2024-03-22 14:00

Brent Crude Oil News and Analysis Over 150 missiles and drones fired in latest attack on Ukraine Oil prices ease into the weekend despite attacks on energy infrastructure IG client sentiment focuses on recent changes in positioning to arrive at bearish bias The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Over 150 Missiles and Drones Fired in Latest Attack Over the past 24 hours, the escalating conflict between Russia and Ukraine has taken a significant toll on energy infrastructure in both countries. In Ukraine, a series of Russian missile strikes targeted critical energy facilities resulting in at least five deaths and hitting a large dam. The recent escalation has caused widespread power outages and disruptions to the country's energy grid and is reportedly in response to Ukraine’s attacks during the Russian presidential election. The attacks have exacerbated Ukraine's already precarious energy situation, as the country struggles to maintain adequate supplies for domestic consumption and industrial operations. These attacks have raised concerns about potential supply disruptions from both countries, which could further tighten the already strained global oil market. Russia, a major exporter of crude oil and natural gas, could face challenges in maintaining its already reduced export levels, while Ukraine's energy crisis could lead to increased demand for imported resources from neighbouring allies. Not too long ago, oil prices were on the rise after the International Energy Agency (IEA) revised its estimate of global oil demand in 2024. The potential ramifications of the recent strikes appear contained as the wider OPEC group continue to restrict supply. Oil Prices Ease into the Weekend Despite Attacks on Energy Infrastructure The oil market has not reacted in a massive way to the news over the past 24 hours of attacks on oil infrastructure. Oil prices reached a swing high on Tuesday as the RSI edged into overbought territory. Since then, oil prices have moderated and appear to be heading for a retest of the $85 marker that served as resistance -up until recently- since December last year. Prices remain above the 200 day SMA which supports the medium-term uptrend but may require a bullish crossover for sentiment to stack up on the long side. Brent Crude Oil Daily Chart Source: TradingView, prepared by Richard Snow Learn the fundamental determinants of the oi price, like demand and supply, that are so crucial to the oil market: IG Client Sentiment Backs Shorter-Term Bearish Move to Continue Oil US crude (WTI) data is used below as a proxy for Brent crude oil sentiment data: Oil- US Crude:Retail trader data shows 64.54% of traders are net-long with the ratio of traders long to short at 1.82 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggestsOil- US Crude prices may continue to fall. Source: TradingView, prepared by Richard Snow Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil - US Crude-bearish contrarian trading bias. For more information regarding the recent changes in sentiment and how they have led to the bearish outlook read our full IG sentiment report https://www.dailyfx.com/news/oil-update-russia-ukraine-war-targets-energy-infrastructure-20240322.html

2024-03-22 08:50

US Dollar Index Price and Analysis US The dollar index prints a fresh one-month high. Sterling continues to re-price lower after Thursday’s dovish BoE meeting. For all major central bank meeting dates, see the DailyFX Central Bank Calendar The Bank of England looks set to join the Federal Reserve and the European Central Bank in lowering borrowing costs in June with a global rate-cutting cycle looking set to dominate financial markets over the coming months. The Swiss National Bank jumped the gun yesterday, unexpectedly cutting its borrowing rate by 25 basis points to 1.5%. The SNB added that it was also ready to act to prevent the Swiss Franc from any further appreciation if necessary. The weakening of a raft of major G7 currencies has given the US dollar index a boost higher. Bank of England Leaves Rates Unchanged, Vote Split Turns Dovish, GBP/USD Slips US Dollar Index Daily Price Chart Short-dated US Treasury yields are little changed despite the greenback’s rally. In contrast, comparable Euro and UK 2-year bond yields continue to fall as markets continue to re-price recent central bank shifts. US 2-Yr Bond Yields UK 2-Yr Bond Yields Learn how to trade GBP/USD with our complimentary guide GBP/USD is trading at a one-month low in early European turnover with further losses likely. The pair now sit on the 200-day sma and a confirmed break below this technical indicator will bring 1.2547 and the 50% Fibonacci retracement level at 1.2471 into play. Below here 1.2381 comes into view. Any rebound will find resistance at 1.2628, the 38.2% Fib retracement, and 1.2667. GBP/USD Daily Price Chart All Charts via TradingView Retail trader data shows 62.46% of traders are net-long with the ratio of traders long to short at 1.66 to 1.The number of traders net-long is 35.32% higher than yesterday and 13.48% higher than last week, while the number of traders net-short is 29.88% lower than yesterday and 25.16% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. What are your views on the US Dollar and the British Pound – 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/us-dollar-index-pushes-higher-sterling-continues-to-weaken-after-boe-dovish-shift-20240322.html

