, the timing of the first interest rate cut. December headline CPI is seen increasing 0.2% m-o-m, pushing the annual rate to 3.2% from 3.1% - a setback for the Fed, whose goal is to return inflation to 2.0% over the long term. The core gauge, for its part, is forecast to have risen 0.3% m-o-m, with the 12-month related reading easing to 3.8% from 4.0% previously. US INFLATION TREND Source: BLS To gauge potential market response, it's crucial to watch how the inflation figures match up against consensus estimates, keeping in mind two possible scenarios: an upside surprise in the data or lower-than-projected numbers. EXPECTATIONS FOR DECEMBER INFLATION DATA A hot CPI report that surpasses forecasts will likely prompt traders to unwind dovish bets on the Fed’s path, sending Treasury yields and the U.S. dollar sharply higher. This outcome will be bearish for gold as well as stocks, potentially delivering an unexpected blow to the S&P 500 and Nasdaq 100. Conversely, a benign report on consumer prices with milder-than-anticipated figures, especially on core metrics, may validate aggressive wagers on rate reductions in 2024, setting the stage for yields and the greenback to resume their slump. This scenario would be bullish for gold and risk assets. Markets are currently pricing in about 130 basis points of easing for this new year, but with the U.S. economy holding up remarkably well and showing signs of stabilizing, the FOMC will be reluctant to slash borrowing costs meaningfully, especially if price stability remains elusive. It is for this reason that the December CPI report will take on added significance this time around. 2024 FED FUNDS FUTURES IMPLIED RATES Source: TradingView https://www.dailyfx.com/news/usd-inflation-preview-how-will-gold-prices-nasdaq-100-and-the-us-dollar-react-20240111.html