Daily Technical & Fundamental Analysis

Oil shortage fears fading away in the market
30 October, 2018 17:04

Oil shortage fears fading away in the market

Oil prices decreased at a moderate pace during the Monday trading following the rebound recorded late last week. Brent oil failed to hit the 78 handle, and quotes fell below 77, which has been observed today as well. The commodities market has to cope with several challenges at the beginning of this week. First of all, the USA keeps raising drilling activity, which indicates possible hikes of shale oil production. This week, the players seem to become more optimistic. Specifically, risk assets are on the rise now driven by Donald Trump's statements concerning the long-awaited trade deal with Beijing.

Japanese yen can show rise later
30 October, 2018 15:27

Japanese yen can show rise later

The US dollar is getting higher vs the yen this week. The rate is again close to the 113.00 handle, though customers become more careful approaching the psychological level, which means possible profit taking in the market. Investors have become more optimistic about the long-lasting US-China trade war, following recent Trump's message in which he expressed confidence in the agreement with the Chinese party. With this message, the market is naturally somewhat lifting in spirits especially given the previous statements. However, as the market analyst noted, Donald Trump is well known for his changing opinion. However, we should not forget that the US president was not sure that Beijing was ready for the deal. As a result, this is definitely not a progress with the risk to persist.

Euro still can move downwards
29 October, 2018 16:51

Euro still can move downwards

The euro preserves in its attempts to rebound during the Monday trading session. Last Friday, the currency managed to jump from the bottom to some $1.1335. The 1.14 handle is the main battlefront now, as the break of this level may soften sellers' pressure on the euro-to-US dollar rate. S&P agency downgraded its rating outlook for Italy to negative last weekend. However, the rating remained unchanged. At the same time, players mostly feared that the rating would be decreased, and they were happy with such a decision. Meanwhile, in Italy, state bonds rebounded with such background, while the yield dipped.

Oil price upturn requires driver
29 October, 2018 14:35

Oil price upturn requires driver

Oil prices somewhat recovered last Friday. However, oil, in fact, finished the week in the red – the decline had been recorded for the third week in a row. Brent oil keeps trying to hit the 78 handles and move further. For now, the price stands at some $77. 67, after softening during the morning trading. The global stock markets still face selloffs. Specifically, the price upturn in the oil market was restrained last Friday by the US indexes collapse. At the same time, lower Asian benchmarks that can spread to the European markets put pressure on oil on Monday already.

Sterling likely to remain weak
26 October, 2018 15:18

Sterling likely to remain weak

The sterling is plunging vs the US dollar on Friday. For now, the currency has hit the bottom since early-September touching the 1.28-handle. Today, the market sees massive sterling selloffs. First of all, Theresa May's resignation is no longer so pressing one. Still, the no-deal Brexit issue still persists. In particular, the Irish border problem is yet to see the solution, while the UK economy seems to slow down. As a result, the sterling becomes less attractive with the players staying restless. Additional pressure comes for the general global market environment. The sterling is the risk asset and naturally depressed by the risk aversion in the market on the trade war and weaker oil.

Euro affected from many sides
24 October, 2018 16:30

Euro affected from many sides

With unclear changes during the Tuesday trading, the euro has resumed sliding in the mid-week. For now, the euro-to-US dollar exchange rate fell below 1.397, hitting a 2-month low in Europe, facing a number of factors. The key pressure is still coming from the so-called Italian dead end. The EU has not approved the proposed budget draft, while the Italian government has refused to meet the EU negotiators half way and revise the budget. As a result, the situation will most likely keep escalation and EU stance can get tighter, which definitely plays against the euro. The additional negative driver is strong demand for US dollar, which is gaining grounds almost everywhere today on anticipated PMI report in the USA.

Gold prices up driven by global risks
23 October, 2018 15:58

Gold prices up driven by global risks

Following the Monday slackening, gold prices have recovered Tuesday and even exceeded 1,235 line for the first time since mid-July. The current price stands at some 1,241. For now, gold seems to restore a connection with the demand for risk assets. Specifically, risks are again the focal point in the world after some break. As a result, the players are restocking on protective assets seeing persisting budget problems in Italy, uncertain Brexit and escalating tensions between Saudi Arabia and the Western World. Seeing the recent rebound above the 1,200 handle, the market is discussing possible signs of the price bottom. And now this guess gain more sense, as the global tension is unlikely to soften so far.