2024-03-21 18:00

Most Read: Fed Sticks to Dovish Policy Roadmap; Setups on Gold, EUR/USD, Nasdaq 100 Too often, traders get caught up in the herd mentality, buying when prices are rising rapidly and selling in a panic when the market takes a turn to the downside. Contrarian indicators, like IG client sentiment, offer a different perspective. By gauging whether positioning and the overall mood are excessively bullish or bearish, these tools can hint at potential reversals and turning points. The key is to look for opportunities to zig when everyone else is zagging. Of course, contrarian indicators are most powerful when used as part of a well-rounded trading approach. Relying solely on sentiment data is unwise. Instead, combine these signals with fundamental and technical analysis to gain a comprehensive market understanding. This way, you might just spot attractive setups/opportunities others overlook. Now, let's use IG client sentiment data to analyze three key U.S. dollar pairs: USD/JPY, USD/CAD and USD/CHF. USD/JPY FORECAST – MARKET SENTIMENT IG client data paints a picture of extreme pessimism towards the USD/JPY. A staggering 86.79% of traders are betting against the U.S. dollar, with a short-to-long ratio of 6.57 to 1. The one-sided positioning has widened recently, with net shorts rising 7.55% since yesterday and a substantial 47.12% higher than last week. Our typical strategy involves taking a contrarian view of crowd sentiment. In this case, the extreme bearish bets on USD/JPY implies a potential for additional gains, even after the latest upswing. Contrarian approaches hinge on the idea that the majority can be wrong, especially during periods of strong market emotion. USD/CAD FORECAST – MARKET SENTIMENT IG client data reveals strong optimism surrounding the USD/CAD. Almost 61% of traders hold bullish positions on the pair, creating a long-to-short ratio of 1.56 to 1. Positive sentiment towards the U.S. dollar has intensified recently, with net-longs up 35.17% from yesterday, though moderately lower than last week's prevailing levels. Our contrarian approach raises a red flag about the pair’s bias. When a significant majority leans one way, it can create imbalances and unsustainable conditions, making a reversal more likely. This could mean trouble ahead for USD/CAD. Of course, sentiment is just one tool among many. Savvy traders always integrate sentiment data with tech and fundamental analysis to craft well-informed decisions. Disheartened by trading losses? Empower yourself and refine your strategy with our guide, "Traits of Successful Traders." Gain access to crucial tips to help you avoid common pitfalls and costly errors. USD/CHF FORECAST – MARKET SENTIMENT IG sentiment data reveals a strong bullish bias towards the USD/CHF. As of Thursday morning, a sizable 70.44% of retail clients hold long positions, resulting in a long-to-short ratio of 2.38 to 1. However, this bullish tilt has decreased slightly, with net-long positions down 3.75% from yesterday and 18.14% from last week. Our contrarian strategy suggests caution regarding this heavy bullish sentiment. A significant majority leaning one way can signal a potential pullback in the USD/CHF. Of course, market sentiment is just one factor to consider. Astute traders understand that a comprehensive approach, including technical and fundamental analysis, is crucial for informed decision-making. https://www.dailyfx.com/news/forex-usd-dollar-outlook-market-sentiment-usd-jpy-usd-cad-usd-chf-20240321.html

2024-03-21 15:08

EUR/USD News and Analysis ECB officials eye June meeting for first rate cut, SNB delivers a surprise cut Dollar drop appears short-lived as EUR/USD heeds resistance The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library ECB Officials Eye June Meeting for First Rate Cut, SNB Delivers a Surprise Cut In spite of the glaring differences between EU and US growth prospects, ECB officials maintain a cautions approach to the inevitable rate cutting cycle – eying up June as the all important meeting. Wage growth has been a major focus from governing council members in 2024 but it looks like the ECB is running out of reasons to push back on interest rate cuts. Earlier today, the Swiss National Bank delivered a surprise 25 bps cut in an attempt to normalize monetary policy. The was deemed necessary in light of a challenging external environment, real appreciation in the Swiss Franc and sub-two percent inflation which is likely to continue next year and in 2026. Dollar Drop Appears Short-Lived as EUR/USD Heeds Resistance Yesterday’s dovish Fed announcement allowed for markets to price out expectations of the Fed removing a full 25 basis point (bps) hike from its yearly outlook – sending the dollar lower. EUR/USD naturally benefitted from the momentary dollar depreciation and earlier today, tested the confluence zone of resistance around 1.0942 and 1.0960. The two levels correspond to the respective Fibonacci retracements involving the 2020-2022 major decline and the 2023 descent. Piece action highlights the 50 and 200-day simple moving averages (SMAs) and the 1.0830 marker as support. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow With a superior interest rate differential and a resilient economy, the US dollar is likely to remain supported – especially if incoming inflation prints continue to surprise to the upside as they have in some form or another since December last year. Another development in the summary of economic projections (SEP) was the consistent uprating of the Fed funds rate throughout the forecast horizon, including the rise from 2.5% to 2.6% for long-run estimates. This suggests a higher ‘neutral rate’ for the Fed in the face of resilient growth and a robust labour market. Additionally, the European economy remains stagnant and in much need for accommodation, increasing the likelihood of a cut from the ECB – particularly if inflation continues to head towards the 2% target. The chart below contrasts the path of inflation for major economies, highlighting the progress seen in the EU (purple). The figure used if the HICP but the CPI reading on 2.8% also suggests improvement in the rate of price increases year-on-year. Source: Refinitiv Workspace, prepared by Richard Snow https://www.dailyfx.com/news/eur-usd-gains-already-at-risk-after-markets-digest-fomc-revelations-20240321.html

