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WTI crude - the trend is higher but risks are increasing With OPEC meeting out Wednesday both Brent and WTI crude are front and centre this week – we also know higher crude prices are key for inflation expectations, and the move into $90 has supported US 5Y5Y swaps at 2.48%. Traders are buying into crude to hedge against sustainably high inflation, but It feels like the market is long of crude as a hedge against geopolitical issues in Ukraine and the perception of supply being impacted. Demand is still a positive factor, with views Q1 22 should see a 6.8% increase in demand, followed by 5.9% in Q2 – Along with low inventories and reduced spare capacity, these are two clear factors promoting analysts to increase Brent forecasts above $100, with a belief demand increases to 100mbd and the belief we could head into deficit this year. Looking at output, it feels almost a given that OPEC will hike output by 400,000 bpd at this meeting – with prices above $90 clearly if they don’t lift output as planned then the oil market will fly – but that would be a huge surprise. Could they hike by more than 400k? Perhaps, but I think OPEC will be happy that while we have seen a lift in the US rig count, and we haven’t seen a sharp pick-up in market share from US share producers. We also know there are nations such as Nigeria and Angola which aren’t producing as much as they can. Looking at futures holdings through managed money, the market is certainly long of crude but not at extremes. We also see steep backwardation in the futures curve, and traders are incentivized to be long to pick up carry from rolling down the curve upon expiration. We assess the risk to reward trade-off – firstly, let's consider crude has closed higher for six straight weeks. We saw seven consecutive weeks in September before we saw a 27% correction into $62.90, so the risks are moving towards another downside move. Last week we also saw a bullish engulfing, so its clear there is strong demand to buy weakness and flow is still bullish – so if we do see sellers into the mix, then last weeks low of $82.42 comes into play. On the daily, price is holding the 5-day EMA, so a close below here would spark interest, as would a rollback below breakout high of $85.75. A break here should see crude into $79.31 (the 38.2% fibo of the Nov/Jan rally), but it feels that on current dynamics this should contain the selling.
PEPPERSTONE:SPOTCRUDE
by Pepperstone
15
Gold (XAU/USD) Short Opportunity - 1:10 or 1:5 Risk to Reward.Hi Traders, Above we have my idea around gold and the possibilities of a short opportunity. We have seen gold trading above it's equilibrium, having followed the DXY and in what is considered a low demand period. We have a possible rising wedge pattern forming as well as a strong order block shown by the increase in volume on the right hand side. We are also trading higher but making a lower pivot on RSI showing a possible divergence on the 4H chart which is known to be a strong indicator of a possible reversal, especially on this higher timeframe. COT showed majority retail traders short from 40-45, with this liquidity grab we could now see the bias of Commercial Traders swing to short from this key level. This level is also testing the trendline on the daily chart: I have shown my thoughts around a 1:10 and 1:5 risk to reward. Risking 1% for a 10% or 5% reward / 10% for 100% or 50%. Key Fundamental Drivers: Rates - Wednesday 26th Jan @ 19h00 GMT Fed Press Conference - Wednesday 26th Jan @ 19h30 GMT GDP - Thursday 27th Jan @ 13h30 GMT Let me know your thoughts and give us a like!
OANDA:XAUUSDShort
by Username_for_trading
13
Will Crude Oil Break $85?Crude oil is seeing bullish momentum in price following the pullback we saw between October & December 2021. Price pulled back to the weekly 50 simple moving average where it found support and has seen a nice impulsive move up this month. Since the low that was formed in April 2020, where the price of oil temporarily reached $0, there has been an uptrend in play, forming higher highs and high lows. Despite the pullback in December being the deepest during the recent trend, it still managed to avoid breaching the previous low formed in August 2021. This is another sign we are seeing a bullish trend in play. We are now anticipating a breakout of the recent high at $85, and if this level is broken, we could see price reach the $100 round number. As for now, we need to let price dictate the next move. See below for more information on our trading techniques. As always, keep it simple, keep it Sublime.
TVC:USOILLong
by Sublime_Trading
XAUUSD SHORT TO 1736 (ENTRY 2)This here is a sell to buy trade. I am already in a sell from 1829 so this will be my second entry. I still expect one more wave down towards 1735-1710 in order to grab liquidity for the year. After that move is complete, Gold will be ready for its yearly Bull run. Possibly even possible to create a yearly high now that the long term correction is about to be finished. If you look back on my profile and see my further analysis, this here is an ALTERNATIVE ANALYSIS. My main analysis is Gold shorts down towards 1570. I will be catching this move on behalf of myself & my Account Management investors. All my socials are available on my TradingView profile.
SAXO:XAUUSDShort
by BA_Investments
2
GOLD SHORT FROM 1856 (ALTERNATIVE ANALYSIS)If you go back on my page and look at my previous analysis, you will see that I am already in a sell from 1829 and running in decent profits. However, Gold is currently giving mixed signals with its consolidation and slow market moves. If Gold pushes up from here, my alternative analysis would be to short it from 1856 down towards 1740 as my FIRST target. All my socials are listed on my page. I will be catching this move on behalf of myself & my Account Management Investors.
OANDA:XAUUSDShort
by BA_Investments