Oil prices seem to weaken on overall market environment
22 October, 2018 17:02

Oil prices seem to weaken on overall market environment

Sellers softened pressure on oil prices last Friday, so benchmarks have managed to recover partly. Still, the remained in the red over the week. Brent quotes lost 0.8% and fell below 80 over the past 5 days. The observed oil weakening is related to the negative stance of investors towards the risk, which indicated plunge of global stock indexes. Additional pressure on Brent came from the bearish factors, like soaring crude oil reserves in the USA, though the increase was mostly related to decreased exports. In the next few days, prices for energy sources are likely to remain based on signals from the global demand issue given the upcoming anti-Iran sanctions. For reference, the sanctions against Iran are expected to come into force in about two weeks. In fact, prices already include the above factor, but the possibility of new restrictions can propel prices.

Large funds resume buying on CBOE
22 October, 2018 11:10

Large funds resume buying on CBOE

Non-commercial traders reduced net short position for bitcoin contracts 40 to 1,330. Large speculators have started cutting net short positions after 2-week upturn. The net position started sliding from the early-September peaks. As for nonreportable positions, net long positions on bitcoin contracts decreased by 40 to 1,330. Besides, they have started reducing positions after 2-week upturn as well. Commercial traders that usually sell against the main trend, did not take part in trading over the period under review. Open interest rose by some 230 to 4,260 contracts. Bearish index of large speculators (short and long positions) decreased 0.11 to 1.63 over the period under review.

Decline of Australian dollar slower on Friday
19 October, 2018 17:55

Decline of Australian dollar slower on Friday

The Australian dollar has increased against the US dollar offsetting the previous losses. The Australian-to-US dollar exchange rate stands at some 0.7146.  Beijing has released a pack of economic reports today. The key interest arouses in the Q3 GDP figures – the rate increased by 6.5% (forecast – 6.5%; Q2 level – 6.7%). Thus, the slowdown was expected but not so big. China's industrial production rose just by 5.8% y-o-y in September (6.0%; 6.1%). At the same time, positive news came from retail sales which hiked by 9.2% y-o-y over the period under review, exceeding the anticipated level. The labour market also showed better performance – China's unemployment rate improved to 4.9% (5.0% earlier).

Higher oil prices fuel euro-area inflation in line with expectations
17 October, 2018 17:27

Higher oil prices fuel euro-area inflation in line with expectations

The Eurostat September inflation report has hardly surprised the market. Specifically, the euro area inflation in September came in line with the forecasts voiced in the market. The rate increased by 2.1% y-o-y over the period under review. In September, consumer prices rose at the August pace. However, core inflation in September added only 0.9% in September, as it was recorded in August. In this context, the market expectations regarding the changes failed to come true – analysts anticipated an increase of 1%. The core CPI does not include hiking prices for power sources and food, including alcoholic. This means that the September inflation was mainly driven by the prices for energy sources, which is quite natural given more expensive petroleum and other fuel in the euro area in September (9.5% up y-o-y) amid soaring oil quotes. Spain and Germany gained the palm in terms of the September inflation: CPI rose 2.3% and 2.2% y-o-y respectively. At the same time, some other euro-area countries (Italy and France particularly) posted slower inflation over the same period. 

Weekly analysis for EUR-USD – COT
16 October, 2018 12:18

Weekly analysis for EUR-USD – COT

Non-commercial traders raised net short positions by 12,000 contracts to 18,700. Large speculators have been expanding short positions for the second week. Net short positions have peaked since April 2018. Commercial traders decreased net long position on EUR/USD contracts by 6,100 to 3,800. They have lowered positions for the second week after an almost 4-week increase. Open interest dropped by some by 2,200 to 553,300 contracts. Bearish index of large speculators (short and long positions) amounts to 0.08 to 1.12 over the period under review.