2024-03-21 12:31

GBP/USD Analysis and Charts BoE unchanged, votes 8-1 to hold rates UK 2-Yr Gilt yield falls by 7bps. GBP/USD back below 1.2750. Most Read: Fed on Hold, 2024 Policy Outlook Unchanged The BoE left the Bank Rate untouched today but MPC voting left a dovish feeling post-decision. At the last meeting, six out of nine members voted to keep rates unchanged, two voted for a rate hike, and one member voted for a rate cut. Today’s vote, eight unchanged and one cut, suggests that rate cuts are nearing. The probability of a 25 basis point UK rate cut at the June meeting rose to over 65% after the announcement, the highest level seen in recent weeks. While the May meeting may be slightly too early for the BoE to start cutting rates, the June meeting is live. UK Inflation Falls to a Two-Year Low The interest-rate sensitive UK 2-Yr gilt shed a further 7-8 basis points on the announcement, pushing the yield further lower. The late-December triple yield low of around 3.96% may soon come under pressure. UK 2-Yr Gilt Yield Learn How to Trade GBP/USD with our Complimentary Guide: GBP/USD is around 25 pips lower after the decision and trying to reclaim the 1.2750 area. The US dollar is weak today after last night’s FOMC meeting reaffirmed the Fed’s outlook for three 25 basis point rate cuts in the US this year. GBP/USD Daily Price Chart IG Retail Trader data shows 47.11% of traders are net-long with the ratio of traders short to long at 1.12 to 1.The number of traders' net long is 14.32% lower than yesterday and 2.63% lower than last week, while the number of traders' net short is 9.93% higher than yesterday and 13.48% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise See How IG Client Sentiment Can Help Your Trading Decisions What is your view on the British Pound – 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/bank-of-england-leaves-rates-unchanged-vote-split-turns-dovish-gbp-usd-slips-20240321.html

2024-03-21 09:12

Gold (XAU/USD) Analysis The Fed gave gold the green light after confirming rate cut view Gold soars to new all-time high The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library The Fed Gave Gold the Green Light after Reaffirming Rate Cut View The Federal Reserve announced their latest monetary policy statement yesterday alongside the summary of economic projections. The immediate takeaways from the announcement include the Fed sticking with the original, three interest rate cuts this year alongside upward revisions to both inflation and growth. Fed Summary of Economic Projections, March 2024 Source: Federal Reserve, Summary of Economic Projections March 2024 Questions have been raised over just how tight economic conditions are in the US given the resilience of both the jobs market and economic growth. Naturally this has led to much speculation over the ‘neutral rate’ which is the Fed funds rate that is neither accommodative nor restrictive and was previously thought to be 2.5%. The March forecasts include upward revisions to the Fed funds rate for the entire forecast horizon and more notably saw a slight rise in the long-run rate rate from 2.5% to 2.6% - perhaps a nod to a higher theoretical neutral rate. Ahead of the announcement markets had priced in the potential for the Fed to ease up on rate cut expectations in light of robust economic data and hotter-than-expected inflation prints that have emerged in some way or another since December 2023. Therefore, the confirmation of the Fed’s December rate projections resulted in a dovish repricing in the dollar and shorter dated yields like the 2-year Treasury yield, providing gold with the ammunition to forge a new all-time high on Thursday. Gold 5-Minute Chart Source: TradingView, prepared by Richard Snow Learn how to prepare ahead of a market moving news/data with the easy to implement strategy outlined in our guide below: Gold Soars to New All-Time High Gold continued its bullish run after Wednesday’s FOMC meeting provided the catalyst. Bullish continuation was something highlighted in the previous gold update, as long as prices consolidated above the prior all-time high of 2146.80 – which they had. The new high of around 2222 has put down a new marker for gold bulls, backed by higher central bank purchases, most notably from China in recent times. The precious metal may be due for a temporary pullback after the large move and could soon find resistance it the dollar recovers and continues its recent uptrend. Support remains back at 2146. Daily Gold (XAU/USD) Chart Source: TradingView, prepared by Richard Snow Stay up to date with the latest breaking news and themes driving the market by signing up to out newsletter: https://www.dailyfx.com/news/gold-soars-to-new-all-time-high-after-the-fed-reaffirmed-rate-cut-view-20240321.html