rounded corner
rounded corner
top border

Oil steady on OPEC, GBP extends gains


Bookmark and Share
OPEC and Russia agreed to extend their production cut agreement to the end of 2018. Oil prices gave two-sided reaction, but no important levels were breached, provided that the deal was fully priced in. At this point, the best OPEC could do is to meet its target. Therefore, the bias turns on the downside. Failure to clear the $60/barrel resistance could encourage a downside correction in WTI on its June November rise. The mid-term support is eyed at $55.00 and $52.50 (minor 23.6% and major 38.2% retracement).
Energy stocks edged lower in Australia. The FTSE futures (-0.36%) fell on the lack of enthusiasm in the oil market and a stronger British pound.
The GBPUSD extended gains to 1.3480. The major driver of this weeks 260 pips rise was the EU/UK agreement on the Brexit settlement. The trend and momentum indicators point at a further rise. The next natural target for the GBPUSD-long positions is 1.3500. The key resistance is eyed at 1.3657, the 2018 high. Support could be found at 1.3370/1.3350 (50, 100-hour moving averages respectively).
The EURUSD saw support at 1.1816, slightly above 1.1805-support defined by the 100-day moving average and 38.2% retracement on November rebound. The Eurozones November inflation estimate is due today. The headline inflation may have accelerated to 1.6% year-on-year versus 1.4% printed a month earlier. The core inflation may have advanced to 1.0% from 0.9%. A solid inflation read should be supportive for the euro during a period of hesitation between the hawks and the doves.
The AUDUSD was better bid on the back of a better-than-expected Chinese PMI data. Both the manufacturing and non-manufacturing PMI hinted at a faster expansion in China's economic activity. Iron ore futures rallied past 2.30%. Despite the AUD-supportive influences, the AUDUSD may not gain a significant bullish momentum to reverse the actual negative trend that has been developing since September. The AU/US 2-year spread is negative, carry traders are nowhere to be found. The upside attempts could rapidly encounter resistance. Offers are eyed at 0.7610 (daily mid-Bollinger band). The 0.75 level is still on the radar.
The S&P500 (-0.04%) closed flat after having traded at a fresh record high on Wednesday. The Dow Jones (+0.44%) renewed record at 23959.76. As traders wonder whether the US stocks have reached a peak, there are only minor signs of anxiety in the market. The VIX index rose by 6.68%, yet the volatility index is still by its 100-day moving average (10.65%). Due today, the US core PCE may have accelerated to 0.2% month-on-month, after having stagnated at 0.1% for five consecutive months. An encouraging PCE read could give a minor boost to the US dollar, yet the upside potential could be limited. The probability of a December rate hike stands at a solid 95.9%, but investors are unsure on how fast the Federal Reserve (Fed) would continue raising rates under Jerome Powells leadership starting from February.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. Losses can exceed deposits.


Recent articles from this author



About the author


Ipek Ozkardeskaya is a  Senior Market Analyst at London Capital Group. She joined the market analyst team in 2015.
 
She delivers regular commentary and webinars on market news, trading analysis, strategy and psychology. She covers global equity indices, FX and commodities. She is regularly interviewed by Bloomberg, Reuters, The Times, Guardian and Daily Telegraph. 
 
Ipek has strong technical background in quantitative finance. Previously, she worked as FX strategist in Swissquote Bank and as a client sales executive at HSBC Private Bank in Geneva. She also developed quantitative models in automatic trading as part of BCV’s Structured Products team. 
 
Ipek has a Master’s degree in Financial Engineering & Risk Management and a Bachelor degree in Economics from University of Lausanne.
 
Contributing  author since 11/09/2017

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.


Copyright ©2005-2018 InsideFutures.com, a Barchart.com product. All rights reserved.

About Us  •   Sitemap  •   Legal  •   Privacy Statement